G.R. No.

108891 July 17, 1995

JRS BUSINESS CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS (Fifth Division) and ROBERT A. NACARIO, respondents.

QUIASON, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court to set aside the
Resolution of the Fifth Division of the National Labor Relations Commission (NLRC) dated October
12, 1992 (which reversed the Decision dated September 20, 1989 of Labor Arbiter Conchita J.
Martinez), and its Resolution dated January 18, 1993 (which denied petitioner's motion for
reconsideration).

Petitioner employed private respondent on April 7, 1980. Subsequently, private respondent was
promoted as Station Manager of petitioner's Davao branch office.

In September 1988, Fernando T. dela Cerna, petitioner's Internal Auditor, conducted an audit of its
Davao office. The audit revealed a shortage totalling P145,564.33 arising from undeposited cash
sales and unexplained cash shortages from charge sales (Rollo p. 67).

On the basis that it was the responsibility of petitioner to deposit the proceeds of sales with the office
cashier, Milady J. Munoz, petitioner's Treasurer, called private respondent's attention to the cash
shortage. He was directed to explain in writing within 72 hours from receipt of the notice why he
should not be relieved from his position (Rollo, p. 70).

Four days later or on September 27, 1988, private respondent was informed by Ernesto A.
Gonzales, petitioner's Personnel Manager, of the appointment of Fernando T. dela Cerna as officer-
in-charge of the Davao office. He was further instructed to report to dela Cerna for his new duties
pending petitioner's final decision regarding the result of the audit report (Rollo, p. 71).

On October 2, 1988, the employees of petitioner: namely, Elizabeth Paulino, the office cashier, her
husband, Jaime, and Darwin Solis, signed statements which detailed the irregularities committed by
private respondent and his wife (Rollo, p. 72).

On October 12, 1988, private respondent was directed by Ernesto A. Gonzales to go on leave
without pay effective October 15, 1988 until further notice, in view of the on-going investigation
(Rollo, p. 76).

On October 13, 1988, private respondent wrote petitioner a letter rebutting the allegations contained
in the affidavits submitted against him. He alleged that he merely requested his wife to assist him in
the preparation of reports as she was a former employee of petitioner. Furthermore, he denied any
participation in the cash shortage (Rollo, pp. 79-80).

On November 17, 1988, private respondent and his wife received separate demand letters for the
immediate restitution of the amount of P145,564.33 (Rollo, pp. 77-78).

On February 6, 1988, considering his indefinite forced leave without pay as a constructive dismissal,
private respondent filed a complaint against petitioner with the Regional Arbitration Branch No. IX of
Davao City for illegal dismissal, reinstatement with back wages, vacation and sick leave pay, moral
and exemplary damages and attorney's fees (Rollo, p. 50).

On March 17, 1989, petitioner filed its Answer wherein it denied that private respondent was
constructively or illegally dismissed as the records of its Davao office and the affidavits submitted by
the Paulino spouses and Solis were still being evaluated in Manila; that private respondent allowed
his wife to gain access to confidential matters; and that he had not answered the inter-office
memoranda and demand letter sent to him (Rollo, p. 55).

Due to the failure of the parties to arrive at an amicable settlement, the Labor Arbiter directed them
to submit their position papers.

On September 20, 1989, the Labor Arbiter rendered a decision, dismissing the complaint of private
respondent for lack of merit (Rollo, p. 40).

Private respondent then appealed to NLRC. On October 12, 1992, NLRC set aside the Labor
Arbiter's decision and ruled that private respondent was illegally dismissed. However, instead of
reinstatement, NLRC merely granted private respondent separation pay at the rate of one month
salary for every year of service.

In issuing such order, NLRC took into consideration "the realities of the situation in the instant case
[that] the reinstatement of complainant would not be conducive to industrial peace and harmony.
Complainant is a managerial employee and his continuance in the service would naturally involve
the continued trust and confidence in him by respondent" (Rollo, p. 38).

Petitioner then filed a Motion for Reconsideration which was denied (Rollo, p. 48).

Hence, this petition.

There is a divergence of views between the Labor Arbiter and NLRC regarding the fitness of private
respondent to remain in the employ of petitioner as a Station Manager, particularly on the issue of
inadequacy of the evidence against private respondent.

We agree with NLRC. The so-called "Affidavit/Testimony" of Elizabeth Paulino implicating private
respondent to the anomaly (Rollo, p. 72), was not verified or under oath. Neither Paulino nor those
who signed as witnesses to said exhibit were presented before the Labor Arbiter. Likewise, the
written statements of Jaime Paulino and Darwin Solis (Rollo, pp. 74-75) were unverified and the two
signatories were not called to testify before the Labor Arbiter. The said exhibits were therefore
hearsay and of no probative values. On top of this, Elizabeth Paulino executed an affidavit absolving
private respondent and his wife of any participation with respect to the cash shortage. This affidavit
is noteworthy because the affiant admitted sole liability for the cash shortage.

Fernando T. dela Cerna, the Internal Auditor of petitioner, found private respondent's "explanation
reasonable except items (sic) pertaining to the amount of cash shortage since appellee [petitioner
herein] would still conduct further verification and/or investigation (Rollo, p. 26). Petitioner, in its
answer filed with the Labor Arbiter, stated that it "decided to further study in detail and scrutinize the
records of the Davao Branch" regarding the liability of private respondent (Rollo, p. 31).

The NLRC also found the other charges levelled against private respondent to be without basis and
accepted his explanation thereof as satisfactory. It took note of the long and dedicated service of
private respondent to the company (Rollo, pp. 31, 34-35). It belittled the charges that private
respondent allowed his wife to go to the branch office to help him prepare his reports and that he
brought to the office his own air-conditioning unit (Rollo, pp. 32-35) saying that it is common practice
for housewives to have "their presence felt" in the offices of their husbands and executives to bring
their own appliances to their office.

Petitioner claims that the City Prosecutor decided to file an information against private respondent in
connection with the cash shortage in the labor case. The outcome of the preliminary investigation
before the City Prosecutor cannot affect the proceedings before the NLRC, which has to review the
decision of the Labor Arbiter on the basis of the evidence on record, not on the basis of the evidence
submitted to the City Prosecutor.

It appears that Elizabeth Paulino executed an affidavit before the City Attorney absolving private
respondent on the basis of which the City Prosecutor dismissed the charges against private
respondent. Petitioner claims that Elizabeth Paulino retracted her affidavit and the City Prosecutor
decided to file criminal charges against private respondent. This evidence cannot be used to alter
the decision of the NLRC.

Also presented as an issue was petitioner's directive to private respondent of October 12, 1988 to go
on leave without pay to pave the way for the investigation of the charges against him.

Sections 3 and 4, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code,
Termination of Employment, provide:

Sec. 3. Preventive suspension. The employer may place the worker concerned under
preventive suspension if his continued employment poses a serious and imminent
threat to the life or property of the employer or of his co-workers.

Sec. 4 Period of suspension. No preventive suspension shall last longer than 30

days. The employer shall thereafter reinstate the worker in his former or in a
substantially equivalent position of the employer may extend the period of
suspension provided that during the period of extension, he pays the wages and
other benefits due to the worker. In such case, the worker shall not be bound to
reimburse the amount paid to him during the extension if the employer decides, after
completion of the hearing, to dismiss the worker.

Petitioner having violated the maximum 30-day preventive suspension under Section 4, Rule XIV,
Book of the Omnibus Rules Implementing the Labor Code, a sanction is imposed on him in
consonance with our ruling in Great Pacific Life Assurance Corporation v. National Labor Relations
Commission, 187 SCRA 694 (1990). Petitioner must indemnify private respondent in the amount of
One Thousand Pesos (P1,000.00).

WHEREFORE, the Decision of National Labor Relations Commission is AFFIRMED with the
MODIFICATION that petitioner is ordered to indemnify private respondent in the amount of
P1,000.00. The temporary restraining order issued by this Court on March 15, 1993 is LIFTED.

SO ORDERED.
 [G.R. No. 120030. June 17, 1997]

ATLAS FERTILIZER CORPORATION, EDUARDO J. SORIANO, and

JOSELITO C. PALAPAL, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, HECTOR S. PAYOT, and MARISSA A.
VILLANUEVA, respondents.

DECISION
DAVIDE, JR., J.:

Assailed in this petition under Rule 65 of the Rules of Court are the 27 April
1994 Decision and the 19 December 1994 Order of the National Labor
[1] [2]

Relations Commission (NLRC) in NLRC NCR Case No. 00-07-03805-92. The

former reversed the 12 March 1993 Decision of Labor Arbiter Raul T. Aquino
[3]

and ordered the petitioners to reinstate the private respondents to their previous
position with back wages limited to three years. The latter denied petitioners'
motion for reconsideration.
The pertinent facts, as culled from the records, are as follows:

Private respondent Marissa A. Villanueva commenced working with petitioner Atlas

Fertilizer Corp. (hereinafter AFC) on 1 August 1987 as Market Researcher. Two years
after, she was promoted as Buyer I and assigned at the Central Purchasing Office
(CPO) of AFC. Private respondent Henry S. Payot, on the other hand, was employed
by AFC on 16 August 1989 as Buyer I and assigned also at the CPO. As buyers, they
were responsible for "the timely procurement of raw materials required for AFC
operations, as well as traded goods for marketing by the Chemicals Division, at
optimum cost and quality and quantity specifications." Each of them acted as checker
[4]

of the other's purchases.

The private respondents' predicament started in March 1992 when an audit

of the procurement activities of the Makati CPO for the period September 1991
to February 1992 was conducted by the Internal Audit Department. The audit
showed as follows:

(1) 90% of the transactions have not undergone formal bidding or canvassing;

(2) 15% of the transactions, mostly for office supplies, did not match the quantities
reflected in the requisition slips with the quantities shown on the corresponding
Purchase Orders (POs);
(3) The specifications on 3% of the POs did not match those on the Delivery Receipts;
and

(4) 70% were issued POs only after delivery. [5]

On 23 April 1992, petitioner Eduardo J. Soriano, the Chairman and Chief

Executive Officer of AFC, issued an inter-office memorandum placing the
[6]

private respondents on preventive suspension pending investigation and

requiring them to explain in writing and under oath why they should not be
dismissed for serious misconduct and willful disobedience of company rules.
On 27 April 1992, private respondents' immediate superior, then Purchasing
Manager Simplicio Endaya, submitted a Reply in defense of the private
respondents without being required to do so. In that same Reply, he tendered
his resignation, which was accepted by the petitioner company.
On 4 May 1992, the private respondents submitted their written
explanation. Subsequently, respondent Villanueva sent another letter
[7]

bolstering her claim of innocence of the charges against her.

On 25 May 1992, their preventive suspension was lifted. Nevertheless, the
investigation was continued.
Meanwhile, AFC filed with the Regional Trial Court of Makati a civil action
against the private respondents for damages with application for a writ of
preliminary attachment. [8]

On 1 July 1992, petitioner Joselito C. Palapal, Manager of the Human

Resource and Purchasing Departments of AFC, issued an inter-office
memorandum informing the private respondents of the termination of their
employment effective 2 July 1992. This prompted the latter to file with the
[9]

NLRC a complaint for illegal dismissal with prayer for reinstatement, which [10]

was subsequently amended to include illegal suspension and claims for

backwages, moral and exemplary damages, attorney's fees, and separation
pay in lieu of reinstatement. [11]

After the submission by the parties of their respective position papers and
other pleadings, the Labor Arbiter rendered a decision dismissing for lack of
[12]

merit the complaint. He ruled that private respondents' preventive suspension

was valid as a measure of self-protection for the petitioner company. So was
their dismissal from the service. He found that indeed majority of the purchases
made by the private respondents were effected without canvassing or
bidding. Worse, there was overpricing by favored suppliers. Their explanation
on some transactions was belied by the documentary evidence on record; and
as to the other transactions, the private respondents offered no
justification. Their acts or omissions, according to the Labor Arbiter, constituted
grave transgression of the company's established policies and procedures and
were enough for the petitioner company to lose its trust and confidence in
them. The private respondents' dismissal was, therefore, valid.
On appeal by the private respondents, the NLRC set aside the decision of
the Labor Arbiter and rendered a new one directing the reinstatement of the
private respondents to their former position with back wages limited to three
years. It relied heavily on the Reply submitted by the private respondents'
[13]

immediate superior which stated among other things: "[A]ny deviations from, or
exceptions to, the procedures as contained in the Manual, should not be
interpreted as having been intended to violate the Manual, but rather to satisfy
the corporate needs given the resources available."
The NLRC held that the private respondents' preventive suspension was
improper and unreasonable, considering that the Audit Report which was made
the basis thereof did not make any specific finding that private respondents'
presence in the company's premises posed a serious and imminent threat to
AFC's property. Neither is private respondents' dismissal justified, for the
accusations levelled against them were not substantiated by evidence and were
purely conjectural.
Their motion for reconsideration having been denied, the petitioners
[14]

elevated the case to this Court contending that the NLRC gravely abused its
discretion (1) in ruling that the preventive suspension imposed on the private
respondents was improper and unreasonable, (2) in reversing the factual
findings of the Labor Arbiter and principally relying on the self-serving
explanation of private respondents' immediate superior, and (3) in ruling that
the evidence adduced before the Labor Arbiter is not substantial to warrant the
dismissal of the private respondents and in ordering their reinstatement with
back wages.
The private respondents and the Office of the Solicitor General (OSG) are
one in saying that the preventive suspension was not proper; for the fact that
the petitioners allowed the private respondents access to company records in
the preparation of their answers only shows that the private respondents'
presence in the company premises would not pose a serious threat to the
property of AFC. They also agree with the NLRC in treating as significant the
Reply of Simplicio Endaya.
As to the third assigned error, the private respondents contend that the
petitioners miserably failed to substantiate the charges of misconduct; hence,
their dismissal based on loss of trust and confidence cannot be upheld.
 The OSG, on the other hand, submits that the alleged violations of the
procurement procedures in the Purchasing Manual cannot be characterized as
willful breach of trust because the existence or effectivity of such manual
appears "dubious." Besides, the alleged irregular transactions were duly
approved by the top management. Moreover, the private respondents were
overburdened with overlapping and multifarious duties and responsibilities. The
petitioner company should have provided additional manpower to its
Purchasing Department whose original staff numbered eleven in 1989 and
unduly reduced to only four during the retrenchment program in 1990. Finally,
the OSG prays that the private respondents be awarded separation pay, in lieu
of reinstatement, at the rate of one month pay for every year of service, and
backwages from the date of receipt of the Notice of Termination until the finality
of the decision in this case less earnings obtained during the said period.
Preventive suspension is a disciplinary measure for the protection of the
company's property pending investigation of any alleged malfeasance or
misfeasance committed by the employee. Section 3, Rule XIV, Book V of the
[15]

Omnibus Rules Implementing the Labor Code provides:

Sec. 3. Preventive Suspension. The employer may place the worker concerned under
preventive suspension if his continued employment poses a serious threat to the life or
property of the employer or of his co-workers.

Nothing in this rule requires that the report upon which the preventive
suspension was based should make a specific finding that the
employee's continued employment poses an imminent threat to the property of
the employer. It is enough that such fact can be gleaned from the circumstances
of the case.
The cases cited by the respondent Commission, viz., Rural Bank of Baao v.
NLRC and Global Inc. v. Atienza, are not on all fours with the instant case. In
[16] [17]

the former, it was not shown that the audit report revealed, at the least, any clue
that the employee's continued presence would be a threat to the operations or
assets of the employer. In the latter case, the grounds for preventive
suspension were absenteeism and tardiness, which obviously would not pose
a threat to the life or property of the employer or of the co-workers. Thus, in
both cases, the preventive suspension was not sustained.
In the present case, the audit showed that the transactions entered into by
the private respondents were tainted with irregularities. Considering such
irregularities and the undisputed fact that the purchases made by the
respondent employees amounted to approximately P600 million annually, there
can be no shred of doubt that the respondents' continuance in the service would
pose a serious threat to the property of petitioner AFC. As feared by the
petitioners, the respondent employees were in "a position to cause substantial
prejudice to petitioners arising from their misconduct, such as their continuous
disregard of the purchasing policies resulting in the unauthorized delivery of
goods in the absence of the required purchase orders, confirmation of other
questionable transactions and the opportunity to change and manipulate
records to suit their personal objectives."[18]

In a nutshell, the private respondents' preventive suspension was

necessary for the protection of petitioner AFC's assets and operations pending
investigation of the alleged irregularities committed by them.
The private respondents capitalize on the fact that they were given access
to company records, which, according to them, was an indication that their
presence did not pose a threat to petitioner AFC's property. They seem to be
unmindful of the fact that such privilege was accorded them to enable them to
explain the charges against them. Besides, the exercise of such privilege was
under the supervision of the company's audit personnel. The order of
suspension thus reads:

During the period of your preventive suspension, you are allowed access to company
records only in the presence of the Auditor or his representative to enable you to
prepare your Answer.

We now come to the second and third assigned errors, which boil down to
the issue of whether the petitioners' loss of trust and confidence in the private
respondents was founded on facts established by substantial evidence. The
Labor Arbiter resolved this issue in the affirmative; while the NLRC, in the
negative.
Deeply embedded in our jurisprudence is the rule that the findings of facts
of quasi-judicial bodies like the NLRC are accorded great respect and, at times,
even finality. There are, however, exceptions, among which is when there is a
conflict between the factual findings of the NLRC and the Labor Arbiter. We [19]

are more in accord with the findings of the Labor Arbiter.

The basic premise for dismissal on the ground of loss of confidence is that
the employee concerned holds a position of trust and confidence. In the [20]

instant case, the private respondents are purchasers of materials and supplies
needed for petitioner AFC's operations. Concededly, the transactions they
entered into involved a gargantuan amount of money, i.e., more or less P600
million annually. Their Job Identification requires "integrity and
confidentiality." Hence, there can be no denying that the respondents' position
[21]

is vested with a high degree of trust and confidence.

 As a general rule, employers are allowed a wider latitude of discretion in
terminating the services of employees who perform functions which by their
nature require the employers' full trust and confidence. Mere existence of
[22]

basis for believing that the employee has breached the trust of the employer is
sufficient and does not require proof beyond reasonable doubt. Thus, when [23]

an employee has been guilty of breach of trust or his employer has ample
reason to distrust him, a labor tribunal cannot deny the employer the authority
to dismiss him. This brings us to the issue of whether the petitioners' loss of
[24]

trust and confidence in the respondent employees rested on some basis.

While there was a Draft Purchasing Manual at the time the respondent
employees entered into the questioned transactions, the same was apparently
not approved yet. Nevertheless, the private respondents admit that canvassing
or bidding was part of the purchasing procedure handed down by their
predecessors in the procurement of materials and supplies. In fact, among the
duties and responsibilities set forth in their Job Identification were as follows:
[25]

(1) the canvassing and sourcing of raw materials and traded goods, (2) the
sending out of requests for quotation and purchase orders (POs) to respective
suppliers, and (3) the preparation and conduct of bidding according to company
policies and procedures.
Yet, most of the transactions entered into by the respondent employees
from September 1991 to February 1992 lacked canvass or bidding. They tried
to justify such lack by claiming that some of the transactions were emergency
in nature. But, the records reveal that only a very few of the requisitions were
marked urgent.
The private respondents explained the absence of canvass or bidding by
also saying that the end-users had specified a particular brand which was
available only from one supplier or distributor. Respondent Villanueva referred
to PO Nos. 1625 and 1657 and claimed that the end-user preferred Fujitsu
Printer of which Microcircuits was the alleged sole distributor. In this instance,
she was caught in a lie, for the purchase requisitions (PRs) showed requests
for a computer printer without specifying any brand.Similarly, respondent Payot
justified the lack of canvass or bidding in PO No. 91-1720 by asserting that the
end-user preferred Detecto weighing scale which was obtainable from a sole
distributor. The PR, however, did not specify a particular brand.
Anent the other transactions that did not undergo canvassing or bidding, the
private respondents explained that the same were either repeat orders or
requisitions for items involving small amount of money. They did not, however,
offer any explanation for the rest of the questioned transactions.
 It cannot be gainsaid that the failure of the private respondents to canvass
or conduct bidding prevented the petitioner company from obtaining the best
terms or the lowest prices available in the market. This holds true especially in
those transactions where purchase orders were issued only after the delivery
of the materials or supplies.
Moreover, as found by the Labor Arbiter, the private respondents favored
certain suppliers, which undoubtedly worked to the prejudice of the petitioner
company. More specifically, respondent Payot made purchases from Marne
Enterprises in an aggregate amount of more than P2 million without canvassing
or bidding. Worse, an independent comparative survey of prices showed that
Marne's prices were twice or thrice higher than the prices quoted by other
suppliers for the same items. Strangely, in almost all of such transactions, the
POs were issued only after the delivery of the items. Just as amazing is that
Marne Enterprises was not even an accredited supplier, and it started
transacting with the private respondents one month after it was registered with
the Bureau of Domestic Trade. One thing that added fuel to petitioners'
suspicion that Marne was a dummy of the respondent employees is the fact
that it closed shop when the said employees were dismissed from service.
Respondent Villanueva, on the other hand, appeared to have favored ATD
Enterprises. All of the transactions she entered into with that entity was without
canvassing or bidding. In her attempt to justify such transactions, she claimed
that ATD's prices were the lowest. She could not, however, show how she came
to that conclusion without conducting any canvass. She also averred that the
purchases made with ATD were urgent. But only a very few of the PRs had the
notation "ASAP" (as soon as possible); in fact, most of the PRs which she
claimed to be urgent did not indicate a required date for purchase. Additionally,
in almost all of her purchases from ATD, the POs were issued only after the
delivery of the supplies.
These irregular acts, which have been proved by substantial evidence,
constitute reasonable basis for the petitioners to loss their trust and confidence
in the respondent employees.
The Reply submitted by the private respondents' immediate superior, which
was given much credence and weight by the respondent Commission, pales in
comparison with the documentary evidence on record. First, as pointed out by
the petitioners, the act of Mr. Endaya of resigning after submitting the said Reply
"created doubt as to the integrity of the explanations" contained
therein. Second, while the said Reply stated exceptions to the rule requiring
canvassing or bidding -- to wit, transactions which are emergency in nature, or
those involving small amount of money, or those requiring confirmation POs --
it did not indicate which of the questioned transactions fell under the
exceptions. Third, there was nothing in the Reply which refuted the finding of
the Labor Arbiter that the private respondents favored certain suppliers, such
as Marne Enterprises, whose prices were double or triple the prevailing market
prices. In sum, Endaya's Reply is a slender thread to hang on.
The private respondents harp on the fact that the purchases were approved
by the company's Senior Vice-President of Finance until 1991 and by petitioner
Eduardo Soriano himself starting 1992. Such approval would not wash clean
the irregularities committed by the respondent employees. It must be stressed
that those purchases were endorsed by the then Purchasing Manager of AFC,
Mr. Endaya. The top management had every right to presume that Endaya, as
private respondents' immediate superior, had seen to it that the purchases were
effected in accordance with the company's policies and regulations before
endorsing the same. It was also justified in relying on the regular performance
by the private respondents of their duties.
Premises considered, we find that the private respondents are indeed unfit
to continue working for the petitioner AFC. We agree with the Labor Arbiter that
it would be an act of oppression to compel the petitioners to retain the
respondent employees.The law, in protecting the rights of the laborers,
authorizes neither oppression nor self-destruction of the employer. [26]

WHEREFORE, the instant petition is GRANTED, the 27 April 1994 Decision

and 19 December 1994 Order of the National Labor Relations Commission are
ANNULLED and SET ASIDE, and the 12 March 1993 Decision of the Labor
Arbiter is REINSTATED.
SO ORDERED.

[G.R. No. 107014. April 12, 2000.]

CHONA P. TORRES, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER

DANIEL C. CUETO, NLRC CASHIER, (E & R SECURITY AGENCY, INC. and/or MRS. ENEIDA
MONILLA), Respondents.

DECISION

PARDO, J.:

The case is a petition for certiorari 1 to set aside the resolution of the National Labor Relations Commission
2 denying the appeal from the Labor Arbiter’s decision 3 ordering petitioner’s reinstatement as security
guard with full back wages, on the ground that it was issued with grave abuse of discretion. chan roble svirtuallaw lib rary

The facts are as follows: chanrob 1es vi rtua l 1aw lib rary

On January 5, 1989, respondent E & R security agency hired petitioner Chona P. Torres as a security guard.

On October 27, 1989, during a routinary meeting of the security guards of the agency assigned to the
Philippine Aerospace Development Corporation, the issue of granting a P25.00 pay increase pursuant to
Republic Act No. 6727 was taken up and questions were raised as to the date of implementation of the
increase. Petitioner Chona P. Torres stood up and uttered aloud at the presiding officer: "BAKIT ANG
SASABIHIN NINYO SA OPISINA AT DITO AY MAGKAIBA!" to which remark the presiding officer replied:
"WALA NAMAN PAGKAKAIBA, DI BA?." The presiding officer also asked: "BAKIT AYAW MO DOON SA
OPISINA?" Then petitioner shouted: "WALA NA AKONG TIWALA SA INYO AT SA AGENCY KASI SINUNGALING
KAYO. EH, KUNG LALAKI LANG AKO, BAKA KUNG ANO PA ANG NAGAWA KO SA INYO NGAYON!" 4

On October 27, 1989, respondent agency sent petitioner a letter which states: jgc:chanrobles. com.ph

"To : SG CHONA TORRES

PADC/ERSAI DETACHMENT

Pasay Road, Domestic Airport

"SUBJECT : Suspension

"Effective immediately, upon receipt hereof, you are hereby suspended from your duty as Security Guard for
a period of fifteen (15) days for gross violation of Rules and Regulations implementing Republic Act No.
5487 as amended by Presidential Decree No. 1919, Section three (3) hereof and Standard Operating
Procedures of the Agency, tantamount to discourtesy, disloyalty and insubordination while in the
performance of your duty.

"For info, guidance and compliance.

"CAPT MANUEL M GOMEZ JR (IA) PC

"OPERATIONS MANAGER ERSAI" 5

On October 30, 1989, petitioner filed with the National Labor Relations Commission, Arbitration Branch,
against respondent E & R Security Agency, Inc. a complaint for illegal suspension and violation of R.A. No.
6727, and for having been required to sign on a blank payroll. 6

On November 10, 1989, petitioner received a letter from the agency informing her that she was re-assigned
and required to report at the respondent’s Manila office for further instructions. 7

On November 27, 1989, respondent agency terminated her services for abandonment when she failed to
report for work in her new assignment. 8

On November 30, 1989, petitioner filed with the Labor Arbiter an amended complaint charging respondent
with underpayment of wages under R.A. No. 6640 and harassment. 9

On June 26, 1990, Labor Arbiter Daniel C. Cueto rendered a decision the dispositive portion of which
states:jgc:chanrob les.co m.ph

"WHEREFORE, viewed from the foregoing facts and considerations, this office declares the dismissal of the
complainant not in accordance with law. Hence, respondent is hereby ordered: jgc:c hanrobles. com.ph

"1. To immediately reinstate Complainant to her former position as security guard without prejudice to
reassignment in the exigency of the service, with full backwages from the time she was placed under
preventive suspension on October 27, 1989 up to the time of her reinstatement. chanrob lesvi rtua llawli bra ry

"2. To pay the salary of the Complainant for October, 1989.

"3. To pay Complainant the adjusted salary differential for services rendered for the period January 1 to May
25, 1989, May 26 to August 25, 1989, August 26 to September 30, 1989 under R.A. 6640; and salary
differentials under R.A. 6727 for work rendered covering July 6, 1989 to October 28, 1989 in the aggregate
total of P15,523.48.

"Other claims are denied for lack of merit.

"SO ORDERED." 10

On July 20, 1990, respondent E & R Security Agency, Inc. filed with the National Labor Relations
Commission, National Capital Region, its Appeal Memorandum, in support of its appeal from the decision of
the Labor Arbiter.

On June 25, 1991, the National Labor Relations Commission issued a resolution denying the appeal on the
ground of non-perfection due to lack of appeal bond and that there was "no compelling reason or sufficient
justification to disturb the contested decision, it being substantially supported by the established facts and
applicable law and jurisprudence." 11

On October 7, 1991, the decision having become final, on petitioner’s motion, the Labor Arbiter issued a writ
of execution on the reinstatement aspect, but it was not implemented because the monetary aspect of the
decision remained to be determined. 12

On November 8, 1991, petitioner asked the Labor Arbiter to issue an alias writ of execution based on the
completed computation of back wages in the amount of P104,396.00 worked out by NLRC’s Research and
Information Unit. On November 19, 1991, NLRC Sheriff Max L. Lago issued a Notice of Garnishment which
was served on private respondent’s deposit account with the Philippine National Bank, PNC compound
Branch, Diliman, Quezon City, in the amount of P105,296.00 inclusive of the execution fee of P1,000.00.

On November 27, 1991, the Labor Arbiter directed the Philippine National Bank to release the garnished
amount and to make it payable to the NLRC cashier for the account of petitioner pending ultimate release to
her. Accordingly, the PNB issued Manager’s Check No. AF 90-8881 dated December 6, 1991.

Meantime, on December 3, 1991, respondent E & R Security Agency, Inc. filed with the Labor Arbiter 13 an
Urgent Ex-Parte Motion to Quash the Alias Writ of Execution on the ground that there has been a change in
the situation of the parties which makes the execution inequitable. Respondent contended that petitioner
Torres accepted employment from another security agency without previously resigning from it.

On February 2, 1992, the Labor Arbiter issued an order for partial execution directing the release of the
uncontested salary differential amounting to P15,523.48, to be deducted from the amount of P105,396.00,
and to withhold the balance thereof, pending resolution of the Motion to Quash the alias Writ of Execution.
14

On March 19, 1992, petitioner filed with the National Labor Relations Commission a petition for mandamus
and injunction to compel the Labor Arbiter to issue an order directing the NLRC Cashier to release the entire
amount deposited with the latter to petitioner.

On August 11, 1992, the National Labor Relations Commission issued a resolution denying the petition for
mandamus and injunction and ordered Labor Arbiter Daniel C. Cueto to immediately resolve respondent E &
R Security Agency’s Urgent Motion to Quash Writ of Execution.

Hence, this petition. 15

The sole issue raised is whether or not the NLRC committed grave abuse of discretion in ordering the Labor
Arbiter to resolve the motion to quash alias writ of execution.

Petitioner contends that the release of the judgment award is purely a ministerial duty of the Labor Arbiter.

The petition is impressed with merit.

Execution is the final stage of litigation, the end of the suit. It can not be frustrated except for serious
reasons demanded by justice and equity. 16 In this jurisdiction, the rule is that when a judgment becomes
final and executory, it is the ministerial duty of the court to issue a writ of execution to enforce the
judgment. A writ of execution may however be refused on equitable grounds as when there was a change in
the situation of the parties that would make execution inequitable or when certain circumstances, which
transpired after judgment became final, rendered execution of judgment unjust. 17 The fact that the
decision has become final does not preclude a modification or an alteration thereof because even with the
finality of judgment, when its execution becomes impossible or unjust, it may be modified or altered to
harmonize the same with justice and the facts. 18

The respondent agency’s contention that there has been a change in the situation of the parties making
execution inequitable because petitioner accepted employment from another agency without resigning from
it is patently without merit. In the recent ruling of the Court, we said that the rule enunciated in Pines City
19 no longer controls. Now, the rule is that back wages awarded to an illegally dismissed employee shall not
be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal.
20

In this particular case, the decision is final and, in fact, the amount of P105,396.00 representing the sum
total of the salary differentials and back wages awarded to petitioner has been garnished from the account
of respondent agency with the Philippine National Bank (PNB) with no opposition or resistance and it is the
ministerial duty of the Labor Arbiter to release the money to petitioner.

WHEREFORE, the Court GRANTS the petition. The resolution of the National Labor Relations Commission in
NLRC NCR Case No. 00-01-00137-90 is hereby SET ASIDE. The Court DIRECTS the Labor Arbiter to order
the immediate release of the balance of the judgment award to petitioner.

No costs.

SO ORDERED. chanroblesvi rt ual|awlib rary

JOSE P. ARTIFICIO, G.R. No. 172988

Petitioner,

Present:

CORONA, C.J.,
- versus - Chairperson,
VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.

NATIONAL LABOR RELATIONS

COMMISSION, RP GUARDIANS
SECURITY AGENCY, INC., JUAN Promulgated:
VICTOR K. LAURILLA, ALBERTO
AGUIRRE, and ANTONIO A. July 26, 2010
ANDRES,
Respondents.

x--------------------------------------------------x

DECISION

PEREZ, J.:

The instant petition for certiorari under Rule 45 seeks to set aside the
Decision[1] dated 31 March 2006, as well as the Resolution[2] dated 1 June 2006, of
the Court of Appeals in CA-G.R. SP No. 88188. The appellate court affirmed the
Decision[3] dated 31 August 2004 of the National Labor Relations Commission
(NLRC) in NLRC NCR Case No. 00-08-05942-2002/NLRC CA No. 037809-03
finding that Petitioner Jose P. Artificio (Artificio) was not illegally dismissed and
ordering respondents to reinstate Artificio to his former position without loss of
seniority rights. The appellate court at the same time vacated and set aside the
decision of the Labor Arbiter dated 6 October 2003, in NLRC NCR Case No. 08-
05942-2002 that Artificio was illegally dismissed by the respondents.[4]

The pertinent facts are as follows:

Petitioner Jose P. Artificio was employed as security guard by respondent RP

Guardians Security Agency, Inc., a corporation duly organized and existing under
Philippine Laws and likewise duly licensed to engage in the security agency
business.

Sometime in June 2002, Artificio had a heated argument with a fellow security
guard, Merlino B. Edu (Edu). On 25 July 2002, Edu submitted a confidential
report[5] to Antonio A. Andres (Andres), Administration & Operations Manager,
requesting that Artificio be investigated for maliciously machinating Edus hasty
relief from his post and for leaving his post during night shift duty to see his
girlfriend at a nearby beerhouse.

On 29 July 2002, another security guard, Gutierrez Err (Err), sent a

report [6] to Andres stating that Artificio arrived at the office of RP Guardians
Security Agency, Inc. on 25 June 2002, under the influence of liquor. When Artificio
learned that no salaries would be given that day, he bad-mouthed the employees of
RP Guardians Security Agency, Inc. and threatened to arson their office.

The report reads:

Sir:

On or about 1710 hrs. June 25, 2002 PSG ARTIFICIO JOSE assigned to
BF CITYLAND CORPORATION, under influence of liquor arrived to (sic) TLC
BLDG. To verify their salaries to RP GUARDIANS SECURITY AGENCY
EMPLOYEES. After knowing (sic) no (sic) salaries to received on that time or
day, he irked (sic) and bad (sic) mounting all employee of RP GUARDIANS
OFFICE and before leaving the TLC Bldg. (sic) He shouted to arson (sic) the RP
GUARDIANS OFFICE, on that moment I (sic) pacifying him to RAMBO, PSG
ARTIFICIO JOSE but he ignored me.[7]

On even date, Andres issued a Memorandum[8] temporarily relieving Artificio

from his post and placing him under preventive suspension pending investigation for
conduct unbecoming a security guard, such as, abandonment of post during night
shift duty, light threats and irregularities in the observance of proper relieving
time. He also directed Artificio to report to the office of RP Guardians Security
Agency, Inc. and submit his written answer immediately upon receipt of the
memorandum.

In another memorandum, Andres informed Artificio that a hearing will be

held on 12 August 2002.[9]

Without waiting for the hearing to be held, Artificio filed on 5 August 2002,
a complaint for illegal dismissal, illegal suspension, non-payment of overtime pay,
holiday pay, premium pay for holiday and rest days, 13 th month pay, and
damages. He also prayed for payment of separation pay in lieu of reinstatement.[10]

After hearing, the Labor Arbiter rendered a decision dated 6 October 2003,
finding respondents guilty of illegal suspension and dismissal. It ruled that Edus
allegation of irregularity in the observance of relieving time was not specifically
detailed. Since Edu had an axe to grind against Artificio, his allegation should be
taken with utmost caution. It was also held that Artificio should have been allowed
to confront Edu and Err before he was preventively suspended. Since he was denied
due process, his preventive suspension was illegal. Such preventive suspension
ripened into illegal dismissal. The Labor Arbiter explained that:
On July 29, 2002, complainant received two (2) separate Memoranda from his
employer. One Memo immediately placed him under preventive suspension
effective that very day. It further directed him to report to this Office and submit an
answer in writing immediately upon receipt of this Memo x x x. Complainant
received this at about 2:00 P.M., July 29, 2002.

Another Memo, likewise dated July 29, 2002, and also received on the same day
by complainant directed him to appear before this Office on Monday, August 12,
2002 (10:00 A.M.) to answer the charges leveled against you x x x.

A sensible person who received two separate Memo directing him first to answer
in writing immediately; and, second, to appear on August 12, 2002 would be
confused, to say the least. How much more herein complainant who might have felt
that the whole [world] had fallen on him on that fateful day of July 29, 2002 as he
received Memos (with attached letter-accusations) after another.

Feeling aggrieved and confused, he sought the assistance of this tribunal to air his
predicament and plight. This should not be taken against him. It should be borne in
mind that when he was directed to immediately answer in writing, he did not stand
on equal footing with his superiors.

From the foregoing, the suspensions of complainant, is illegal. And under the
peculiar circumstances, this illegal suspension ripened into an illegal dismissal.

Even as the complainant does not seek reinstatement when he filed this cases, he is
nevertheless entitled to backwages, albeit limited. Complainant is also entitled to
separation pay in lieu of reinstatement, the computation thereof to be reckoned not
from 1979 but only from 1986.

As to money claims, the supporting documents submitted by the respondents prove

that other than the payment of ECOLA and the refund of the P30.00 monthly Trust
Fund, herein complainant had been duly paid of his money claims.[11]

The fallo of the decision rendered by the Labor Arbiter reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered

declaring respondents guilty of illegal suspension/lay-off and illegal dismissal.

Since the complainant does not seek reinstatement, he is entitled to limited

backwages and separation pay.

Respondent [RP]. Guardian Security Agency, Inc., is hereby ordered to pay

complainant as follows:
 1. Limited backwages computed from July 29, 2002 up to the date of this Decision
in the amount of P217,033.79;
2. In lieu of reinstatement, separation pay equivalent to one-half (1/2) months salary
for every year of service computed from 1986 in the amount
of P81,507.60;
3. ECOLA from November 5, 2001 up to July 31, 2002, in the amount
of P6,628.50[;] and
4. Refund of P30.00 monthly contribution to Trust Fund in the amount
of P5,970.00;

5. Ten percent (10%) of the total award as attorneys fees in the amount
of P31,113.99.

All other claims herein sought and prayed for are hereby denied for lack of
legal and factual bases.[12]

On appeal, the NLRC, in a Decision[13] dated 31 August 2004, set aside the
decision of the Labor Arbiter. It ruled that the Labor Arbiter erred in considering
preventive suspension as a penalty. While it is true that preventive suspension can
ripen into constructive dismissal when it goes beyond the 30-day maximum period
allowed by law, such is not prevailing in this case since Artificio immediately filed
a complaint before the labor tribunal. It added that it was Artificio who terminated
his relationship with respondents when he asked for separation pay in lieu of
reinstatement although he has not yet been dismissed. The NLRC clarified further
that:

x x x While it is true that preventive suspension can ripen into a constructive

dismissal when such goes beyond the 30 day maximum period allowable by law,
such is not prevailing in the case at bar as it was complainant who chose to file a
complaint and have due process before the courts of law. It was complainant who
terminated the relationship with respondents by asking for separation pay in lieu of
reinstatement when the fact of dismissal has not yet happened. From the documents
presented, complainant was put on preventive suspension pending investigation of
company violations which were supported by documentary evidences on July 29,
2002. He was set to be heard on August 12, 2002 but before the respondents could
hear his side, he filed this instant complaint on August 5, 2002, pre-empting the
administrative investigation undertaken by respondents.[14]

In the end, the NLRC decreed:

WHEREFORE, premises considered, the decision of the Labor Arbiter is
hereby VACATED and SET ASIDE and a new one entered, ordering respondents
 to reinstate complainant to his former position without loss of seniority rights. All
other claims are hereby dismissed for lack of merit.[15]

The motion for reconsideration filed by Artificio was denied for lack of merit
by the NLRC in a resolution dated 29 October 2004.[16]

Artificio next filed a petition for certiorari before the Court of Appeals
docketed as CA G.R. SP No. 88188. On 31 March 2006, the Court of Appeals
rendered a decision which affirmed the NLRC decision.[17] Artificio filed a motion
for reconsideration which the Court of Appeals again denied for lack of merit in a
resolution dated 1 June 2006, hence, the instant petition raising the following issues:

I.
WHETHER OR NOT PETITIONER MAY BE TERMINATED FROM HIS
EMPLOYMENT ON THE VERY DATE HE RECEIVED A LETTER FOR HIS
PURPORTED RELIEF WITHOUT FIRST BEING GIVEN
AN OPPORTUNITY TO ANSWER THE CHARGES LEVELED AGAINST
HIM AND BEING INFORMED OF [THE] NATURE AND CAUSE OF HIS
DISMISSAL.

II.
WHETHER OR NOT PETITIONER MAY BE VALIDLY SUSPENDED FOR
AN INDEFINITE PERIOD WITHOUT BEING CONSIDERED DISMISSED
CONSTRUCTIVELY FROM HIS EMPLOYMENT.

III.
WHETHER OR NOT THE PUBLIC RESPONDENT COURT OF APPEALS
ERRED IN AFFIRMING THE ASSAILED RESOLUTIONS OF THE NLRC
WHICH MISTAKENLY APPLIED THE RULING IN GLOBE-MACKAY AND
RADIO VS. NLRC, G.R. NO. 82511, MARCH 3, 1992 TO THE INSTANT
CASE.

IV.
WHETHER OR NOT AN EMPLOYEE WHO LOYALLY AND EFFICIENTLY
SERVED HIS EMPLOYER FOR TWENTY THREE (23) YEARS BE VALIDLY
TERMINATED FROM EMPLOYMENT WITHOUT VIOLATING HIS RIGHTS
TO DUE [PROCESS] ON THE PRETEXT OF A PURPORTED CHARGE
WHICH DID NOT SET FORTH THE DETAILS, PLACE, AND TIME OF THEIR
ALLEGED COMMISSION.

V.
 WHETHER OR NOT THE PUBLIC RESPONDENT COURT OF APPEALS
GRAVELY ERRED IN NOT GIVING CREDENCE TO THE FINDINGS OF
FACTS OF THE LABOR ARBITER WHICH HAS A FIRST HAND AND
DIRECT CONTACT WITH THE PARTY-LITIGANTS.

VI.
WHETHER OR NOT AN EMPLOYEE WHOSE RELATIONSHIP WITH HIS
EMPLOYER WAS STRAINED BY THE FILING OF A LEGITIMATE LABOR
COMPLAINT BE CORRECTLY ORDERED REINSTATED.[18]

Artificio maintains that he was illegally suspended since his preventive

suspension was for an indefinite period and was imposed without investigation. He
also argues that he was illegally dismissed because the charges against him were
couched in general and broad terms. Further, he was not given any notice requiring
him to explain his side.

Respondents counter that Artificio was not dismissed but merely placed under
preventive suspension pending investigation of the charges against him.

Sections 8 and 9 of Rule XXIII, Implementing Book V of the Omnibus Rules

Implementing the Labor Code provides:

SEC. 8. Preventive suspension. The employer may place the worker

concerned under preventive suspension if his continued employment poses a
serious and imminent threat to the life or property of the employer or of his co-
workers.

SEC. 9. Period of suspension. No preventive suspension shall last longer

than thirty (30) days. The employer shall thereafter reinstate the worker in his
former or in a substantially equivalent position or the employer may extend the
period of suspension provided that during the period of extension, he pays the
wages and other benefits due to the worker. In such case, the worker shall not be
bound to reimburse the amount paid to him during the extension if the employer
decides, after completion of the hearing, to dismiss the worker.

As succinctly stated above, preventive suspension is justified where the

employees continued employment poses a serious and imminent threat to the life or
property of the employer or of the employees co-workers. Without this kind of
threat, preventive suspension is not proper.[19]

In this case, Artificios preventive suspension was justified since he was

employed as a security guard tasked precisely to safeguard respondents client. His
continued presence in respondents or its clients premises poses a serious threat to
respondents, its employees and client in light of the serious allegation of conduct
unbecoming a security guard such as abandonment of post during night shift duty,
light threats and irregularities in the observance of proper relieving time.

Besides, as the employer, respondent has the right to regulate, according to its
discretion and best judgment, all aspects of employment, including work
assignment, working methods, processes to be followed, working regulations,
transfer of employees, work supervision, lay-off of workers and the discipline,
dismissal and recall of workers. Management has the prerogative to discipline its
employees and to impose appropriate penalties on erring workers pursuant to
company rules and regulations.

This Court has upheld a companys management prerogatives so long as they

are exercised in good faith for the advancement of the employers interest and not for
the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements.[20]

This delineation of management prerogatives is relevant to the observation of

the NLRC that:

x x x even assuming that one of the fellow guards, PSG Edu had an axe to grind
against complainant thats why he wrote the letter asking for the latters investigation
on certain violations he has committed, the allegation that complainant committed
irregularity on companys policy on relieving time was amply supported by the
logbook. In fact, the labor arbiter in her decision even cited that accusation boils
[down] to the alleged irregularity of complainant in the observance of relieving of
time. Further, on July 25, 2002, complainant was again reported for reporting under
the influence of liquor and badmouthed respondents employees with threat to arson
the respondents office. Such report came from another guard in the name of PSG
Gutierrez, who had no axe to grind against complainant. The allegation was also
not denied by complainant. Respondents therefore could not be faulted in putting
complainant under preventive suspension pending investigation of his alleged acts
especially that he was the head guard.[21]

These observations can no longer be disturbed. They are now established facts
before us.
Significantly, Artificio regrettably chose not to present his side at the
administrative hearing scheduled to look into the factual issues that accompanied the
accusation against him. In fact, he avoided the investigation into the charges by
filing his illegal dismissal complaint ahead of the scheduled investigation. He, on
his own decided that his preventive suspension was in fact illegal dismissal and that
he is entitled to backwages and separation pay. Indeed, Artificio would even reject
reinstatement revealing his bent to have his own way through his own means. As
aptly noted by the NLRC, Artificio preempted the investigation that could have
afforded him the due process of which he would then say he was denied.

That resolved, we next proceed to the benefits due Artificio.

As already mentioned, after Artificio was placed under preventive suspension

on 29 July 2002, he forthwith, or on 5 August 2002, filed a complaint for illegal
dismissal and illegal suspension. From that date until the present, he has insisted on
his submission that he was illegally dismissed and that he is not seeking
reinstatement as in fact right from the start, his prayer was for separation pay. Having
determined that the imposition on Artificio of preventive suspension was proper and
that such suspension did not amount to illegal dismissal, we see no basis for the grant
of backwages.

Nonetheless, given the attendant circumstances in this case, namely, that

Artificio had been working with the company for a period of sixteen (16) years and
without any previous derogatory record, the ends of social and compassionate justice
would be served if Artificio be given some equitable relief in the form of separation
pay.[22]

Artificio is entitled to separation pay considering that while reinstatement is

an option, Artificio himself has never, at anytime after the notice of preventive
suspension intended to remain in the employ of private respondents.

WHEREFORE, the instant petition is PARTIALLY GRANTED. The

Decision dated 31 March 2006, as well as the Resolution dated 1 June 2006, of the
Court of Appeals in CA-G.R. SP No. 88188 are hereby AFFIRMED with the
modification that, in lieu of reinstatement, separation pay be granted to Artificio
computed at the rate of one (1) month pay for every year of service reckoned from
the start of his employment with the respondents in 1986 until 2002.

No costs.
SO ORDERED.

[G.R. No. 190559 : March 07, 2012]

BLUE SKY TRADING COMPANY, INC. AND/OR JOSE TANTIANSU AND LINDA TANTIANSU,
PETITIONERS, VS. ARLENE P. BLAS AND JOSEPH D. SILVANO, RESPONDENTS.

DECISION

REYES, J.:

The Case

Before us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court assailing the October
26, 2009 Decision[2] and the December 14, 2009 Resolution[3] of the Court of Appeals (CA) in CA G.R. SP No.
108432. The dispositive portion of the assailed decision reads: cralaw

WHEREFORE, premises considered, the instant Petition is GRANTED. The challenged resolution of the
NLRC dated 30 January 2009 is hereby REVERSED and SET ASIDE. Accordingly, the Decision of the NLRC
dated 29 November 2007 is hereby REINSTATED.

SO ORDERED.[4]

The assailed resolution denied the petitioners' Motion for Reconsideration[5] to the foregoing.

Antecedent Facts

Petitioner Blue Sky Trading Company, Inc. (Blue Sky) is a duly registered domestic corporation engaged in
the importation and sale of medical supplies and equipment. Petitioner Jose G. Tantiansu, Jr. (Jose) is Blue
Sky's vice president for operations while petitioner Linda G. Tantiansu (Linda) is its assistant corporate
secretary. The respondents Arlene P. Blas (Arlene) and Joseph D. Silvano (Joseph) were regular employees
of Blue Sky and they respectively held the positions of stock clerk and warehouse helper before they were
dismissed from service on February 5, 2005.

On January 29, 2005, Lorna N. Manalastas (Lorna), Blue Sky's warehouse supervisor, wrote Jose a
memorandum[6] informing the latter that six pairs of intensifying screens were missing. Lorna likewise stated
that when a certain “Boy” conducted an inventory on October 2004, the screens were still completely
accounted for.

On January 31, 2005, Helario Adonis, Jr. (Helario), warehouse personnel, was summoned by Linda, Jose's
wife Alice Tantiansu, and human resources department head Jean B. De La Paz (Jean). Helario was asked to
admit his participation in the theft of the missing screens. While he was offered to be paid a separation pay
if he would confess complicity with the alleged theft, he pleaded utter innocence.

On February 1, 2005, Jean notified Helario of his termination from service on the ground of his failure to
properly account for and maintain a balance of the company's stock inventories, hence, resulting in Blue
Sky's loss of trust and confidence in him.[7] The day after, Blue Sky promptly filed with the Department of
Labor and Employment (DOLE) an establishment termination report[8] indicating therein Helario's dismissal
from service for cause.

On February 3, 2005, Jean issued notices to explain/preventive suspension[9] to Arlene, Joseph, delivery
personnel Jayde Tano-an (Jayde) and maintenance personnel/driver Wilfredo Fasonilao (Wilfredo). The
notices informed them that they were being accused of gross dishonesty in connection with their alleged
participation in and conspiracy with other employees in committing theft against company property,
specifically relative to the loss of the six intensifying screens. They were placed under preventive suspension
pending investigation and were thus required to file their written explanations within 48 hours from receipt
of the notices.

On February 4, 2005, Arlene submitted to Jean a handwritten memorandum denying knowledge or

complicity with the theft of the intensifying screens. In part, the memorandum reads:

I'm not the supervisor of that dep't. para tanungin sa lahat ng nangyayari. Second, hindi naman ako ang
nag-inventory ng stocks na yan. Third, nag-oout lang ako ng stocks kapag wala sila at kailangan na ang
stocks. And lastly, ano ba talaga ang trabaho ko dito, kc all I know is pag-re-record ng stocks but parang
lumalabas guard ako na kailangan kong malaman ang lahat ng kilos at galaw ng lahat ng employee dito.
Dahil ako lagi ang tinatanong tungkol sa nangyayari sa mezz. Bakit ako lang ba ang tao doon? So it means
that, dapat lahat kami ay may memo para mag-explain regarding that matter. Maging fair naman kayo sa
akin.

Anyway, regarding sa nawawalang IS, ang alam ko inim-ventory ni Kuya Boy yan last Oct. According to him,
complete daw lahat yun. Nang bumaba si Sir Jun mga last week ng Dec. para magpalinis ng stocks, na-
found out nya na kulang ang stocks. So we did, we compare the bincard to the stockcard. But tally silang
pareho. Kaya, we did we trace it is sa mga possible records like shipment sa Cebu or sales. But wala doon.
Ang naiisip naming dahilan ay baka nagpakabit si Ate Lorna ng cassette with IS sa technical and she forgot
to report it. Yun lang ang possible reason na alam ko. At wala na akong alam pang iba. x x x[10]

On the other hand, Joseph proffered the following explanation:

Tungkol po sa nawawalang intensifying screen, wala po akong alam. Kasi po sa messanin[,] pumapasok lang
po ako pag may inutos o may pagagawa, tsaka hindi po ako naghahanda ng lumang stocks. Nagbababa po
kami ng stock at nag-aakyat sa 2nd flor pag kami po ay inutusan ng nakakataas sa akin o may katungkulan.
Yun lang po ang aking trabaho sa mesanin. Eto lang po ang aking masasabi.[11]

Jayde and Wilfredo also filed their written explanations denying any involvement in the theft which took
place and professing their dedication and loyalty to Blue Sky.[12]

On February 5, 2005, Jean issued to Arlene, Joseph, Jayde and Wilfredo notices of dismissal for
cause[13]stating therein that evidence that they had conspired with each other to commit theft against
company property was too glaring to ignore. Blue Sky had lost its trust and confidence on them and as an
act of self-preservation, their termination from service was in order.

On February 7, 2005, Blue Sky filed with the DOLE an establishment termination report stating therein the
dismissal of Arlene, Joseph, Jayde and Wilfredo.[14]

On February 8, 2005, Arlene, Joseph, Helario, Jayde and Wilfredo filed with the National Labor Relations
Commission (NLRC) a complaint for illegal dismissal and suspension, underpayment of overtime pay, and
non-payment of emergency cost of living allowance (ECOLA), with prayers for reinstatement and payment of
full backwages. The complaint was docketed as NLRC NCR Case No. 00-02-01351-05.

Meanwhile, an entrapment operation was conducted by the police during which Jayde and Helario were
caught allegedly attempting to sell to an operative an ultrasound probe worth around P400,000.00 belonging
to Blue Sky. On April 22, 2005, Quezon City Inquest Prosecutor Arleen Tagaban issued a
resolution[15] recommending the filing in court of criminal charges against Jayde and Helario.

On May 2005, before the complaint which was filed with the NLRC can be resolved, Helario, Jayde and
Wilfredo executed affidavits of desistance[16] stating therein that their termination by Blue Sky was for cause
and after observance of due process.
 The Ruling of the Labor Arbiter

On November 17, 2005, Labor Arbiter Gaudencio P. Demaisip, Jr. (LA Demaisip) dismissed the complaint
relative to Helario, Jayde and Wilfredo as a consequence of their filing of the affidavits of desistance. As to
Arlene and Joseph, LA Demaisip denied their claims of illegal suspension and dismissal and for payment of
ECOLA and overtime pay based on the following grounds:

[T]he duties of Ms. Blas [Arlene] was to take out stocks. Also, Mr. Silvano's [Joseph] work consisted of
removing, storing, or furnishing of “stocks” or supplies.

Further, Ms. Blas [Arlene] was tasked to make written monitoring of “stocks” or supplies.

Complainants therefore, are charged with the care and custody of respondents' property. They may not be
given such functions or allowed entrance and exit from respondents' bodega if they were untrustworthy.

Indeed, the functions consisting of removing, storing, furnishing, monitoring and gaining ingress to and
egress from the “bodega”, where the “stocks” or supplies are kept, involved trust and confidence.

Article 282 of the Labor Code allows the employer to terminate the services of the employees, among
others, for breach of trust and confidence.

Loss of confidence however, apply (sic) to the following: x x x (2) to those situations where the employee is
routinely charged with the care and custody of the employer's money or property such as auditors, cashier;
property custodians, or those who regularly handle significant amount of money or property.

The dismissal must rest on actual breach of duty committed by the employee.

Further, proof beyond reasonable doubt is not necessary. It is sufficient if there is some basis for such loss
of confidence.

xxx

The basis, for the dismissal of the complainants, is the fact that six (6) pairs of assorted sizes of Intensifying
Screen of the company at the bodega were lost x x x.

An entrapment was conducted against Tano-an [Jayde] and Adonis [Helario] x x x:

xxx

Simply put, the contention, about the missing items or supplies, is credible and reliable.

It is not necessary that proof of taking or conspiracy must exist.

The existence of the fact, that items or supplies were missing at the bodega of the company, would suffice
to prove loss of confidence.

Complainants failed in their duties to exercise utmost protection, care, or custody of respondent's property.
Hence, their dismissal from the service is warranted.

xxx

Claims for ECOLA and overtime pay were not discussed by the complainants[,] hence, they should be
denied.[17]

Arlene and Joseph assailed before the NLRC the decision rendered by LA Demaisip.[18]

The Rulings of the NLRC

On November 29, 2007, the NLRC ordered the reinstatement of Arlene and Joseph and the payment to them
of full backwages and ten percent attorney's fees. The decision, in part, reads:
[T]he respondents [Blue Sky, Jose and Linda] accused complainants [Arlene and Joseph] of theft of
company property. It was, thus, incumbent upon the respondents to prove the alleged theft by the
appellants [Arlene and Joseph] with clear and substantial evidence. A reading of the record will, however,
show that respondents have not presented any evidence to show the involvement of the complaint [sic]
Arlene Blas and Joseph Silvano x x x in the theft. To start with, appellants were not caught red handed. No
specific acts or deeds were imputed upon appellants to prove the allegation that they committed theft
against the respondents. While there may be articles which may have been lost, the respondents have not
shown how these were lost and how appellants participated in the theft. The fact that appellants had access
to the lost items is not sufficient to prove their guilt. As shown, there were several other persons who had
unlimited access to the warehouse where the items stolen were stacked. No witnesses were also presented
implicating appellants in the theft.

As it is, all respondents have are general allegations that appellants conspired with the other complainants
in stealing the lost items. Allegations, no matter how convincing they may sound, while they remain to be
so, cannot be considered as clear and substantial evidence sufficient to justify the dismissal of an employee.
While proof beyond reasonable doubt is not required, still respondents should have presented substantial
evidence to support the grounds they have relied upon. x x x

xxx

Finally, [w]e do not see appellants as holding positions of trust and confidence. Before an employee may be
dismissed due to willful breach of trust, he must hold a position of trust and confidence (Estiva [v]s. NLRC,
G.R. No. 95145, August 5, 1993). A position of trust and confidence is one where a person is entrusted with
confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s
property (Panday vs. NLRC, G.R. No. 67664, May 20, 1994) and/or funds (Gonzales vs. NLRC, 335 SCRA
197).

Appellant Arlene Blas is a Stock Clerk while Joseph Silvano is a warehouse helper. While they may have
access to the lost items, they were not entrusted with confidence on delicate matters or custody of the
employer's property. They do not have the authority to withdraw, transfer or release items in the
warehouse. They are mere low keyed employees who deal with the handling of stocks only when ordered to
by their superiors.[19]

Both parties filed their motions for reconsideration[20] to the foregoing.

Claiming that their relations with Blue Sky had been strained, Arlene and Joseph sought the payment of
separation pay, in lieu of reinstatement. Further, they lamented that the NLRC failed to specifically address
the issue relative to their monetary claims. Hence, they reiterated the said claims, in addition to service
incentive leave and 13th month pay for the year 2005, arguing that the burden to prove payment
of benefits pertained to Blue Sky which miserably failed in this regard.

On the other hand, Blue Sky averred that substantial evidence existed to support its claim that Arlene and
Joseph participated in, or at the least knew about, the theft of the missing screens.

On January 30, 2009, the NLRC issued a resolution reversing its earlier decision and reinstating LA
Demaisip's dismissal of the complaint filed by Arlene and Joseph on the basis of the following:

In our Decision promulgated on November 29, 2007, we advanced the view that complainants Blas [Arlene]
and Silvano [Joseph] were ordinary employees not occupying positions of trust, without however taking a
profound appreciation of the fact that complainants' duties as “stock clerk” and “warehouse helper” routinely
involved having unlimited access to company's properties and stocks. The fact that same properties which
were subject of losses and thievery as established from the subsequent entrapment operations conducted by
the respondents with the assistance of PNP operatives against the two (2) other complainants, namely Jayde
[Tano-an] and Helario Adonis, who are presently facing charges for attempting to sell respondents' property,
convinced this Commission to reconsider its previous finding and be in agreement with the respondents'
position.

xxx

While we are not unmindful of the fact that complainants Blas and Silvano were not part of the group who
were apprehended during the entrapment operations, however, had they not been remiss in their respective
duties [as] “stock clerk” and “warehouse helper” or not aided their former co-workers Tano-an and Adonis,
thievery or losses of company's property could not have been committed.

xxx

The loss of company's property having been substantially proven, complainants Blas [Arlene] and Silvano
[Blas] cannot just make a general denial and wash their hands clean. Their termination not only due to loss
of trust but also for gross neglect of duties is therefore found justified. x x x

xxx

Finally, as regards complainants' claim for alleged unpaid 13th month pay and service incentive leave pay
for 2005, contrary evidence however showed that respondents [Blue Sky] had paid the said claims as shown
by the payment of their final monetary benefits which the complainants had duly received.[21]

Aggrieved, Arlene and Joseph filed before the CA a Petition for Certiorari[22] under Rule 65 of the Rules of
Court to challenge the above quoted NLRC resolution.

The Ruling of the CA

In the decision rendered on October 26, 2009, which is now the subject of the instant petition, the CA found
merit in the claims advanced by Arlene and Joseph. In reversing the January 30, 2009 Resolution of the
NLRC, the CA ratiocinated that:

Prefatorily, the basic requisite for dismissal on the ground of loss of trust and confidence is that the
employee concerned must be one holding a position of trust and confidence. A position of trust and
confidence is one where a person is entrusted with confidence on delicate matters, or with the custody,
handling or care and protection of the employer's property. And, in order to constitute a just cause for
dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to
continue to work for the employer.

In General Bank and Trust Company vs. Court of Appeals, the Supreme Court laid down the following
guidelines for the application of the doctrine of loss of confidence as a justification in the termination of
erring employees, viz:

(a) loss of confidence which should not be simulated;

(b) it should not be used as a subterfuge for causes which are improper, illegal or unjustified;

(c) it should not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and

(d) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.

xxx

To [o]ur mind, the NLRC is correct insofar as it considered the nature of [p]etitioner BLAS and [p]etitioner
SILVANO as stock clerk and warehouse helper, respectively, as positions of trust and confidence. On account
of their positions in the company, the [p]etitioners were given access to the [r]espondents' warehouse
w[h]ere the company products and goods are kept. Likewise, by the nature of the work the [p]etitioners
performed for the [r]espondents, it is logical to conclude that the former were charged with the custody of
[r]espondents' property, thus making their positions as one reposed with trust and confidence.

However, [w]e hold that the [r]espondents failed to sufficiently establish the charge against [p]etitioners
which was the basis for its loss of trust and confidence that warranted their dismissal. Concededly, it is
settled that proof beyond reasonable doubt is not required in dismissing an employee on the ground of loss
of trust and confidence. It is sufficient that there is some basis for such loss of confidence or that there must
be some reasonable grounds to believe, if not to entertain the moral conviction that the employee concerned
is responsible for the misconduct and that the nature of his participation therein rendered him absolutely
unworthy of trust and confidence demanded by his position. However, loss of confidence as a valid cause to
terminate an employee must nonetheless rest on actual breach of duty committed by the employee and not
on the employer's imagined whim or caprice.
Verily, [w]e are convinced that the [r]espondents failed to adduce any substantial proof showing that the
[p]etitioners committed an actual breach of their duty which destroyed the trust and confidence reposed
upon them by their employer. Clearly, there is no ample evidence to show that [p]etitioners conspired with
the thieves in stealing six (6) pairs of intensifying screens from [r]espondents['] warehouse. Nor is there
any shred of evidence that tends to prove that the [p]etitioners had a direct hand in the larceny committed
against the [r]espondents. In fact, the verity of the [p]etitioners' innocence on the thievery committed
against the [r]espondents was recognized by the NLRC in the assailed Resolution, viz:
xxx

While we are not unmindful of the fact that complainants Blas [Arlene] and Silvano [Joseph]
were not part of the group who were apprehended during the entrapment operations, however,
had they not been remiss in their respective duties [as] “stock clerk” and “warehouse helper” or
not aided their former co-workers Tano-an and Adonis, thievery or losses of company's property
could not have been committed. x x x

xxx

The ratiocination of the NLRC in reversing its initial pronouncement is that the [p]etitioners were “remiss” in
their duty is flawed. It bears noting that the NLRC offered no explanation to justify this finding nor is there
any scintilla of evidence in the records to support the conclusion that the [p]etitioners had aided, expressly
or impliedly, their former co-workers in committing theft against the company.[23] (Citations omitted)

The CA denied the petitioners' motion for reconsideration, hence, the instant petition.

The Issues

The petitioners submit the following for resolution:

I.

WHETHER OR NOT THE EVIDENCE ADDUCED BEFORE THE NLRC BY PETITIONERS ARE SUFFICIENT TO
ESTABLISH THE CHARGES WHICH WAS (sic) BASIS FOR THE LOSS OF TRUST AND CONFIDENCE AGAINST
RESPONDENTS[-]EMPLOYEES.

II.

WHETHER OR NOT THE CA WAS CORRECT IN GRANTING THE PETITION FOR CERTIORARI FILED BY
RESPONDENTS AND LATER, DENYING PETITIONERS' MOTION FOR RECONSIDERATION.[24]

The Petitioners' Arguments

In Salvador v. Philippine Mining Service Corporation,[25] it was ruled that proof beyond reasonable doubt of
the employee's misconduct or dishonesty is not required to justify loss of confidence, it being sufficient that
there is substantial basis for loss of trust. Thus, an employer should not be held liable for dismissing the
services of an employee sincerely believed to have at least known or participated in the commission of theft
against company property. The employer is not required to present proofs of the employee's actual taking or
unlawful possession of company property. In fact, in Dole Philippines, Inc. v. NLRC, et al.,[26] the court held
that where the dismissal for loss of confidence is based on suspected theft of company property on the part
of the employee, it remains a valid cause for dismissal even if the employee is subsequently acquitted.

It is immaterial that Arlene and Joseph were not among those who were entrapped attempting to sell an
ultrasound probe to a police operative. The nature of their tasks at Blue Sky and the fact of loss of the
intensifying screens dictated Arlene and Joseph's liabilities. Arlene's daily work routine involved (a) receiving
and releasing of stocks; and (b) preparing stock cards for purposes of checking and monitoring the items in
the warehouse. On the other hand, Joseph carried and moved stocks in and out of the warehouse. The six
intensifying screens were discovered missing while Arlene, Joseph, Helario, Jayde and Wilfredo were
supposedly performing their tasks, hence, the logical inference that they conspired to commit the theft or at
least, knowingly allowed it to happen. Had the employees exercised due or even ordinary diligence to
protect company property, no loss would have been incurred. Further, the defense interposed by Arlene in
her written explanation that she was not employed by Blue Sky as a security guard, showed her utter lack of
concern for the company's welfare, which rendered her undeserving of an employer's trust and confidence.

Findings of fact of quasi-judicial agencies, like the NLRC, are accorded not only respect but even finality
when they are supported by substantial evidence.[27] Thus, the CA erred when it ruled that the NLRC gravely
abused its discretion in ordering the dismissal of the respondents' complaint.

The Respondents' Contentions

In their Comment,[28] the respondents cited Section 1, Rule 45 of the Rules of Court to argue that only
questions of law can be raised in a petition for review on certiorari. In the case at bar, the petitioners raise a
factual question, to wit, the alleged sufficiency of the evidence they presented to justify the dismissal of
Arlene and Joseph on the basis of loss of trust and confidence. The petitioners thus call for an examination
of the probative value of the evidence offered by the parties, which is beyond the province of a petition filed
under Rule 45 of the Rules of Court.

This Court's Ruling

While a petition for review on

certiorari under Rule 45 of the
Rules of Court generally precludes
us from resolving factual issues,
the instant case falls among the
exceptions as the LA, the NLRC
and the CA were at odds as to
their findings.

We deem it proper to first resolve the procedural challenge interposed by the respondents against the
instant petition and we find it lacking in merit.

It bears stating that Rule 45 limits us merely to the review of questions of law raised against the assailed CA
decision.[29] Further, the Court is generally bound by the CA's factual findings. The foregoing rules, however,
admit of exceptions, among which is when the CA's findings are contrary to those of the trial court or
administrative body exercising quasi-judicial functions from which the action originated.[30] The case before
us now falls under the aforementioned exception as the LA, NLRC and the CA were at odds as to their
findings.

Substantial evidence of actual

breach by an employee is required
from an employer to be able to
justify the former's dismissal from
service on the basis of an alleged
participation in theft of company
property. However, in the case at
bar, Blue Sky had failed to
discharge the burden of proof
imposed upon it.

We note that the petitioners essentially raise the sole question of whether they had proven by substantial
evidence the charges of theft against Arlene and Joseph which led to the latter's termination from service on
the ground of loss of trust and confidence.
We rule in the negative.

In Functional, Inc. v. Samuel Granfil,[31] we declared:

The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is
upon the employer to show that the employee’s termination from service is for a just and valid cause. The
employer’s case succeeds or fails on the strength of its evidence and not on the weakness of that adduced
by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter
in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the
quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion, even if other equally reasonable minds might
conceivably opine otherwise. Failure of the employer to discharge the foregoing onus would mean that the
dismissal is not justified and therefore illegal.

Further, in Baron v. NLRC,[32] we held that for there to be a valid dismissal based on loss of trust and
confidence, the breach of trust must be willful, meaning it must be done intentionally, knowingly, and
purposely, without justifiable excuse.

In the case at bar, we agree with the petitioners that mere substantial evidence and not proof beyond
reasonable doubt is required to justify the dismissal from service of an employee charged with theft of
company property. However, we find no error in the CA's findings that the petitioners had not adequately
proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission
of theft relative to the six missing intensifying screens so as to justify the latter's termination from
employment on the ground of loss of trust and confidence.

Blue Sky alleged that Arlene, who was a stock clerk, and Joseph, a warehouse helper, had free access to the
missing items. Arlene, who kept the stock cards, was supposed to be monitoring on a daily basis the
incoming and outgoing stocks stored in or taken out of the warehouse. Joseph took the stocks from the
warehouse to the vehicles for transport or delivery purposes. Arlene and Joseph averred otherwise. They
insisted that they were mere lowly employees who did not have actual custody of company property,
specifically, of the missing items. Arlene claimed that she was not responsible for conducting inventories and
that she released stocks only when urgently necessary and only in the absence of those authorized to do so.
Joseph alleged that he only went to the mezzanine, where the missing items were stored, when ordered to
do so by his superiors.

We note that the parties disagree as to what tasks were actually and regularly performed by Arlene and
Joseph. They are at odds as to the issue of whether or not Arlene and Joseph had custody of the missing
screens. We observe though that neither of the parties presented any documentary evidence, such as
employment contracts, to establish their claims relative to the actual nature of Arlene and Joseph's daily
tasks. It bears emphasizing though that the photocopies of the identification cards issued by Blue Sky, which
were annexed to the respondents' position paper filed with the LA, indicated that Arlene was assigned at the
customer service department while Joseph was part of the warehouse department.[33]

During the entrapment operation conducted by police operatives, Jayde and Helario were caught attempting
to sell an ultrasound probe allegedly belonging to Blue Sky. Thereafter, Jayde, Helario and Wilfredo
withdrew their complaints for illegal dismissal against the company. Arlene and Joseph, however, pursued
their claims. Nonetheless, Blue Sky construed the result of the entrapment operation to mean that there was
a conspiracy among the five employees to commit theft of company property. In the reply filed by the
petitioners to the respondents' position paper filed before the LA, the former alleged that in a letter, Jayde,
Helario and Wilfredo implicated Arlene and Joseph as participants and conspirators in the commission of
theft.[34] However, we note that the petitioners' allegation was bare since the letter supposedly written by
Jayde, Helario and Wilfredo was not offered as evidence. Further, Blue Sky alleged that the ultrasound probe
was among the items found missing in the inventory conducted in December 2004. We observe though that
the employees were dismissed for alleged theft of six intensifying screens. In the termination notices, no
references were made at all to a missing ultrasound probe.

Further, we notice that both parties mentioned a certain “Boy” who conducted the inventory in October
2004. There is no dispute that at that time, the six intensifying screens were still completely accounted
for. Further, Arlene and Joseph claimed that it was Lorna who had control and custody of the stocks as she
was the warehouse supervisor. “Boy” and Lorna were not called upon by either of the parties to corroborate
their claims. “Boy” and Lorna could have provided important information as to the time line and the manner
the intensifying screens were lost. If “Boy” and Lorna remain under Blue Sky's employ, it is the company
which is in a better position to require the two to execute affidavits relative to what they know about the
missing screens.

The petitioners also argue that if Arlene and Joseph had not been grossly negligent in the performance of
their duties, Blue Sky would not have incurred the loss. We observe though that in the notices sent to Arlene
and Joseph, first charging them with theft, and later, informing them of their dismissal from service, gross
negligence was not stated therein as a ground. Hence, Arlene and Joseph could not have defended
themselves against the charge of gross negligence. They cannot be dismissed on that ground lest due
process be violated.

Only the following had been established without dispute: (a) the fact of loss of the six intensifying screens;
(b) an entrapment operation was successfully conducted by the police operatives who caught Jayde and
Helario in the act of attempting to sell an ultrasound probe which allegedly belonged to Blue Sky; and (c)
Jayde, Helario and Wilfredo filed their affidavits of desistance to withdraw their complaints for illegal
dismissal against Blue Sky while Arlene and Joseph pursued their complaints.

In its November 29, 2007 Decision, the NLRC found that Arlene and Joseph, a stock clerk and a warehouse
helper, respectively, did not have unlimited access to or custody over Blue Sky's property. The CA, in the
decision and resolution assailed herein, while ordering the reinstatement of the November 29, 2007 NLRC
Decision, found that Arlene and Joseph exercised custody over company property. Be that as it may, we
observe that the nature of Arlene and Joseph's regular duties while under Blue Sky's employ and their
specific participation in or knowledge of the theft of the intensifying screens remain uncertain. Thus,
whether or not Arlene and Joseph had actual custody over company property, we agree with the CA that the
petitioners had failed to establish by substantial evidence the charges which led to Arlene and Joseph's
dismissal from service.

While we empathize with Blue Sky's loss and understand that its actions were merely motivated by its intent
to protect the interests of the company, no blanket authority to terminate all employees whom it merely
suspects as involved in the commission of theft resides in its favor. We thus reiterate the doctrine
enunciated in Functional, Inc.[35] that the employer’s case succeeds or fails on the strength of its evidence
and not on the weakness of that adduced by the employee, in keeping with the principle that the scales of
justice should be tilted in favor of the latter in case of doubt in the evidence presented by them.

Notwithstanding our affirmation of the CA's finding that the petitioners had failed to discharge the burden
of proof imposed upon them to justify the dismissal of Arlene and Joseph, we deem it proper to modify the
assailed decision and resolution in the manner to be discussed hereunder.

Blue Sky committed no

impropriety in imposing
preventive suspension against
Arlene and Joseph pending
investigation of the theft allegedly
committed against the company.

We, however, find no merit in the challenge made by Arlene and Joseph against the legality of the
preventive suspension imposed by Blue Sky upon them pending the investigation of the alleged theft.

In Mandapat v. Add Force Personnel Services, Inc.,[36] we explained that preventive suspension may be
legally imposed on an employee whose alleged violation is the subject of an investigation. The purpose of
the suspension is to prevent an employee from causing harm or injury to his colleagues and to the
employer. The maximum period of suspension is 30 days, beyond which the employee should either be
reinstated or be paid wages and benefits due to him.

In Arlene and Joseph's case, Blue Sky issued to them notices to explain on February 3, 2005. They
submitted their written explanation the day after and they were dismissed from service on February 5,
2005. While we do not agree with Blue Sky's subsequent decision to terminate them from service, we find
no impropriety in its act of imposing preventive suspension upon the respondents since the period did not
exceed the maximum imposed by law and there was a valid purpose for the same.
In lieu of reinstatement, Arlene
and Joseph are entitled to an
award of separation pay.
If reinstatement proves impracticable, and hardly in the best interest of the parties, perhaps due to the
lapse of time since the employee’s dismissal, or if the employee decides not to be reinstated, the latter
should be awarded separation pay in lieu of reinstatement.[37]

In the case at bar, Arlene and Joseph were dismissed from service on February 5, 2005. We find that the
lapse of more than seven years already renders their reinstatement impracticable. Further, from the
stubborn stances of the parties, to wit, the petitioners' insistence that dismissal was valid on one hand, and
the respondents' express prayer for the payment of separation pay on the other, we find that reinstatement
would no longer be in the best interest of the contending parties.

Arlene and Joseph are entitled to the

payment of ECOLA, but not to 13th
month, service incentive leave and
overtime pay.
It is well-settled that in labor cases, the burden of proving payment of monetary claims rests on the
employer.[38]

We find nothing in the records to indicate that the petitioners had indeed paid ECOLA to Arlene and Joseph.

In the resolution issued on January 30, 2009, the NLRC found proof by way of the petitioners' annex to their
position paper that Arlene and Joseph already received their 13th month and service incentive leave pay for
the year 2005.[39] The respondents had not specifically refuted the NLRC's findings, hence, we sustain the
same.

Anent the respondents' claim for overtime pay, we find no ample basis to grant it as they had not offered
any proof to show that they in fact rendered such service.

The decision rendered by the

NLRC on November 29, 2007,
which the CA affirmed, did not
award in favor of Arlene and
Joseph moral and exemplary
damages. Consequently, we
delete the award in the
respondents' favor of ten percent
attorney's fees.

If there is no evidence to show that the dismissal of an employee had been carried out arbitrarily,
capriciously and maliciously and with personal ill-will, moral damages cannot be awarded.[40] If moral
damages cannot be awarded, the consequence is that there can also be no award of exemplary damages
and attorney's fees.[41]

In the case at bar, albeit we find Arlene and Joseph's dismissal from service as illegal, we cannot attribute
bad faith on the part of Blue Sky which merely acted with an intent to protect its interest. Hence, we find as
lacking in basis the NLRC's award of ten percent attorney's fees in the respondents' favor.

Jose and Linda cannot be held

solidarily liable for the dismissal
of Arlene and Joseph in the
absence of proof that they acted
with malice and bad faith.

As a general rule, a corporate officer cannot be held liable for acts done in his official capacity because a
corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and
members.[42] In illegal dismissal cases, corporate officers may only be held solidarily liable with the
corporation if the termination was done with malice or bad faith.[43] We find that the aforementioned
circumstance did not obtain in the case of Jose and Linda relative to Arlene and Joseph's dismissal from
service.

IN VIEW OF THE FOREGOING, the October 26, 2009 Decision and December 14, 2009 Resolution issued
by the Court of Appeals, finding that the dismissal from service of respondents Arlene and Joseph was illegal
and awarding in their favor full backwages, are AFFIRMED but with the following MODIFICATIONS:

(a) Blue Sky is directed to pay ECOLA and separation pay to the respondents;

(b) The award in favor of the respondents of ten percent attorney's fees made by the National Labor
Relations Commission in its November 29, 2007 Decision and which was affirmed by the Court of Appeals in
the herein assailed decision and resolution is deleted; and

(c) Pursuant to our ruling in Eastern Shipping Lines, Inc. v. CA,[44] an interest of 12% per annum is imposed
on the total sum of the monetary award to be computed from the date of finality of this Decision until full
satisfaction thereof.

The case is remanded to the National Labor Relations Commission which is hereby ORDERED to
COMPUTE the monetary benefits awarded in accordance with this Decision and to submit its compliance
thereon within thirty (30) days from notice hereof. cralaw

SO ORDERED.

[G.R. No. 148766. January 22, 2003]

JOSE V. SALVADOR, petitioner, vs. PHILIPPINE MINING SERVICE

CORPORATION, respondent.

DECISION
PUNO, J.:

Respondent PHILIPPINE MINING SERVICE CORPORATION was

established in 1980 by Japanese investors Kawatetsu Mining Co., Ltd. and
Kawasaki Steel Corporation to develop dolomite deposits in Cebu. Respondent
exports quality dolomite ore for use in the manufacture of steel, glass and
fertilizer.
Ore undergoes the following process: first, it is extracted and loaded to
respondents dump trucks. It then goes through a series of crushing process by
heavy equipment. Thereafter, three (3) products are produced: lumpy ore, fine
ore and 8 mesh. Each product is then deposited in three (3) separate
stockpiles for sale.
The lumpy ore stockpile and the fine ore stockpile are adjacent to each
other, separated only by a concrete dividing wall to prevent contamination or
spillage from one side to the other. Contamination usually results during
[1]

pushing or scraping of the product by a bulldozer in the ground level. In cases

[2]

of contamination or spillage, the foreman, after his shift, accomplishes a report

regarding the details thereof. Contaminated ore products are likewise
segregated and stored in a separate stockpile for sale by respondent or for use
in its civil works. Hence, contaminated ore is also categorized as a product
of the respondent.
Petitioner JOSE V. SALVADOR was first employed by respondent in
1981. He rose from the ranks and assumed the position of Plant Inspection
Foreman in 1991. He was tasked to: (1) supervise plant equipment and facility
inspection; (2) confirm actual defects; (3) establish inspection standards and
frequency; (4) analyze troubles and recommend counter measures; and (5)
prepare weekly/monthly inspection schedule. [3]

As early as March 1, 1985, respondent instituted the shift boss scheme

whereby the foreman from the Plant Section and the foreman from the Mining
Section rotate as shift boss throughout their night shift to oversee and supervise
both the mining and plant operations. The shift boss was entrusted with the
care, supervision and protection of the entire plant. [4]

Aside from his employment with respondent, petitioner co-owned and

managed LHO-TAB Enterprises, with his partner Ondo Alcantara. They were
engaged in the manufacture and sale of hollow blocks. [5]

On September 29, 1997, petitioners employment relation with respondent

was tainted with charges of pilferage and violation of company rules and
policy, resulting to loss of confidence.
Respondents evidence disclose that on September 29, 1997, at about 9:30
a.m., Koji Sawa, respondents Assistant Resident Manager for Administration,
was on his way back to his office in the plant. He and his driver, Roberto
Gresones, saw petitioner operating respondents payloader, scooping fine ore
from the stockpile and loading it on his private cargo truck. As the truck was
blocking the access road leading to the stockyards gate, Sawas car stopped
near the stockpile and the driver blew the horn thrice.Petitioner did not hear him
because of the noise emanating from his operation of the payloader. Sawas
driver found a chance to pass through when the payloader maneuvered to get
another scoop from the fine ore stockpile.
As it was contrary to respondents standard operating procedure for
the plant foreman to operate the payloader, Sawa went to the administration
office to check the delivery receipt covering the loading operation of petitioner
that morning. However, sales-in-charge Eduardo Guangco was in the wharf,
overseeing the loading of respondents product. Hence, it was only in the
afternoon that Sawa was able to verify the delivery receipt covering petitioners
loading transaction. The delivery receipt showed that it was dolomite spillage
that was purchased by buyer Ondo Alcantara, not the fine ore that he saw
petitioner loading on his truck. The receipt also showed it was not the
respondent but Alcantara, the buyer, who was responsible for loading the
spillage he purchased from the plant.
On the same day and on the basis of his initial findings, Sawa instructed
Antonio Plando, Assistant Department Manager for Administration, to
investigate the incident. The investigation established the following:
(1) petitioner owned the private cargo truck used by the buyer, Alcantara;
petitioner, during company time, loaded the fine ore on his truck using
respondents payloader;
(2) dolomite spillage was purchased and supposed to be picked up by
Alcantara that day and not fine ore, as shown in the delivery receipt, dated
September 18, 1997;
(3) it was noted on the delivery receipt that the purchase was care of
(petitioner) Salvador which facilitated the release of the products from the
compound;
(4) as the buyer, Alcantara, was supposed to pick up the dolomite spillage
his company purchased, he should have provided his own manpower to
manually haul the product on the private truck; petitioner should not have used
respondents payloader; and
(5) the hauling witnessed by Sawa and his driver on said date was
Alcantaras sixth (6th) withdrawal as he has already withdrawn six (6) tons of
respondents product on previous occasions.
In a show-cause letter, dated September 30, 1997, respondent formally
[6]

charged petitioner with the following: (1) doing personal or unofficial work on
company time using respondents equipment and materials; (2) defrauding the
respondent by loading fine ore, instead of dolomite spillage; and (3) breach of
trust and confidence reposed on him by respondent.
In reply, petitioner explained that, on said date and time, while he was
[7]

clearing the contaminated area near the divider of the two (2) stockpiles, his
private cargo truck arrived as it was supposed to withdraw two (2) tons of
dolomite spillage ordered by Alcantara. Petitioner claimed that to save time, he
deemed it best to dump the contaminated fine ore, classified as spillage, on his
private truck, instead of using the payloader in going back and forth to the
stockpile and spillage area. When he noticed Sawa in the vicinity of the
stockpiles, petitioner alleged that he stopped what he was doing as he
was sure that Sawa would misunderstand the situation. Petitioner also
expressed his apologies to respondent about the incident. He further explained
that his action in personally cleaning up the contamination was pursuant to the
instruction he received from his department head, Engineer Tan, to monitor and
clean any contamination in the area.
A formal investigation regarding the incident was conducted by respondent
on October 14, 1997. Petitioner appeared with the labor union president and
representative and an FFW representative. Nothing came out of it as petitioner
and his companions questioned the propriety of going through the investigation
without first submitting the issue to the grievance procedure. The investigation
was reset to October 16, 1997. [8]

In the next scheduled investigation, petitioner and his companions reiterated

their objection to its continuance. With petitioners adamant refusal to proceed
with the formal investigation, respondent was left with no choice but to consider
him to have waived his right to be afforded due process. The parties agreed
that respondent could proceed to evaluate the documents on hand and base its
decision thereon. [9]

Accordingly, on November 7, 1997, respondent found petitioner guilty of

fraud, serious misconduct, breach of trust and confidence, violation of
the companys rules and regulations and violation of his contractual
obligations with respondent company. Petitioners services were
terminated.[10]

Petitioner filed a complaint for illegal dismissal with the Labor Arbiter.
According to petitioner, on September 29, 1997, he reported for work at the
plant at 7:00 a.m. and was on duty as shift boss until 12:00 midnight. At about
9:00 to 9:30 a.m., he went to the stockyard for inspection. While checking the
stockpiles, he saw that some lumpy ore mixed with and spilt over the fine ore
near the divider of the two stockpiles. Further examination revealed that there
was a cluster of lumpy ore buried at the base of the fine ore stockpile. Petitioner
immediately took action to clean the contamination. He left the stockyard and
went to the plant across the highway to secure his dust foe. When he returned
to the stockyard, he saw that his private cargo truck has arrived. His truck
was hired by his business partner, Ondo Alcantara, to haul dolomite spillage
which their business purchased from respondent.Petitioner claimed that, in
order to save time, he personally operated respondents payloader, scooped
the contaminated fine ore in the stockpile and loaded it on his private cargo
truck. It was while he was hauling the contaminated fine ore that Sawa saw
him.
After evaluating the pleadings and position of the parties, the Labor Arbiter
found for the petitioner. However, considering the antagonistic relations
between the parties, reinstatement of the petitioner was not ordered. Instead,
the labor arbiter awarded petitioner separation pay of one half month for every
year of service. No backwages were awarded as the labor arbiter noted that
petitioner committed indiscretions amounting to gross neglect of duty
which rendered him undeserving of the benefit. The dispositive portion of
said Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring the

complainants dismissal illegal and directing the Philippine Mining Service
Corporation to pay complainant the sum of One Hundred Four Thousand Five
Hundred Eighty (P104,580.00) Pesos in concept of separation pay and Ten Thousand
Four Hundred Fifty-Eight (P10,458.00) Pesos as attorneys fees.

xxxxxxxxx

SO ORDERED. [11]

Both parties appealed to the National Labor Relations Commission

(NLRC). Petitioner claimed for payment of a higher amount of separation pay
(equivalent to one month pay for every year of service), backwages and moral
and exemplary damages. Respondent, on the other hand, insisted that
[12]

petitioners dismissal was for just causes as he was guilty of all the charges
when he loaded on his truck fine ore from the stockpile. Respondent claimed
that petitioners excuse that what he loaded was contaminated fine ore was an
afterthought.[13]

In its Decision, dated October 29, 1999, the NLRC upheld the illegal
[14]

dismissal findings of the labor arbiter and partially granted petitioners appeal,
thus:
WHEREFORE, premises considered the appeal filed by the complainant is
PARTIALLY GRANTED and the appeal filed by the respondent PMSC is
DISMISSED. The decision of the Executive Labor Arbiter Reynoso A. Belarmino
dated 30 September 1998 is MODIFIED, to wit:

Ordering respondent Philippine Mining Service Corporation (PMSC) to reinstate the

complainant without loss of seniority rights and to his full backwages and allowances
computed from 7 November 1997 up to the time of his actual reinstatement. Should
reinstatement is (sic) no longer feasible for whatever reason, the respondent may opt
to pay complainant separation pay in lieu of reinstatement equivalent to one (1) month
pay for every year of service. The respondent is likewise ordered to pay complainant
attorneys fees equivalent to ten (10%) percent of the total award.

The backwages due complainant as of October 31, 1999 is in the total amount
of P345,767.57 as computed per Annex A hereof.

SO ORDERED.

Assailing the NLRC decision, respondent appealed to the Court of

[15]

Appeals.
On March 13, 2001, the Court of Appeals reversed and set aside the NLRC
decision. It ruled that there was valid and just cause for petitioners dismissal as
it was proved that he was guilty of pilferage, serious misconduct and
dishonesty. [16]

Petitioner thus sought recourse to this Court and raised the following issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
RESPONDENT HAD PROVED BY PREPONDERANCE OF EVIDENCE THAT
PETITIONERS DISMISSAL WAS LEGAL AND FOR JUST CAUSE, WHICH
COLLIDES WITH THE FINDINGS OF BOTH THE LABOR ARBITER AND THE NLRC
BASED ON SUBSTANTIAL EVIDENCE THAT PETITIONERS DISMISSAL WAS
ILLEGAL. MOREOVER, THE APPELLATE COURT OVERLOOKED THE
PRINCIPLE THAT PREPONDERANCE OF EVIDENCE AS A QUANTUM OF
PROOF DOES NOT APPLY TO LABOR CASES BUT ONLY TO CIVIL CASES.
II
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
EVEN IF CONTAMINATED ORE WAS LOADED ON THE CARGO TRUCK AND NOT
THE FINE ORE, STILL PETITIONER WAS GUILTY OF PILFERAGE SINCE THE
SALE WAS FOR DOLOMITE SPILLAGE, AND IN NOT GIVING CREDENCE TO
PETITIONERS CLAIM THAT CONTAMINATED ORE IS CLASSIFIED AS
SPILLAGE.
III
 THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
RESPONDENTS ALLEGATION THAT PETITIONER LOADED FINE ORE ON
SEPTEMBER 29, 1997 WAS SUPPORTED BY OTHER CONVINCING EVIDENCE.
IV
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
PERSONAL INTEREST HAD LED PETITIONER TO HAUL THE CONTAMINATED
ORE HIMSELF WHICH WAS AGAINST COMPANY PROCEDURE.
V
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
IT WAS NOT NECESSARY THAT THE MANAGEMENT SHOULD BE ABLE TO
ACCOST PETITIONER RED-HANDED IN THE ACT OF PILFERAGE BECAUSE
PETITIONER ADMITTED THAT HE WAS LOADING CONTAMINATED ORE ON
THE CARGO TRUCK WHEN WHAT WAS BOUGHT WAS DOLOMITE SPILLAGE
AND THAT NUMEROUS EVIDENCE WAS PRESENTED TO SHOW THAT
PETITIONER WAS LOADING FINE ORE AND NOT CONTAMINATED ORE AS HE
CLAIMED.

We find no merit in the petition.

The main issue before this Court is whether or not the charge of pilferage
against petitioner was supported by substantial evidence to warrant his
dismissal from the service.
We rule in the affirmative.
Preliminarily, the Labor Code provides that an employer may terminate the
services of an employee for just cause and this must be supported
by substantial evidence. The settled rule in administrative and quasi-judicial
[17]

proceedings is that proof beyond reasonable doubt is not required in

determining the legality of an employers dismissal of an employee, and not
even a preponderance of evidence is necessary as substantial evidence
is considered sufficient. Substantial evidence is more than a mere scintilla
[18]

of evidence or relevant evidence as a reasonable mind might accept as

adequate to support a conclusion, even if other minds, equally reasonable,
might conceivably opine otherwise. Thus, substantial evidence is the least
[19]

demanding in the hierarchy of evidence.

In the case at bar, our evaluation of the evidence of both parties indubitably
shows that petitioners dismissal for loss of trust and confidence was duly
supported by substantial evidence.
As the first, third, fourth and fifth issues raise interrelated arguments, we
shall discuss them jointly. Petitioner insists that the charge against him of
stealing ore was not conclusively proved by respondent to warrant his
dismissal from service. He maintains that: (1) Sawa should have alighted from
his car when he saw petitioner allegedly loading fine ore on his truck and verify
if the material being loaded was really contaminated fine ore as maintained by
petitioner; and (2) Sawa should have instructed the guard to stop the truck from
leaving respondents premises pending verification of the delivery receipt
covering the hauling he witnessed as he was then already suspicious that there
was a violation of company rules and procedure. Petitioner argues that these
actions would have established beyond doubt the charge against him. He
further maintains that Sawa relied only on circumstantial evidence in concluding
that what was loaded on the truck and released by the guards was fine ore and
not spillage.
We find no merit in petitioners contentions.
First. At the time Sawa saw petitioner hauling fine ore from the stockpile,
Sawa had no idea yet that pilferage was being committed by petitioner. He
merely checked the covering delivery receipt of said transaction as he was
curious why it was petitioner, not the heavy equipment operator, who was
operating the payloader. Unfortunately, the person-in-charge of the delivery
receipts was out of the office that morning and it was already in the afternoon
that Sawa discovered that the product supposed to be picked up that morning
was dolomite spillage, not fine ore.
Second. Several instances belie petitioners claim that there was
contamination of fine ore on September 29, 1997 that necessitated his hauling
of the contaminants from the fine ore stockpile. Petitioner as shift foreman
made no report of contamination of fine ore on said date. Specifically, at
11:00 a.m. that day, he reported: ROUTINE INSPECTION OF PLANT
OPERATION, OK. Neither can we give credence to his claim that a report of
contamination is accomplished only where the contamination is voluminous. An
examination of the records reveals that during his plant inspection on
September 17 and October 3, 1997, he indicated in his reports the presence of
some contaminants in the stockpile, although clearly the amount of
contamination was negligible. Moreover, petitioners superior, Engr. Tan,
reported that no stripping or clearing works were done in the vicinity of the
fine ore and lumpy ore stockpiles in the morning of September 29, 1997
which could have caused the alleged contamination in the stockpile as
maintained by petitioner. Finally, the pictures submitted by respondent show
that the track marks of the payloader on that day were found only at the
fine ore stockpile, not near the divider of the fine ore and lumpy stockpiles
where petitioner alleged the contamination occurred. [20]

Upon the other hand, a number of disturbing circumstances disproved

petitioners version of the incident and substantially proved his act of pilferage.
 First. The security guards logbook shows that petitioner entered
respondents stockyard at 9:37 a.m., just a minute after his private truck
arrived in the stockyard to pick up the dolomite spillage ordered by his
business partner, Ondo Alcantara.The same record shows that petitioner
left the stockyard at 9:45 a.m. and his truck exited the compound a minute
later at 9:46 a.m. Petitioners presence in the stockyard during those crucial
eight (8) minutes when his private truck arrived to pick up his partners order of
dolomite spillage arouses curiosity.
Second. Respondent lucidly illustrated that petitioner could not have
performed the specific acts he claimed to have done during the span of eight
(8) minutes that he was in the stockyard, thus:

(a) petitioner inspected the 10,000 square meter stockyard, checking the three [3]
separate stockpiles of fine ore, lumpy ore and 8 mesh;

(b) after discovering the alleged contamination, he walked the 40-foot high, 300-
meter long conveyor walkway connecting the stockyard to the main plant located
across the national highway;

(c) in the plant, he walked a distance of 50 meters to reach his office at the 2nd floor,
opened his locker and got his dust foe;

(d) he then went down to the parking lot and drove respondents van to the plants gate
(about 300 meters away) to allow the security guard to spot-check the van;

(e) the guard at the plant then crossed the national highway to open the opposite gate
of the stockyard to enable petitioner to enter; petitioner then parked the van near the
stockpile of fine ore.

We reiterate that proof beyond reasonable doubt of the employees

misconduct or dishonesty is not required to justify loss of confidence. It is
sufficient that there is substantial basis for the loss of trust. In the case at bar,
[21]

respondent has proved by substantial evidence the charge of pilferage against

petitioner.
On the second issue, petitioner claims that the Court of Appeals failed to
give weight to his position that contaminated fine ore is classified as spillage
and as the product purchased by Alcantara that day was dolomite spillage,
petitioner could not be held guilty of pilferage when he loaded the contaminated
fine ore on his private truck.
 We disagree. Respondent clarified that dolomite spillage is different from
pure or contaminated fine ore, the latter being one of its regular products. The
collection and sale of the ore is exclusively handled by respondents General
Affairs Office, not the Plant Section to which petitioner belonged. Dolomite
spillage, on the other hand, is not a regular product of respondent. These are
the dolomite materials that spill out of the conveyor lines due to
overflowing. The spillage occurs prior to the pouring and storage of the ore
products in their separate stockpiles. Thus, clearly, petitioner was guilty of
pilferage whether or not it was fine ore or contaminated fine ore that he hauled
that day.
Finally, petitioner argues that assuming there was evidence to support the
charges against him, his dismissal from service is unwarranted, harsh and
grossly disproportionate to his act, considering his long years of service with
the company.
To be sure, length of service is taken into consideration in imposing the
penalty to be meted an erring employee. However, the case at bar involves
dishonesty and pilferage by petitioner which resulted in respondents loss of
confidence in him. Unlike other just causes for dismissal, trust in an employee,
once lost is difficult, if not impossible, to regain. Moreover, petitioner was not an
ordinary rank-and-file employee. He occupied a high position of responsibility.
As foreman and shift boss, he had over-all control of the care, supervision and
operations of respondents entire plant. It cannot be over-emphasized that there
is no substitute for honesty for sensitive positions which call for utmost
trust. Fairness dictates that respondent should not be allowed to continue with
the employment of petitioner who has breached the confidence reposed on
him. As a general rule, employers are allowed wider latitude of discretion in
[22]

terminating the employment of managerial employees as they perform

functions which require the employers full trust and confidence. [23]

In the case at bar, respondent has every right to dismiss petitioner, a

managerial employee, for breach of trust and loss of confidence as a measure
of self-preservation against acts patently inimical to its interests. Indeed, in
cases of this nature, the fact that petitioner has been employed with the
respondent for a long time, if to be considered at all, should be taken against
him, as his act of pilferage reflects a regrettable lack of loyalty which he should
[24]

have strengthened, instead of betrayed.

IN VIEW WHEREOF, the petition is DENIED. The Decision of the Court of
Appeals, dated March 13, 2001, in C.A. G.R. No. 59559 is affirmed.
SO ORDERED.
 [G.R. No. 99047. April 16, 2001]

OMAR O. SEVILLANA, petitioner, vs. I.T. (INTERNATIONAL)

CORP./SAMIR MADDAH & TRAVELLERS INSURANCE AND
SURETY CORPORATION, DEPARTMENT OF LABOR AND
EMPLOYMENT and NATIONAL LABOR RELATIONS
COMMISSION (Second Division), respondents.

DECISION
DE LEON, JR., J.:

This old petition, denominated as a petition for review on certiorari under Rule 45
of the Revised Rules of court, shall be treated as a special civil action for certiorari
under Rule 65 for reasons which are hereinafter stated. The petition seeks to reverse the
Resolution[1] dated March 26, 1991 of public respondent National Labor relations
Commission (NLRC), Second Division, which set aside the Decision[2] dated December
29, 1989 of the Philippine Overseas Employment Administration Adjudication Office
in POEA Case No. (L) 88-12-1048.
The facts are as follows:
Sometime in November 1987, petitioner Omar Sevillana was contracted to work as
a driver by private respondent I.T. (International) Corporation (I.T., for brevity) for its
foreign accredited principal, Samir Maddah (Samir, for brevity), in Jeddah, Saudi
Arabia. The agreed monthly salary was US $370.00 for a period of two (2)
years. Petitioner alleged, however, that when he received his salaries from his
employer, he was only paid US $100.00 a month for twelve (12) months, instead of the
agreed US $370.00 per month.
On November 2, 1988, after working twelve (12) months with his employer,
petitioner said that he was repatriated without any valid and justifiable
reason. Petitioner shouldered the cost of his return airfare in the amount of US $630.00.
Thereafter, petitioner filed a complaint with the Philippine Overseas Employment
Administration (POEA, for brevity) for underpayment of salaries, illegal dismissal,
reimbursement of return airfare, moral damages and attorney's fees
against I.T. (International) Corporation, Samir Maddah and Travellers Insurance and
Surety Corporation (Travellers, for brevity).
In answer thereto, private respondent I.T. denied the material allegations of the
petitioner but admitted that the petitioner was one of several workers it deployed and
employed abroad. I.T. argued that the petitioner continuously worked with Samir for
more than one (1) year until his blood pressure was considered critical.
Thus, Samir was forced to closely monitor the health condition of the petitioner. When
petitioner's blood pressure did not stabilize and begun affecting his work as driver due
to frequent headaches and dizziness, I.T. alleged that Samir decided to repatriate the
petitioner to avoid further injury and complication to his health. I.T. claimed that after
the petitioner had received all the benefits accorded to an employee consisting of full
salaries and separation pay, the petitioner refused to be repatriated and instead decided
to run away. Since then, the whereabouts of the petitioner were unknown and I.T. only
heard about the petitioner when the latter reported to their office in the Philippines and
later on filed the subject complaint before the POEA Adjudication Office.
After both parties have submitted their respective position papers and their evidence
thereto, the POEA Adjudication Office, through Tomas Achacoso, rendered a decision
on December 29, 1989 holding the private respondents herein jointly and severally
liable to the petitioner. The dispositive portion of the POEA decision reads -

"WHEREFORE, premises considered, judgment is hereby rendered ordering the

respondents (International) Corporation, Madir and Travellers Insurance & Surety
Corporation jointly and severally liable to the complainants the following amounts or
their peso equivalents at the time of payment:

1. THREE THOUSAND TWO HUNDRED FORTY US DOLLARS (US $3,240.00) representing

complainant's salary differential for his twelve months employment;
2. FOUR THOUSAND FOUR HUNDRED FORTY US DOLLARS (US $4,440.00) representing
complainant's salaries for the unexpired portion of his employment contract;
3. TWO THOUSAND THREE HUNDRED SIXTY NINE SAUDI RIYAL (S.R. 2,369.00)
representing the cost of complainant's return airfare;
4. 5% of the aforesaid amounts as attorney's fees.

All other claims of the complainant are dismissed.

SO ORDERED."[3]

Only private respondent I.T. appealed the aforesaid decision of the POEA
Adjudication Office to the NLRC Second Division which in turn reversed and set aside
the findings and ruling of the former in its Resolution dated March 26, 1991. The NLRC
held that -
 "x x x x x x x x x

The conclusions that could be inferred on the PAL Ticket is that complainant at that
particular time travelled from Saudi Arabia to the Philippines - as to who paid the fare
is subject of conflicting allegations; and the Travel Exit Pass, the same being a
document of POEA; are proof of the contents thereof - the relevant fact in so far as
this case is concerned, is the agreed salary of complainant, $370.00 - not as to whether
or not the complainant was underpaid. Thus, the primary evidence from which the
Administrator drew his conclusions in the assailed decision is the affidavit of
complainant where the affiant was not subjected to cross examination to determine
whether or not he is telling the truth and the application (mis-application) of the
general principles of law.

Consequently, we find it disconcerning to stamp Our imprimatur of approval in the

assailed decision considering (the) quantum of evidence presented vis-a-vis (the)
amount involved in the award.

Firstly, I.T. (Int'l) Corp. is a recruitment agency. It is not in the level of the employer
itself. At the (sic) most it is an agent of the employer. The application, therefore, of
the so called common knowledge that in employer to employee relationship, the
former is the one who keep records of payments,' and 'in a better position to present
the same' in the present case is akin to stretching the said principle to ridiculous
proportions. Both appellant and complainant-appellee stand an (sic) equal footing. No
presumptions arises. They both do not have the employment records of the
complainant. More serious inquiry should have been resorted to such as the
instrument of cross examinating the witnesses presented by the parties, or even the use
of clarificatory questions by the Office a quo to the witnesses would have shed light
as to who among the parties is telling the truth. But records show that there is none.

Secondly, the POEA Administrator heavily relied upon the principle of law that in
illegal termination cases, the burden of proof lies on the employer, and the employer
not having presented sufficient evidence to justify the dismissal ergo the dismissal is
illegal. The POEA Administrator misread the law. It is only when the employer
admits the dismissal, which is not so in this case, that the burden to present proof that
the dismissal is for cause hangs on the shoulders of the employer.

Thirdly, considering that the payment of the PAL ticket is at issue and there being no
other evidence presented, except their respective bare self-serving and conflicting
allegations We find no sufficient evidence to support a conclusion that one party paid
for the ticket.
Basic in this jurisdiction is that he who asserts a right must prove it. In labor disputes,
the evidence mandated by law are these relevant evidence which a reasonable and
unbiased mind would accept to support a conclusion. Failing to do this, We find no
basis to the award.

WHEREFORE, premises considered, the assailed decision is set aside and a new one
entered dismissing this one.

SO ORDERED."[4]

Dissatisfied, petitioner now come to us and assigns the following as errors

committed by the NLRC, to wit:
I

THE PUBLIC RESPONDENT ERRED IN HOLDING THAT THE AFFIDAVIT

OF COMPLAINT CANNOT BE THE BASIS OF TRUTH BECAUSE THE
AFFIANT WAS NOT CROSS-EXAMINED.
II

THE PUBLIC RESPONDENT ERRED IN HOLDING THAT THE

COMPLAINANT-PETITIONER WAS NOT ILLEGALLY DISMISSED.
III

THE PUBLIC RESPONDENT ERRED IN HOLDING THAT NEITHER

PARTY, THE COMPLAINANT AND RESPONDENT, COULD BE
AWARDED REIMBURSEMENT FOR THE PAL TICKET.

The Solicitor General, in his Comment[5] to the petition, joined the petitioner[6] in
arguing that although there was a failure to allege grave abuse of discretion against the
NLRC, this element of grave abuse of discretion is present in the instant petition. The
assailed resolution was issued in gross violation of the settled principle that affidavits
suffice as evidence in proceedings before quasi-judicial bodies like the POEA.[7]We find
merit in the petition.
At the outset, we note that the instant petition was filed with this Court on May 22,
1991 before the ruling of this Court in the case of the St. Martin Funeral Home vs.
NLRC[8] on September 16, 1998 which required that judicial review of labor cases
should be filed in the Court of Appeals before the same can be elevated to this Court
following the doctrine on hierarchy of courts. The prevailing jurisprudence then holds
that judicial review of labor cases by the Supreme Court may only be through a petition
for certiorari under Rule 65 of the Rules of Court.[9]Moreover, in the interest of justice,
this Court had treated, in a number of cases, as special civil actions for certiorari
petitions erroneously captioned as petitions for review on certiorari.[10] It is in this light
that we so treat the present petition. Rules of procedure and evidence should not be
applied in a very rigid and technical sense in labor cases in order that technicalities
would not stand in the way of equitably and completely resolving the rights and
obligations of the parties.[11]
Furthermore, while we consider this petition as one for certiorari under Rule 65 of
the Rules of Court, it is likewise significant to note that petitioner failed to seasonably
file a motion for reconsideration at the NLRC level before recourse to this Court was
made. As a general rule, this petition should have been dismissed outright for failure to
comply with a condition precedent in order that this petition for certiorari shall lie. The
filing of a motion for reconsideration before resort to certiorari will lie is intended to
afford the public respondent an opportunity to correct any actual or fancied error
attributed to it by way of re-examination of the legal and factual aspects of the
case.[12] However, this rule is subject to certain recognized exceptions. [13] Upon careful
consideration of the case at bar, we find that this case falls under one of those recognized
exceptions, namely, that the assailed order is a patent nullity, as will be shown later.
Anent the first issue, petitioner contends that public respondent NLRC acted with
grave abuse of discretion when it considered petitioner's complaint-affidavit as mere
hearsay evidence since the petitioner was not cross-examined. Petitioner argues that
private respondent I.T. waived its right to cross-examine him when both parties agreed
to submit their case for decision before the POEA Adjudication Officer on the basis of
each parties' respective position papers, affidavits and other evidence extant on the
record below.
Petitioner's argument is well-taken. It must be stressed that labor laws mandate the
speedy disposition of cases, with the least attention to technicalities but without
sacrificing the fundamental requisites of due process. In this light, the NLRC, like the
labor arbiter, (in the case at bar, the POEA Adjudication Officer) is authorized to decide
cases based on the position papers and other documents submitted, without resorting to
technical rules of evidence.[14]
We quote, with approval, the following observations of the Solicitor General:

We are constrained to disagree with the ruling of the NLRC.

In the recently decided case of Rabago et. al. vs. NLRC and Philippine Tuberculosis
Society, Inc., G.R. No. 82868, August 5, 1991, pp. 8-9, this Honorable Court held:

'We have said often enough that the findings of fact of quasi-judicial agencies which
have acquired expertise on the specific matters entrusted to their jurisdiction are
accorded by this Court not only respect but finality if they are supported by substantial
evidence (Omar K. Al-Esayi and Company, Ltd. Vs. Flores, 183 SCRA 458; Chua vs.
NLRC, 182 SCRA 353; Pagkakaisa ng mga Manggagawa vs. Ferrer-Calleja, 181
SCRA 119).'

x x x The argument that the affidavit is hearsay because the affiants were not
presented for cross-examination is not persuasive because the rules of evidence are
not strictly observed in proceedings before administrative bodies like the NLRC,
where decisions may be reached on the basis of position papers only. It is also worth
noting that ABC has not presented any evidence of its own to disprove the
complainant's claim. As the Solicitor General correctly points out, it would have been
so easy to submit the complainants employment records which were in the custody of
ABC, to show that they had served (for) less than one year. (underscoring for
emphasis)

Thus, it is clear that petitioner's affidavit of complaint may be made the basis of truth
even if affiant was not cross-examined."[15]

The fact alone that most of the documents submitted in evidence by an employee
were prepared by him does not make them self-serving since they have been offered in
the proceedings before the Labor Arbiter (in this case before the POEA Adjudication
Officer) and that ample opportunity was given to the employer to rebut their veracity
and authenticity[16]. The seriousness of the allegations in the complaint-affidavit in the
case at bar cannot just be perfunctorily rejected absent any showing that the petitioner-
affiant was lying when he made the statements contained therein. There being none, it
was grave abuse of discretion on the part of the NLRC to ignore or simply sweep under
the rug the petitioner's complaint-affidavit and conclude that it is a mere hearsay
evidence without finding that there was adequate reason not to believe the allegations
contained therein. Accordingly, the NLRC ruling that the complaint-affidavit is hearsay
because the affiant was not cross-examined has no legal basis because the rules of
evidence are not supposed to be strictly observed in proceedings before the NLRC and
the POEA Adjudication Office. The NLRC failed to observe this well-entrenched
doctrine when this case was brought on appeal before it.
Neither can we warrant the ruling of the NLRC that herein private
respondent I.T. may only be considered as an agent of Samir, its foreign principal, and
that private respondent I.T. should not be expected to have access to the employment
records of its said foreign principal, thereby justifying the latter's non-presentation of
the needed documents before the POEA Adjudication Office, and the absolution
of I.T. from any liability to petitioner.[17] In so ruling, respondent NLRC disregarded the
rule regarding the solidary liability of the local employment agency with its foreign
principal in overseas employment contracts. Private employment agencies are held
jointly and severally liable with the foreign-based employer for any violation of the
recruitment agreement or contract of employment.[18] This joint and solidary liability
imposed by law against recruitment agencies and foreign employers is meant to assure
the aggrieved worker of immediate and sufficient payment of what is due him.[19] This is
in line with the policy of the State to protect and alleviate the plight of the working
class. The fact, however, that private respondent I.T. failed to fully air its position was
mainly due to its own inaction and negligence when it chose not to present
countervailing evidence on the records of salary payments and separation pay it
claimed Samir has paid to petitioner. Petitioner, on the other hand, cannot be expected
to have the proper facility to produce the same before the POEA Adjudication Officer
considering that their relations became sour due to the present charges.
The NLRC's doubts in the factual findings of the POEA Adjudication Officer
should not have prompted it to reject outright the contention of the petitioner contained
in his complaint-affidavits, position paper and evidence submitted to the POEA
Adjudication Office. The NLRC is not precluded by the rules to allow both
parties to submit additional evidence to prove their respective claims even on
appeal[20] or to order the remand of the case to the administrative agency concerned for
further study and investigation upon such issues. Since NLRC relied on the available
evidence obtaining in the records of this case, it should have followed the well-settled
doctrine that if doubts exist between the evidence presented by the employer (as
represented by the local employment agency in this case) and the employee, the doubts
must be resolved in favor of the employee.[21]
As regards the issue of petitioner's dismissal from employment, petitioner claims
that he was illegally dismissed; that respondent I.T. failed to substantiate its claim that
petitioner was repatriated because he (petitioner) was found to have hypertension; and
that respondent I.T. has the burden of proving that petitioner was legally dismissed.
We rule for the petitioner.
When the NLRC declared that the burden of proof in dismissal cases shifts to the
employer only when the latter admits such dismissal, the NLRC ruled erroneously in
disregard of the law and prevailing jurisprudence on the matter. As correctly articulated
by the Solicitor General in his Comment to this petition, thus -

"Article 277(b) of the Labor Code puts the burden of proving that the dismissal
of an employee was for a valid or authorized cause on the employer. It should be
noted that the said provision of law does not distinguish whether the employer
admits or does not admit the dismissal.

It is a well-known maxim in statutory construction that where the law does not
distinguish, the court should not distinguish (Robles vs. Zambales Chromite Mining
Co., 104 Phil. 688).
Moreover, Article 4 of the Labor Code provides:

Art. 4. Construction in favor of labor. All doubts in the implementation and

interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.'

In Eastern Shipping Lines, Inc. vs. POEA, 166 SCRA 533, this Honorable Court held:

'When the conflicting interest of labor and capital are weighed on the scales of social
justice, the heavier influence of the latter must be counterbalanced by the sympathy
and compassion the law must accord the underprivileged worker. This is only fair if
he is to be given the opportunity- and the right- to assert and defend his cause not as a
subordinate but as a peer of management, with which he can negotiate on even
plane. Labor is not a mere employee of capital but its active and equal partner.

Thus, it is clear that petitioner was illegally dismissed by private respondent Samir
Maddah.[22]

Time and again we have ruled that where there is no showing of a clear, valid and
legal cause for termination of employment, the law considers the case a matter of illegal
dismissal. The burden is on the employer to prove that the termination of employment
was for a valid and legal cause. For an employee's dismissal to be valid, (a) the dismissal
must be for a valid cause and (b) the employee must be afforded due process.[23]
A review of the record shows that neither of the two (2) conditions precedent were
shown to have been complied with by the private respondents. All that private
respondent I.T. did was to rely on its claim that petitioner was repatriated by its foreign
principal, respondent Samir Maddah, due to hypertension with nary an evidence to
support it. In all termination cases, strict compliance by the employer with the demands
of both procedural and substantive due process is a condition sine qua non for the same
to be declared valid.[24] Under Section 8, Rule I, Book VI of the Rules and Regulations
implementing the Labor Code, for a disease to be a valid ground for the dismissal of
the employee, the continued employment of such employee is prohibited by law or
prejudicial to his health or the health of his co-employees, there must be a certification
by a competent public health authority that the disease is of such nature or at such a
stage that it cannot be cured within a period of six (6) months, even with proper medical
treatment. This rule was correctly applied by the POEA Adjudication Office in its
Decision dated December 29, 1989, to wit:

"In so far as the issue of illegal dismissal is concerned, this Office also finds it in the
affirmative.
This Office in arriving at the aforesaid conclusion, takes into consideration the
express provision of the Labor Code [Art. 277, par. (b)] that expressly provides that
the burden of proving that the termination was for a valid or authorized cause shall
rest on the employer (respondents in the instant case).

The defense of complainant's medical problems (alleged hypertension of complainant)

interposed by respondents to justify the dismissal of the former is totally bereft of
merit. The said defense of respondents is not only uncorroborated by documentary
evidence but is also not a just or valid cause for termination of one's
employment. While an employer (respondents in this case) may validly terminate the
services of an employee who has been found to be suffering from any disease, it is
authorized only if his continued employment is prohibited by law or is prejudicial to
his health as well as to the health of his co-employees (Art. 284, Labor Code). This is
not present in the instant case, for there is no finding from a medical practitioner
certifying that complainant is really hypertensive."[25]

Since the burden of proving the validity of the dismissal of the employee rests on
the employer, the latter should likewise bear the burden of showing that the requisites
for a valid dismissal due to a disease have been complied with. In the absence of the
required certification by a competent public health authority, this Court has ruled
against the validity of the employees dismissal.[26] It is therefore incumbent upon the
private respondents to prove by the quantum of evidence required by law that petitioner
was not dismissed, or if dismissed, that the dismissal was not illegal; otherwise, the
dismissal would be unjustified.[27] This Court will not sanction a dismissal premised on
mere conjectures and suspicions, the evidence must be substantial and not arbitrary and
must be founded on clearly established facts sufficient to warrant his separation from
work.[28] We find no cogent reason to depart from the conclusion reached by the POEA
Adjudication Office in the case at bar.
We also find merit in the petitioner's claim of refund for his repatriation plane
ticket. The record shows that private respondent I.T. failed to controvert this claim of
petitioner during the arbitration level at the POEA Adjudication Office. If at all,
this belated claim of private respondent I.T., in the absence of proof therefor, and
contrary to its Memorandum dated October 16, 1992 that respondent Samir had paid
for the repatriation plane ticket of the petitioner, is merely an afterthought that
deserves scant consideration from this Court. The POEA thus held that -

"Noteworthy in the instant case is respondent's failure to deny complainant's

allegation that he was the one who shouldered the cost of his return airfare in the
amount of SR2,369.00. Having failed to deny the same, herein respondents are
deemed to have admitted the same. Considering that the complainant in this case was
illegally dismissed as mentioned earlier, the herein respondents are therefore liable to
the repatriation expenses (return airfare in this case) of the herein complainant in the
amount of SR 2,369.00 (per Annex A).[29]

The solidary nature of the relationship of respondent I.T., as the local employment
agency, and respondent Samir, its foreign principal, vis-a-vis the petitioner does not
exempt respondent I.T. from presenting proof of its alleged payment of the repatriation
plane ticket. In the absence of proof to the contrary, the evidence of petitioner in that
regard, as pointed out by the Solicitor General, merits the favorable consideration of
this Court, to wit:

"It should be noted, however, that the only piece of evidence on the issue of payment
of return airfare presented by petitioner is a "CERTIFICATION" signed by a certain
Allan L. Timbayan, Labor Attache' in Jeddah. Said Certification reads:

'This is to certify that Overseas Contract Worker OMAR SEVILLANA, holder of

passport No. DC 0605633, issued on 20 Nov. 1986 at Davao City, sought the
assistance of this Office in connection with his employment problem. He stayed as
stranded OCW at the Extension Office of the Labor Attache', Consulate General of
the Philippines.

'Subject stranded OCW purchased his own ticket No. 07942041113955 from
Jeddah to Manila via Karachi. The subject OCW was repatriated on 2
November 1988.

'This certification is issued upon the request of the stranded (sic) OCW for whatever
legal purpose it may serve.' (Annex "C", Petition.Underscoring for emphasis).

Against this Certification, private respondents failed to adduce any proof that the
return ticket was purchased by the employer. Considering that petitioner was illegally
dismissed as earlier discussed, private respondents are, therefore, liable for the
repatriation expenses of petitioner.[30]

The Court in Pacific Maritime Services, Inc. vs. Ranay[31] reiterated the doctrine
regarding a claim of payment in labor cases, viz:

"As a general rule, one who pleads payment has the burden of proving it. Even where
the plaintiff must allege non-payment, the general rule is that the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove non-payment. The
debtor has the burden of showing with legal certainty that the obligation has been
discharged by payment."
 In view of all the foregoing, we hold that the assailed resolution of public
respondent NLRC is a patent nullity; and that the same was issued in grave abuse of
discretion. The said resolution of public respondent NLRC, being a patent nullity,
immediate resort to this Court was justified even without a prior motion for
reconsideration therefor.
WHEREFORE, the assailed Resolution dated March 26, 1991 of public
respondent National Labor Relations Commission (Second Division) is hereby
REVERSED and SET ASIDE; and the Decision dated December 29, 1989 of the POEA
Adjudication Office is hereby REINSTATED.
SO ORDERED.

[G.R. No. 154078. May 6, 2005]

EDGARDO D. MILLARES, petitioner, vs. PHILIPPINE LONG DISTANCE

TELEPHONE CO., INC. AND AMBROSIO HUGO, respondents.

DECISION
SANDOVAL-GUTIERREZ, J.:

For resolution is a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, assailing the Decision dated April 16,
[1]

2002 and the Resolution dated June 26, 2002 rendered by the Court of
[2]

Appeals in CA-G.R. SP No. 66611, entitled Edgardo D. Millares vs. National

Labor Relations Commission, Philippine Long Distance Telephone Co., Inc.
and Ambrosio Hugo.
The facts as borne by the records are:
Sometime in May, 1989, Edgardo D. Millares, petitioner, was employed by
the Philippine Long Distance Telephone Co., Inc. (PLDT), respondent
company, as cable splicer helper. At the time of his dismissal from the service,
he was a junior cable splicer at the OPSIM II, Tondo Exchange, receiving a
monthly salary of P7,300.00.
On August 8, 1995, Ambrosio B. Hugo, Manager of respondent companys
Tondo Exchange, received a complaint from Celestina Ignacio, a prospective
telephone subscriber residing at 91-R Mahomas Compound, Tondo, Manila.
She reported that on May 10, 1995, petitioner, for a service fee of 3,800.00,
promised to install a telephone line at her residence but that he failed to do so;
and that despite her demand, he refused to return to her said amount.
During the clarificatory hearing conducted by respondent company on
August 19, 1995, petitioner denied that he knew Celestina Ignacio and that he
received 3,800.00 from her. But eventually, he admitted his offense and
promised to repay her the amount.
Thereafter, respondent company sent him two (2) separate inter-office
memoranda (IOM) dated August 28, 1995 and September 6, 1995, charging
him with willful violation of company rules and regulations and directing him to
submit a written explanation. However, he refused and remained obstinate.
Meantime, on September 26, 1995, petitioner paid Celestina the amount
of 3,800.00. Consequently, she executed a written retraction stating that she
was forced to file a complaint against petitioner when he failed to pay his loan
of 3,800.00.
Respondent company found petitioner guilty of extortion and serious
misconduct. Consequently, he was dismissed from the service effective July
19, 1996.
Aggrieved, petitioner filed with the Labor Arbiter a complaint for illegal
dismissal and damages against respondent and Ambrosio B. Hugo, docketed
as NLRC NCR Case No. 00-10-06367-96.
In due course, the Labor Arbiter rendered a Decision dated April 30, 1999
holding that petitioner was illegally dismissed from employment and ordering
respondent company to reinstate him to his former position and to pay
him P263,901.08 representing his backwages, allowances and other benefits.
The dispositive portion of the Decision reads:

WHEREFORE, above premises duly considered, we find the dismissal of complainant

as illegal.

Accordingly, respondent PLDT is hereby ordered to immediately reinstate

complainant to his position as Junior Cable Splicer without loss of seniority and other
privileges and to pay his full backwages inclusive of allowances and other benefits
from the time of his dismissal on July 19, 1996 up to the date of his actual
reinstatement, the award being tentatively computed as follows:

1. Backwages:

7/19/96 4/30/99 = 33.37 months

P 7,300.00 x 33.37 P243,601.00

2. 13th Month Pay:

1/12 of P243,601.00 20,300.08

----------------

P263,901.08

The claim for damages is dismissed for lack of merit.

Individual respondent Ambrosio Hugo is absolved of any liability for he only acted in
his official capacity as Manager.

SO ORDERED.

Upon appeal, the National Labor Relations Commission (NLRC)

promulgated a Decision dated September 29, 2000 reversing the Arbiters
assailed Decision, thus:

We find the instant appeal to be impressed with merit.

The act of soliciting money from a prospective telephone subscriber in exchange for
an expeditious installation of telephone line is inherently unlawful and immoral,
regardless of whether the solicitor has the capacity to make good his undertaking or
not for as long as he is an employee of the telephone company, as what obtained in the
case at bar. It constitutes grave misconduct by all standards, a just cause for
termination under Article 281 of the Labor Code.

xxxxxx

It is reversible error to rely heavily on the recantation made by Mrs. Ignacio. From all
indications, the belated change of heart of Mrs. Ignacio was an afterthought purposely
designed to facilitate the defense of appellee after she received full payment from him.
Her recantation did not obliterate the liability of the appellee in the light of the
investigation report of Mr. Reyes which deserves and should have been accorded full
faith and credit being the result of an impartial and honest to goodness investigation
conducted based on Mrs. Ignacios letter-complaint. To honor the recantation is
tantamount to condoning mockery of the law. At most, it may be treated as an
instrument of falsehood, hence, must be ignored.

We likewise decline to yield to the claim of denial of due process. The issuance of the
twin Inter Office Memoranda (IOM) dated August 28 and September 6, 1995, both of
which herein appellee have refused to honor, readily impeach the veracity of this
particular issue. These IOMs contained a detailed information relevant to the
complaint of Mrs. Ignacio which are sufficient to apprise the appellee of the nature of
the accusation against him. He was given the opportunity to explain in writing his side
of the controversy by virtue of those IOMs but he opted to remain silent. Due process
does not require actual hearing but mere opportunity to be heard.

xxxxxx

WHEREFORE, the decision appealed from is REVERSED and SET ASIDE. The
appeal is GRANTED. The dismissal of complainant is affirmed.

SO ORDERED.

Petitioner then filed a motion for reconsideration but was denied by the
NLRC in a Resolution dated May 31, 2001. Hence, he filed with the Court of
Appeals a petition for certiorari, docketed as CA-G.R. SP No. 66611.
On April 16, 2002, the Appellate Court rendered a Decision affirming the
assailed Decision of the NLRC, thus:

The pivotal question is whether or not the NLRC gravely abused its discretion in
finding that petitioner was validly terminated for a just cause.

xxx

Petitioner was given every opportunity to defend himself. He was asked to submit a
written explanation why he should not be held liable for violating company
regulations by negotiating with a subscriber for the facilitation of telephone
installation in consideration of the amount of P3,800.00. IOM was given to him not
just once but twice before he was served the termination letter. Notwithstanding that
there was a ten-month gap between said notices, respondent PLDT validly effected
petitioners dismissal.
The denunciation of Mrs. Ignacio against the petitioner on separate occasions were
given candidly, spontaneously and before she was influenced to recant after petitioner
was compelled to return the money after receiving the IOM. While there is no hard
and fast rule to determine the truthfulness of ones testimony, that which conforms,
however, to the quotidian knowledge, observation and experience of man is often
deemed to be reliable (People vs. Nio, 290 SCRA 155).

The State guarantees a workers security of tenure which can well be his most precious
economic right thus, all efforts must be exerted to protect him from unjust deprivation
of his job (Quijano vs. Mercury Drug Corp., 292 SCRA 109). However, the act of
demanding monetary consideration in exchange for the promise to facilitate telephone
transfer is, aside from being contrary to PLDT policies, constitutes serious misconduct
punishable by dismissal under Article 282 of the Labor Code. Needless to say, PLDT
has the right to protect itself against employees whose continued employment is
detrimental to its interest.

xxxxxx

WHEREFORE, premises considered, the petition is DENIED for lack of merit.

SO ORDERED.

On May 8, 2002, petitioner filed a motion for reconsideration, but was denied
by the Appellate Court in a Resolution dated June 26, 2002.
Hence, this petition for review on certiorari.
Petitioner contends, among others, that the Court of Appeals seriously erred
(1) in finding that there is substantial evidence to support his dismissal from the
service; (2) in disregarding the retraction of Celestina Ignacio; and (3) in holding
that respondent companys inter-office memoranda dated August 28, 1995 and
September 6, 1995 show that he was not deprived of his right to due process.
The fundamental issue here is whether respondent company was able to
prove by substantial evidence that petitioner is liable for gross misconduct by
demanding from Celestina Ignacio a service fee of P3,800.00 for the installation
of a telephone line. The issue raised is factual. It is basic that the findings of
fact by the Court of Appeals, when supported by substantial evidence, are
conclusive and binding upon the parties and are not reviewable by this Court,
unless the case falls under any of the exceptions to the rule, such as when the
findings by the Appellate Court are not supported by evidence. This exception
[3]

is being relied upon by petitioner.

 Here, we find there is substantial evidence to support the findings of the
Court of Appeals that petitioners dismissal from the service is valid. Well-
entrenched is the rule that substantial proof is sufficient as basis for the
imposition of any disciplinary action upon the employee. The standard of
substantial evidence is satisfied where the employer, as in this case, has
reasonable ground to believe that the employee is responsible for the
misconduct and his participation therein renders him unworthy of trust
and confidence demanded by his position. That petitioner violated
[4]

respondent PLDTs rules and regulations and committed serious misconduct in

the performance of his duties, have been proved by Celestina Ignacio.
Respondent thus lost its trust and confidence in petitioner. Under Article 282 of
the Labor Code, as amended, these are just causes for dismissing him from the
service.
Moreover, the Appellate Court did not err in rejecting Celestinas retraction.
A careful perusal of the minutes of the clarificatory hearing reveals that she
retracted her complaint only after respondent paid her, thus:
ATTY. OLITOQUIT:
When this Mr. Reyes went to your residence to investigate regarding your complaint,
you did not make any letter retraction or affidavit of retraction?
WITNESS:
Wala sir.
ATTY. OLITOQUIT:
And after that meeting in your residence, there was still another meeting between you,
Mr. Reyes and the complainant at the PLDT office?
WITNESS:
Yes, sir.
ATTY. OLITOQUIT:
And in that meeting Madam witness you did not write any letter or filed any
sinumpaang salaysay staing that the money Mr. Millares got from you was only a
loan?
WITNESS:
Wala, sir.
ATTY. OLITOQUIT:
In other words, the first retraction you made was this document dated September 27,
1995?
WITNESS:
Yes, sir.
 ATTY. OLITOQUIT:
In other words, Madam witness, you made this retraction including the sinumpaang
salaysay which was earlier marked as Exhibit 5, after you were paid by Mr.
Millares?
WITNESS:
Oho, pagkatapos niyang magbayad, wala na siyang kasalanan sa akin.

Retractions are frowned upon by the courts. A retraction of a testimony is

exceedingly unreliable, for there is always the probability that it may later on be
repudiated. Courts look with disfavor upon retractions, because they can easily
be obtained from witnesses through intimidation or for monetary consideration.
A retraction does not necessarily negate an earlier declaration. [5]

Finally, there is no cogent reason why we should not accord deference and
finality to the Appellate Courts finding that petitioner was accorded his right to
due process. In Santos vs. San Miguel Corporation, we reiterated the well-
[6]

entrenched rule that (p)rocedural due process requires the employer to give the
employee two notices. First is the notice apprising him of the particular acts or
omissions for which his dismissal is sought. Second is the subsequent notice
informing him of the employers decision to dismiss him. In the case at bar,
respondent company sent petitioner the required notices. Clearly, he was not
deprived of his right to due process.
WHEREFORE, the petition is DENIED. The assailed Decision dated April
16, 2002 and the Resolution dated June 26, 2002 of the Court of Appeals in
CA-G.R. SP No. 66611 are hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.

[G.R. No. 142759. November 10, 2004]

PHILTREAD TIRE & RUBBER CORPORATION, petitioner,

vs. ALBERTO VICENTE, respondent.

DECISION
SANDOVAL-GUTIERREZ, J.:

For resolution is a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, assailing the Decision dated November
[1]

25, 1999 and the Resolution dated March 22, 2000 rendered by the Court of
[2]

Appeals in CA-G.R. SP No. 52723, entitled Philtread Tire and Rubber

Corporation vs. National Labor Relations Commission and Alberto Vicente.
The facts as borne by the records are:
On February 9, 1978, Alberto M. Vicente, respondent, was employed by
Philtread Tire and Rubber Corporation, petitioner. At the time of his dismissal
from the service, he was a housekeeping coordinator at the General Services
Department, receiving a monthly salary of P8,784.00. One of his duties was to
recommend to petitioner, for its approval, projects intended for the beautification
and maintenance of its premises.
On February 15, 1991, Engr. Ramon Y. Dumo, Administrative Officer and
Head of petitioners Security and Safety Department, received a complaint from
Crisente Avis, a sign painter with whom petitioner had a service contract. Avis
reported that he was being forced by respondent to overprice by P1,000.00 his
service fee of P3,800.00 and to deliver to him (respondent) the said amount
of P1,000.00; and that should Avis fail to do so, he will no longer be awarded
future contracts.
Acting thereon, Engr. Dumo conducted an investigation attended by
respondent, Avis, and three representatives from the workers union. Avis
declared that sometime in January 1991, petitioner hired him to paint its trash
cans, push carts and cigarette waste boxes. They agreed that his services will
be paid upon completion of the painting job and submission of the
corresponding invoice. However, herein respondent instructed him to prepare
an invoice indicating therein that his fee for his painting services is P4,800.00,
instead of P3,800.00. Respondent even assured him that the petitioner will
approve the invoice.
At this juncture, petitioner assigned respondent to perform janitorial duties,
prompting him to request an immediate disposition of his case. But when
petitioner directed him to submit his evidence within three (3) days from notice,
he failed to comply.
After evaluating the records on hand, petitioner found respondent guilty of
extortion, fraud, serious misconduct and willful breach of trust and confidence.
Petitioner then sent him a notice terminating his services effective March 3,
1991.
 Eventually, respondent filed with the Labor Arbiter a complaint for illegal
dismissal and damages against petitioner and Engr. Dumo, docketed as NLRC
NCR Case No. 00-03-01376-91.
In due course, the Labor Arbiter rendered a Decision dated December 3,
1992 dismissing respondents complaint for lack of merit.
Upon appeal, the National Labor Relations Commission (NLRC)
promulgated a Decision dated August 29, 1994 reversing the Arbiters assailed
Decision, holding that respondent was illegally dismissed, thus:

WHEREFORE, premises considered, the appealed decision is hereby REVERSED

and SET ASIDE and a new one entered declaring respondent Ramon Y. Dumo and
Philtread Tire and Rubber Co. to have illegally dismissed complainant Alberto M.
Vicente. Accordingly, respondent is hereby ordered to reinstate complainant to his
former or equivalent position without loss of seniority rights and privileges with full
backwages from the time of his dismissal up to the time of his reinstatement, whether
physical or payroll. Corollary to this, complainant shall be entitled to and be paid for
whatever increases and benefits that have accrued to his position reckon from the time
of his dismissal.

SO ORDERED.

Petitioner then filed a motion for reconsideration but was denied by the
NLRC in a Resolution dated October 11, 1994. Hence, it filed with this Court a
petition for certiorari with prayer for the issuance of a temporary restraining
order, docketed as G.R. No. 118337.
Pursuant to our ruling in St. Martins Funeral Home vs. NLRC, we referred
[3]

the petition to the Court of Appeals for appropriate action and disposition.
On November 25, 1999, the Appellate Court rendered a Decision affirming
the assailed Decision of the NLRC, thus:

After a review of the records, We find no cogent reason to reverse the respondent
Commission.

Private respondent herein was dismissed allegedly for asking, not receiving, the sum
of P1,000.00, from Crisente Avis. x x x.

This alleged request is not supported by any documentary evidence. It is strange that
no purchase order was presented to show that Crisente Avis was given a contract to
paint the trash cans and cigarette butt boxes at the company premises for the contract
price of P3,800.00 x x x. In this instance, Mr. Avis did not show any contract to prove
that his services were estimated at P3,800.00, as proof that private respondent asked
him to overprice it by P1,000.00.

Moreover, it is strange that in reporting the alleged request of private respondent, Mr.
Avis complained, not to the personnel department, or to the department in charge of
giving out contracts or paying for them, but to the security department. x x x. The
only explanation We can find is that the security guards are headed by Mr. Ramon
Dumo, who was apparently displeased with private respondent.

xxx

There is also no clear showing that private respondent was in a position to influence
company decisions in giving out contracts of services, so that Mr. Avis should be
pressured to acceding to his request.

With regard to the report of Avis that private respondent tricked him into going to
Cavite to execute an affidavit of retraction, we see no reason why Avis could not have
simply refused to sign such affidavit, especially since he was brought before a notary
public, a lawyer, whom he could have sought legal assistance.

Finally, private respondent was dismissed for willful violation of trust x x x. However,
there is no showing that he occupied a position of trust and confidence. x x x. The
position of private respondent as Housekeeping Coordinator at the General Services
Department of Philtread can hardly be considered as one of trust and confidence.

WHEREFORE, the petition is hereby DISMISSED for lack of merit.

SO ORDERED.

On December 10, 1999, petitioner filed a motion for reconsideration, but

was denied by the Appellate Court in a Resolution dated March 22, 2000.
Hence, this petition for review on certiorari.
Petitioner contends, among others, that the Court of Appeals seriously erred
(1) in finding that there is no substantial evidence to support the complaint
against petitioner; and (2) in disregarding the testimony of Crisente Avis on the
ground that it is an affirmation of his unverified complaint.
The fundamental issue here is whether petitioner was able to prove by
substantial evidence that respondent is liable for extortion by forcing Avis to
increase his service fee by P1,000.00. The issue raised is factual. It is basic
that the findings of fact by the Court of Appeals, when supported by substantial
evidence, are conclusive and binding upon the parties and are not reviewable
by this Court, unless the case falls under any of the exceptions to the rule, such
as when the findings by the Appellate Court are not supported by
evidence. This exception is being relied upon by petitioner.
[4]

Here, there is neither direct nor documentary evidence to prove that

respondent was involved in extortion. In fact, a careful perusal of the minutes
of the investigation reveals that Avis did not categorically state that he was
pressured by respondent to overprice his service fee, thus:

AGENDA: To conduct preliminary investigation regarding the complaint of one

CRISENTE AVIS, a painter and a Philtread contractor, alleging that Mr. Alberto
Vicente is pressuring him to raise his service fee so that the latter will also gain grease
money.

xxx

III. Mr. Avis quoted: Talagang sinabi sa akin ni Abet (referring to respondent) na:
Cris, gawin mong P4,800 at akin iyong sobra. Mr. Avis also quoted: P3,500 lamang
ang gusto ko sana, hindi ko alam kung biro o totoo ang sinabi niya. Mr. Avis averred:
Nang mag-follow up ako ngayong umaga, nagtataka si Mr. Sabong kung bakit mataas
ang aking singil.

IV. Mr. Vicente quoted as Mr. Avis saying: Abet, pwede ba ito, P3,500? Abet
answered: Ikaw, mahaba at matagal ang trabaho mo. Cris answered: Abet, lakarin
natin ito, ako ang bahala sa iyo.

x x x. [5]

As gleaned from the above minutes, it is not clear that respondent urged
or forced Avis to increase his service fee by P1,000.00 and to give the
amount to him (respondent). In fact, Avis is not certain whether
respondent was really serious when he allegedly told him (Avis) to
increase his service fee to P4,800.00. We thus hold that petitioner failed to
prove its charge by substantial evidence. Substantial evidence is that amount
of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion. [6]

The Appellate Court did not err in concluding that there is no valid cause in
terminating respondents employment. The well-established rule is that the
findings of fact of the Court of Appeals, particularly where they are in absolute
agreement with that of the NLRC, as in this case, are accorded not only great
respect but even finality and are deemed binding upon this Court. [7]
 Verily, respondent who was illegally dismissed from work is entitled to
reinstatement without loss of seniority rights, full backwages, inclusive of
allowances, and other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his
actual reinstatement. [8]

However, the circumstances obtaining in this case do not warrant the

reinstatement of respondent. Aside from the fact that antagonism caused a
severe strain in the parties employer-employee relationship, petitioner company
has completely ceased its tire manufacturing and marketing operations
effective November 11, 1994, as evidenced by its Notice of Indefinite
Suspension of Manufacturing Operations dated November 10, 1994 to the [9]

Security and Exchange Commission and its Application for Business

Retirement dated February 22, 1996 filed with the Business Permits &
[10]

Licensing Office of the City of Muntinlupa. Thus, a more equitable disposition

would be an award of separation pay equivalent to at least one month pay, or
one month pay for every year of service, whichever is higher, (with a fraction of
at least six (6) months being considered as one (1) whole year), in addition to
[11]

his full backwages, allowances and other benefits. [12]

Records show that respondent was employed from February 9, 1978 to

March 3, 1991, or for thirteen (13) years, with a monthly salary of P8,784.00.
Hence, he is entitled to a separation pay of P114,192.00.
WHEREFORE, the assailed Decision dated November 25, 1999 and the
Resolution dated March 22, 2000 of the Court of Appeals in CA-G.R. SP No.
52723 are hereby AFFIRMED with MODIFICATION in the sense that, in lieu of
reinstatement, respondent is awarded separation pay equivalent
to P114,192.00, plus his full backwages, and other privileges and benefits, or
their monetary equivalent, during the period of his dismissal up to his supposed
actual reinstatement.
Costs against petitioner.
SO ORDERED.

[G.R. No. 147125. January 14, 2004]

SHOPPES MANILA, INC., petitioner, vs. THE HON. NATIONAL LABOR
RELATIONS COMMISSION, LABOR ARBITER ERMITA
ABRASALDO-CUYUCA and LORIE TORNO, respondents.

DECISION
CALLEJO, SR., J.:

Before us is a petition for review under Rule 45 of the Rules of Court filed
by Shoppes Manila, Inc. for the nullification of the May 31, 2000 Decision and [1]

February 2, 2001 Resolution of the Court of Appeals (CA) in CA-G.R. SP No.

54109.

The Antecedents

The petitioner is a domestic corporation engaged in garments

manufacturing using the brand name KAMISETA. On May 6, 1994, the
petitioner employed private respondent Lorie Torno as trimmer with a salary
of P80/day. In September 1995, the respondents salary was increased
to P110/day. A year later, it was increased to P165/day. In April 1997, her
salary was further increased to P185/day. The private respondent and a co-
employee, Maricar Buan, were tasked to handle the inventory of finished
products.
Sometime thereafter, the petitioner started to receive information from the
head of its production department that, according to other employees, Buan and
the private respondent had been stealing KAMISETA items from the
factory. The petitioner had the witnesses interviewed. Susan Paligamba and
Loly dela Cruz, co-employees of Buan and the private respondent, executed
unverified statements implicating the latter. In her statement, Paligamba
declared that the private respondent encouraged her to steal a belt, while Dela
Cruz stated that she saw KAMISETA items in the private respondents
house. When informed of the foregoing statements, the latter agreed to have
her house inspected and searched for the alleged stolen items. On July 30,
1997, the private respondents supervisor, Ms. Myrasol O. Silva, conducted the
inspection and submitted a report to the effect that she found the following items
in the private respondents house:
1. Several yardages of fabrics the one used for Kamiseta T-Shirt (waist
cutting).
 2. She also showed me 2 pcs. of T-Shirts made out of wrong cut materials
for Kamiseta T-Shirts. These are cut T-Shirt panels with fabric
damage.
3. Used Kamiseta wall papers.
4. New wall papers that were intended to be used for Nautical Shop. [2]

On the basis of the said report, the petitioner issued a disciplinary action
form suspending the private respondent indefinitely without pay. On August
[3]

25, 1997, a notice of dismissal was addressed to the private respondent

specifying the charge against her, the factual basis thereof and the imposable
penalties for the said charge if proven. The charge and notice read:

1) On July 31, 1997, an investigation was conducted involving you for being
under suspicion of theft.

2) On the same day, two witnesses gave testimonies. One admitted to visiting
your home and finding numerous KAMISETA clothing.The other said
you encouraged her to steal a KAMISETA belt from the stocks.

3) On the same day, you were made aware of the allegations made against you
and you were given a chance to explain yourself. You were also asked
by representatives of the Company if you were willing to have your
home inspected. You agreed and accompanied the said representatives to
your residence.

4) During the said inspection, the representatives found the following items:

a. KAMISETA fabrics (approx. 1 yds)

b. 2 pcs. shirts made out of KAMISETA excess cuttings
c. NAUTICAL SHOP wall paper

5) On July 31, 1997, you were given a disciplinary action by the company and
placed under indefinite suspension without pay for stealing. You signed
the said form thereby accepting the charges as true.

6) You have violated Article 12 under Category 4 of our Company rules and
regulations. You have received a copy of this handbook on March 17,
1997 (Booklet No. 63) and on the same day you signed your acceptance
and compliance to the rules therein.

ARTICLE 12 UNDER CATEGORY 4 states: Ang pagnanakaw sa kompanya

o pagnanakaw sa iba. Kasama nito ang: pagkuha ng anumang pag-aari mula
 sa kapwa empleyado ng walang pahintulot. Ang paglabas/paggamit ng pera
ng kompanya ng walang pahintulot.

The above violation is punishable by termination.

7) You are hereby called to the Head Office on August 26, 1997 to give you
an opportunity to explain yourself further.

8) Non-attendance would mean you have no cause to explain yourself further

and the Company shall proceed with the evaluation of your case.[4]

The private respondent failed to appear during the scheduled

hearing. Consequently, the petitioner decided to dismiss the private respondent
from her employment. When notified of the petitioners decision, the private
respondent filed a complaint for illegal dismissal with prayer for reinstatement
and payment of backwages, non-payment of service incentive leave pay and
13th-month pay against the petitioner before the National Capital Regional
Arbitration Branch of the National Labor Relations Commission (NLRC),
docketed as NLRC-NCR Case No. 00-09-06160-97. The case was initially
raffled to Labor Arbiter Emerson C. Tumanong (LA Tumanong for
brevity). Despite mandatory conferences, the parties did not reach an amicable
settlement. In due course, they submitted their respective position papers and
replies. The petitioner filed a motion for the labor arbiter to conduct a formal
investigation on its claim that a full blown hearing during which the witnesses
can be cross-examined by the opposing counsel was necessary to ascertain
the truth. Acting on the motion, LA Tumanong granted the same and set the
[5]

case for hearing. However, the hearing failed to materialize because of the
absences of either the private respondent or her counsel. In the meantime, LA
Tumanong was replaced by Labor Arbiter Ermita Abrasaldo-Cuyuca (LA
Cuyuca for brevity) who issued an order declaring that the case was submitted
for decision. The petitioner filed a manifestation and motion informing LA
Cuyuca that a formal hearing had been set by LA Tumanong and requested
that the case be set for hearing anew. However, no action was taken by LA
Cuyuca on the said motion.
On August 31, 1998, LA Cuyuca rendered a decision holding that the
respondent was illegally dismissed and directed the petitioner to pay P62,530
as backwages and P19,240 as separation pay to the private respondent. The
decretal portion of the decision reads:
WHEREFORE, in view of the foregoing, Shoppes Manila, Inc., is declared to have
illegally dismissed Lorie Torno and the former is ordered to pay the latter the amount
of P62,530.00 representing backwages and P19,240.00 as separation pay. [6]

LA Cuyuca declared that the private respondent was denied of her right to
due process before she was dismissed from her employment and that the
petitioner failed to show that it notified the private respondent of the charges
against her. The petitioner also failed to show that the private respondent
received the notice of dismissal. Hence, the dismissal of the private respondent
was illegal. However, according to the labor arbiter, reinstatement could no
longer be effected, as the relationship between the private respondent and the
petitioner had been strained and ruptured. The private respondents claims for
non-payment of service incentive leave and 13th-month pay were denied for
her failure to specify the period covered therein. Her claim of underpayment of
wages (wage differential) was, likewise, denied, as it was not included in the
original complaint.
Aggrieved, the petitioner appealed the decision to the NLRC, alleging that
it was deprived of its right to a formal hearing before the labor arbiter rendered
her decision. It argued that while the conduct of hearing is not mandatory in
labor cases, the Labor Arbiter was mandated to do so in this case because LA
Tumanong had already declared that a formal hearing was necessary.Hence,
the petitioner had acquired a vested right thereto. LA Cuyucas failure to conduct
a hearing deprived the petitioner of its vested right; consequently, her decision
was null and void.
On March 17, 1999, the NLRC issued a resolution dismissing the appeal
and affirming the decision of the labor arbiter. The dispositive portion of which
reads:

WHEREFORE, premises considered, the appeal is hereby dismissed for lack of merit
and the decision affirmed en (sic) toto.
[7]

The NLRC reasoned that a formal hearing of the case on its merits is not
mandatory in labor cases but is dependent on the discretion of the labor arbiter
who has the sole power to determine whether or not there is a need for a
hearing. Thus, in finding that there was no longer a need to conduct a hearing
before rendering judgment of the case on its merits, LA Cuyuca cannot be said
to have committed an error.
The NLRC also ruled that no error could be imputed to LA Cuyuca when
she found that the petitioner did not comply with the two-notice requirement
upon the petitioners failure to show that (a) she was notified of the charges
against her, and (b) the notice of dismissal was sent to her.
The petitioner filed a motion for reconsideration which was denied by the
NLRC in a Resolution dated May 18, 1999.
Dissatisfied, the petitioner filed a petition for certiorari under Rule 65 of the
Rules of Court before the Court of Appeals. The petitioner alleged therein that
LA Cuyuca committed a grave abuse of discretion when she rendered a
decision without even conducting a formal hearing to enable the petitioner to
cross-examine the private respondent and her witnesses. It reiterated the
contention that it had acquired a vested right to a formal hearing when LA
Tumanong granted its motion therefor.
The CA rendered judgment affirming the decision of the NLRC and the
finding of both the NLRC and LA Cuyuca that the private respondent was
deprived of due process and was thus illegally dismissed. The CA ruled that as
laid down in Section 4, Rule V of the New Rules of Procedure of the NLRC, a
formal hearing is not required in proceedings before the labor arbiter; hence, a
failure on the part of LA Cuyuca to conduct a formal hearing prior to the rendition
of judgment did not give rise to a grave abuse of discretion on her
part. Moreover, the petitioner was able to appeal the decision of the labor arbiter
to the NLRC; it cannot thus contend that it was deprived of its right to defend
itself.
The CA emphasized that in a petition for certiorari under Rule 65 of the
Rules of Court, the CA cannot evaluate the findings of fact of the labor arbiter
and the NLRC. Its inquiry is limited to the determination of whether or not the
public respondent had acted without or in excess of jurisdiction or with grave
abuse of discretion. In this case, the labor arbiter declared that the petitioner
failed to show that the private respondents dismissal was for a just cause.
The petitioners motion for reconsideration was denied in a CA Resolution
dated February 2, 2001. [8]

The petitioner forthwith filed the instant petition, assigning the following
errors:
I

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE

ABSENCE OF A FORMAL HEARING DID NOT AMOUNT TO A DENIAL OF
PETITIONERS RIGHT TO DUE PROCESS.

II
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE
ILLEGALITY OF PRIVATE RESPONDENTS DISMISSAL DESPITE THE
EXISTENCE OF JUST CAUSES IN SUPPORT THEREOF. [9]

The petition is barren of merit.

The petitioner contends that when LA Tumanong agreed to conduct a formal
hearing of the case and, indeed, set the case for hearing, the petitioner
thenceforth acquired a vested right. This decision could no longer be set aside
by LA Tumanongs successor; otherwise, the petitioner would be deprived of its
right to due process. The petitioner likewise pointed out that the violation of the
notice requirement did not render the private respondents dismissal as illegal,
especially considering that the termination of the employment was based on a
just and valid cause.
We agree with the CA that the petitioner did not have a vested right to a
formal hearing simply and merely because LA Tumanong granted its motion
and set the case for hearing. Pursuant to Section 5, Rule V of the New Rules
of Procedure of the NLRC, the labor arbiter has the authority to determine
[10]

whether or not there is a necessity to conduct formal hearings in cases brought

before him for adjudication. The holding of a formal hearing or trial is
discretionary with the labor arbiter and is something that the parties cannot
demand as a matter of right. It is entirely within his authority to decide a labor
case before him, based on the position papers and supporting documents of
the parties, without a trial or formal hearing. The requirements of due process
[11]

are satisfied when the parties are given the opportunity to submit position
papers wherein they are supposed to attach all the documents that would prove
their claim in case it be decided that no hearing should be conducted or was
necessary. [12]

The order of LA Tumanong granting the petitioners motion for a hearing of

the case was not conclusive and binding on LA Cuyuca who had the discretion
either to hear the case before deciding it, or to forego with the hearing if, in her
view, there was no longer a need therefor as the case could be resolved on its
merits based on the records.
Similarly, we affirm the finding of the CA that the private respondent was
illegally dismissed. In order to effect a valid dismissal, the law requires that (a)
there be just and valid cause as provided under Article 282 of the Labor
Code; and (b) the employee be afforded an opportunity to be heard and to
[13]

defend himself. [14]

As stated by the CA, the petitioner had failed to show that it had complied
with the two-notice requirement: (a) a written notice containing a statement of
the cause for the termination to afford the employee ample opportunity to be
heard and defend himself with the assistance of his representative, if he so
desires; (b) if the employer decides to terminate the services of the employee,
the employer must notify him in writing of the decision to dismiss him, stating
clearly the reason therefor. [15]

We must stress that only errors of law are generally reviewed by this Court
in petitions for review on certiorari of the CA decisions. Questions of fact are
[16]

not entertained. The Court is not a trier of facts, and in labor cases; this
[17]

doctrine applies with greater force. Factual questions are for labor tribunals to
resolve. The findings of fact of quasi-judicial bodies, like the NLRC, are
[18]

accorded with respect, even finality, if supported by substantial

evidence. Particularly, when passed upon and upheld by the CA, they are
binding and conclusive upon the Court and will not normally be disturbed. [19]

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of

merit. The Decision dated May 31, 2000 and Resolution dated February 2, 2001
of the Court of Appeals in CA-G.R. SP No. 54109 are AFFIRMED.
SO ORDERED.

[G.R. No. 146621. July 30, 2004]

RENE P. VALIAO, petitioner, vs. HON. COURT OF APPEALS,

NATIONAL LABOR RELATIONS COMMISSION-FOURTH DIVISION
(Cebu City), WEST NEGROS COLLEGE, respondents.

DECISION
QUISUMBING, J.:

For review on certiorari is the Decision dated August 22, 2000 of the Court
[1]

of Appeals in CA-G.R. SP No. 55133, and its Resolution dated November 22,
[2]

2000 denying the motion for reconsideration. The Court of Appeals dismissed
the petition for certiorari filed by petitioner and affirmed the Resolution dated
July 7, 1999 of the National Labor Relations Commission (NLRC)-Fourth
Division in NLRC Case No. V-000134-98 (RAB Case No. 06-01-10026-95),
which sustained the Decision of Labor Arbiter Benjamin E. Pelaez, directing
private respondent West Negros College (WNC) to pay petitioner Rene P.
Valiaos salary during the period of his preventive suspension and attorneys
fees, while dismissing all other claims.
The facts, as culled from records, are as follows:
On February 5, 1990, petitioner Rene Valiao was appointed by private
respondent West Negros College (WNC) as Student Affairs Office (SAO)
Director, with a starting salary of P2,800 per month. On May 14, 1990, he was
assigned as Acting Director, Alumni Affairs Office.
On July 29, 1990, petitioner was transferred to a staff position and
designated as Records Chief at the Registrars Office but was again re-assigned
as a typist on June 24, 1991.
The latest re-assignment was due to his tardiness and absences, as
reflected in the summary of tardiness and absences report, which showed him
to have been absent or late for work from a minimum of seven (7) to a maximum
of seventy-five (75) minutes for the period March to October 31, 1991, and to
have reported late almost every day for the period November to December
1991.
Copies of his tardiness/absences reports were furnished petitioner, along
with memoranda requiring him to explain but his explanations were either
unacceptable or unsatisfactory. Subsequent reports also showed that he did
not change his habits resulting in tardiness and absences. He was even caught
one time manipulating the bundy clock, thus necessitating another
memorandum to him asking him to explain his dishonest actuations in
accomplishing the daily attendance logbook and in using the bundy clock.
On December 10, 1991, petitioner received a suspension order without pay
for fifteen (15) days effective January 1, 1992, because of dishonesty in
reporting his actual attendance. After serving the suspension, the petitioner
reported back to office on January 16, 1992.
On June 15, 1992, another adverse report on tardiness and absences from
the Registrar was made against the petitioner prompting WNC to send him
another memorandum with an attached tardiness and absences report, calling
his attention on his tardiness and absences for the period February to April
1992.
On June 20, 1992, petitioner sent a letter of appeal and explained his side
to the new college president, Suzette Arbolario-Agustin, who gave petitioner
another chance. The petitioner was then appointed as Information Assistant
effective immediately.However, the petitioner did not immediately assume the
post of Information Assistant prompting the President of private respondent
WNC to call his attention. When the petitioner finally assumed his post, he was
allowed a part-time teaching job in the same school to augment his income.
Sometime in December 1992, WNC won a case against the officials of the
union before the NLRC. Petitioner was ordered to prepare a media blitz of this
victory but the petitioner did not comply with the order on the ground that such
a press release would only worsen the already aggravated situation and
strained relations between WNC management and the union officials.
When petitioner reported for work on the first day of January 1993, he was
relieved from his post and transferred to the College of Liberal Arts as Records
Evaluator. Not for long, the Dean of the Liberal Arts sent a letter to the Human
Resources Manager complaining about the petitioners poor performance and
habitual absenteeism, as shown in the daily absence reports.
On January 18, 1993, petitioner was again absent from work without
permission or notice to his immediate superior. It turned out that he went to
Bacolod City and on January 28, 1993, the petitioner was one of those arrested
during a raid in the house of one Toto Ruiz, a suspected drug pusher and was
brought to the Bacolod Police Station along with four (4) other suspects. Upon
further search and investigation by the Narcotics Control Division, the petitioner
was found possessing two (2) suspected marijuana roaches (butts) which were
placed inside his left shoe. The event was widely publicized, focusing on
petitioners position as an Economics teacher of WNC, and considering further
that one of his fellow suspects was a member of the Philippine Army, who was
caught with an unlicensed firearm, a tooter and other shabu paraphernalia. The
petitioner and other suspects were then charged with violation of the Dangerous
Drugs Act of 1972 (Republic Act No. 6425, as amended).
Petitioner was asked to explain within 24 hours why he should not be
terminated as a result of the raid and the charges against him for violation of
Rep. Act No. 6425 as amended. Petitioner allegedly was not able to answer
immediately since he was in jail and received said memorandum only on
January 30, 1993, although his wife had earlier received the memorandum on
January 28, 1993.
On January 29, 1993, the petitioner was dismissed for failure to answer said
memorandum.
On February 1, 1993, the petitioner wrote to the President of WNC
explaining his side and asking for due process. WNC cancelled its Notice of
Termination dated January 29, 1993, and granted the petitioners request. The
petitioner was notified through a memorandum about the grant of his request
and that a hearing would be conducted. He was then placed under preventive
suspension and an investigation committee was organized to conduct the
probe. On March 6, 1993, a notice of hearing/investigation was sent to the
petitioner.
After the investigation attended by the petitioner and his counsel, with
proceedings duly recorded, the investigation committee recommended the
dismissal of petitioner. A notice of termination was then sent to petitioner
informing him of his termination from the service for serious misconduct and
gross and habitual neglect of duty. The petitioner received the notice on March
25, 1993, but did not file a grievance concerning the notice of termination.
On January 19, 1995, petitioner filed a Complaint against WNC for illegal
suspension, illegal dismissal, backwages, salary differential for salary increases
and other benefits granted after his dismissal as well as for moral and
exemplary damages and attorneys fees.
In its Answer, WNC alleged that petitioner was dismissed on charges of
serious misconduct, and gross and willful neglect of duty. WNC said his
dismissal was effected after due notice and prior hearing. It claimed also that
since petitioner was terminated for a valid cause after a due hearing, the latters
claim for moral and exemplary damages, and attorneys fees had no basis in
fact and in law.
After due proceedings, the Labor Arbiter rendered a decision, the decretal
portion of which reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered DIRECTING

respondent West Negros College to pay complainant Rene P. Valiao (a) P3,300.00 as
salary for the period of his preventive suspension, and (b) P330.00 as attorneys fees,
or the total amount of THREE THOUSAND SIX HUNDRED THIRTY PESOS
(P3,630.00).

Further, all other claims are DISMISSED for lack of merit.

SO ORDERED. [3]

The Labor Arbiter found no justifiable reason to place the petitioner under
preventive suspension as there was no serious or imminent threat to the life or
property of his employer or co-workers.
However, the Labor Arbiter found the dismissal of the petitioner from WNC
to be valid due to absenteeism and tardiness and after he was accorded the
procedural due process aspect of the law as reflected in the records showing
that the petitioner was formally investigated and given the opportunity to refute
the alleged findings by the management of WNC. The Labor Arbiter held that
frequent absenteeism and tardiness of the petitioner constituted not only willful
disobedience but also gross and habitual neglect of duties, which are valid
grounds for termination of employment. He stressed that the petitioners
frequent absences without proper leave of absence was not only unfair to WNC
and the petitioners co-employees but also set an undesirable example to the
employees under his supervision, considering that the petitioner was not a mere
rank-and-file employee but one who owed more than the usual fealty to the
organization.
On appeal to the NLRC, the latter affirmed the decision of the Labor Arbiter,
sustained the latters findings of facts, and made its own findings on the
apprehension of the petitioner for possession of prohibited drugs. The decretal
portion of the decision reads as follows:

WHEREFORE, premises considered, the appeal is DISMISSED and the decision of

the Executive Labor Arbiter is AFFIRMED in its entirety.

SO ORDERED. [4]

Petitioner then filed a Petition for Certiorari under Rule 65 before the Court
of Appeals but this was dismissed for lack of merit.The decretal portion of the
decision reads as follows:

WHEREFORE, the questioned Decision and Resolution dated December 11, 1998
and July 7, 1999, respectively, of public respondent National Labor Relations
Commission are hereby AFFIRMED.

SO ORDERED. [5]

The Court of Appeals held that the petitioner was validly dismissed for
serious misconduct and gross habitual neglect of duties, which was aggravated
by his arrest for violation of Rep. Act No. 6425, as amended [the January 28,
1993 incident] and that he was afforded the twin requirements of notice and
hearing and the opportunity to defend himself by the investigating
committee.The appellate court noted that WNC had presented sufficient
evidence to support petitioners termination from employment after taking into
consideration the totality of the infractions or the number of violations committed
by petitioner during the period of employment and stressed that it properly
exercised its management prerogative by observing due process. Finally, the
Court of Appeals ruled that the NLRC correctly denied the claim for damages
and attorneys fees for lack of evidentiary support.
Petitioner duly filed a Motion of Reconsideration, which was denied by the
Court of Appeals.
Hence, this petition alleging that:
A. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN
HOLDING THAT THE DISMISSAL OF PETITIONER WAS VALID, DESPITE THE
FACT THAT THERE IS CLEAR AND BLATANT VIOLATION OF THE BASIC
CONSTITUTIONAL RIGHTS OF THE HEREIN PETITIONER BOTH SUBSTANTIVE
AND PROCEDURAL DUE PROCESS.
B. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS IN (SIC)
DISMISSING THE RELIEFS FOR MORAL AND EXEMPLARY DAMAGES AND
ATTORNEYS FEES.[6]
In our view, the only relevant issue for our resolution is whether or not the
petitioner was validly dismissed from employment on the ground of serious
misconduct and gross habitual neglect of duties, including habitual tardiness
and absenteeism.
Petitioner claims that his outright dismissal from employment was not valid
and too harsh and that he was not dismissed from employment because of
tardiness or absences but because he was among those apprehended in a
raid. Also, he was not accorded due process because although his wife
received the show cause notice, he did not have the proper mind to reply as he
was in jail and was psychologically disturbed.
Considering the submissions of the parties as well as the records before us,
we find the petition without merit. Petitioners dismissal from employment is valid
and justified.
For an employees dismissal to be valid, (a) the dismissal must be for a valid
cause and (b) the employee must be afforded due process. [7]

Serious misconduct and habitual neglect of duties are among the just
causes for terminating an employee under the Labor Code of the
Philippines. Gross negligence connotes want of care in the performance of
ones duties. Habitual neglect implies repeated failure to perform ones duties for
a period of time, depending upon the circumstances. The Labor Arbiters
[8]

findings that petitioners habitual absenteeism and tardiness constitute gross

and habitual neglect of duties that justified his termination of employment are
sufficiently supported by evidence on record. Petitioners repeated acts of
absences without leave and his frequent tardiness reflect his indifferent attitude
to and lack of motivation in his work. More importantly, his repeated and
habitual infractions, committed despite several warnings, constitute gross
misconduct unexpected from an employee of petitioners stature. This Court has
held that habitual absenteeism without leave constitute gross negligence and is
sufficient to justify termination of an employee. [9]

However, petitioner claims that he was dismissed not for his tardiness or
absences but for his arrest as a suspected drug user.His claim, however, is
merely speculative. We find such contention devoid of basis. First, the
decisions of the Labor Arbiter, the NLRC, and the Court of Appeals are
indubitable. They show that indeed petitioner had incurred numerous and
repeated absences without any leave. Moreover, he was not punctual in
reporting for work. These unexplained absences and tardiness were reflected
on the summary reports submitted by WNC before the labor arbiter, but
petitioner failed to controvert said reports. Second, contrary to petitioners
assertion, the NLRC did not base its conclusions on the fact of the arrest of
petitioner for violation of Rep. Act No. 6425 but on the totality of the number of
infractions incurred by the petitioner during the period of his employment in
different positions he occupied at WNC. Thus:

In the case of petitioner Valiao, his services were terminated by private respondent
after having been found guilty of serious misconduct and gross habitual neglect of
duty which was aggravated by the January 28, 1993 incident. In exercising such
management prerogative, due process was properly observed. Private respondent
presented sufficient evidence to support its act in terminating the services of
petitioner.Private respondent took into consideration the totality of the infractions
or the number of violations committed by petitioner during the period of
employment. Furthermore, it hardly needs reminding that, in view of petitioners
position and responsibilities, he must demonstrate a scrupulous regard for rules and
policies befitting those who would be role models for their young
charges. (Emphasis and italics supplied)
[10]

Indeed, even without the arrest incident, WNC had more than enough basis
for terminating petitioner from employment. It bears stressing that petitioners
absences and tardiness were not isolated incidents but manifested a pattern of
habituality. In one case, we held that where the records clearly show that the
employee has not only been charged with the offense of highgrading but also
has been warned 21 times for absences without official leave, these repeated
acts of misconduct and willful breach of trust by an employee justify his
dismissal and forfeiture of his right to security of tenure. The totality of
[11]

infractions or the number of violations committed during the period of

employment shall be considered in determining the penalty to be imposed upon
an erring employee. The offenses committed by him should not be taken singly
and separately but in their totality. Fitness for continued employment cannot be
compartmentalized into tight little cubicles of aspects of character, conduct, and
ability separate and independent of each other. [12]

Needless to say, so irresponsible an employee like petitioner does not

deserve a place in the workplace, and it is within the managements prerogative
of WNC to terminate his employment. Even as the law is solicitous of the
welfare of employees, it must also protect the rights of an employer to exercise
what are clearly management prerogatives. As long as the companys exercise
of those rights and prerogative is in good faith to advance its interest and not
for the purpose of defeating or circumventing the rights of employees under the
laws or valid agreements, such exercise will be upheld. [13]

Still, petitioner claims that he was not afforded due process so that his
dismissal from employment should be declared invalid.This contention
deserves scant consideration. The Court of Appeals held that the records reveal
that petitioner was afforded the twin requirements of notice and hearing and
was likewise given the opportunity to defend himself before the investigating
committee. We find no reason to set aside these factual findings of the Court of
Appeals as they are supported by evidence on record. Besides, we may not
review the appellate courts findings of fact in an appeal via certiorari, since as
[14]

a rule, the Supreme Courts review is limited to errors of law allegedly committed
by the appellate court. Judicial review of labor cases does not go as far as to
[15]

evaluate the sufficiency of evidence upon which the Labor Arbiter and National
Labor Relations Commission based their determinations. [16]

In this case, petitioner was asked to explain his several absences and
tardiness on many occasions. A notice to explain was sent to him regarding the
arrest incident wherein he was able to reply. An investigation committee was
formed by WNC to investigate the arrest incident and the absences and tardiness
of petitioner. It must be emphasized that proceedings of the committee were duly
recorded, and petitioner actively participated therein by answering the various
questions interposed by the panel members. Finally, a notice of his termination
was sent to petitioner, although he claims to have received it late as he was in
jail. It is an undeniable fact, however, that his wife had actually received the notice
in his house earlier, even before petitioners termination and this matter was later
communicated to him.
At any rate, petitioner was given enough opportunity to be heard, and his
dismissal was based on valid grounds. The essence of due process is simply
an opportunity to be heard, or as applied to administrative proceedings, an
opportunity to explain ones side or an opportunity to seek a reconsideration of
the action or ruling complained of. A formal or trial-type hearing is not at all
times and in all instances essential, as the due process requirements are
satisfied where the parties are afforded fair and reasonable opportunity to
explain their side of the controversy at hand. What is frowned upon is the
absolute lack of notice and hearing. [17]

Finally, the Labor Arbiter found that petitioner is entitled to salary

differentials for the period of his preventive suspension, as there is no sufficient
basis shown to justify his preventive suspension. During the pendency of the
investigation, the employer may place the worker concerned under preventive
suspension if his continued employment poses a serious and imminent threat
to life or property of the employer or of his co-workers. But in this case, there
[18]

is no indication that petitioner posed a serious threat to the life and property of
the employer or his co-employees. Neither was it shown that he was in such a
position to unduly influence the outcome of the investigation. Hence, his
preventive suspension could not be justified, and the payment of his salary
differentials is in order.
However, the award of attorneys fees to him cannot be sustained, in view
of our findings that petitioner was validly dismissed from employment. Said
award lacks legal basis and could not be granted properly in this case.
WHEREFORE, the assailed Decision dated August 22, 2000 and
Resolution dated November 22, 2000 of the Court of Appeals in CA-G.R. SP
No. 55133 are AFFIRMED with MODIFICATION in that the award of attorneys
fees is deleted. No pronouncement as to costs.
SO ORDERED.

KING OF KINGS TRANSPORT, G.R. No. 166208

INC., CLAIRE DELA FUENTE,
and MELISSA LIM, Present:
Petitioners,
QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES,
- versus - TINGA, and
VELASCO, JR., JJ.
Promulgated:
SANTIAGO O. MAMAC,
Respondent. June 29, 2007
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

Is a verbal appraisal of the charges against the employee a breach of the

procedural due process? This is the main issue to be resolved in this plea for review
under Rule 45 of the September 16, 2004 Decision[1] of the Court of Appeals (CA)
in CA-GR SP No. 81961. Said judgment affirmed the dismissal of bus conductor
Santiago O. Mamac from petitioner King of Kings Transport, Inc. (KKTI), but
ordered the bus company to pay full backwages for violation of the twin-notice
requirement and 13th-month pay. Likewise assailed is the December 2, 2004 CA
Resolution[2] rejecting KKTIs Motion for Reconsideration.

The Facts

Petitioner KKTI is a corporation engaged in public transportation and managed by

Claire Dela Fuente and Melissa Lim.

Respondent Mamac was hired as bus conductor of Don Mariano Transit Corporation
(DMTC) on April 29, 1999. The DMTC employees including respondent formed
the Damayan ng mga Manggagawa, Tsuper at Conductor-Transport Workers Union
and registered it with the Department of Labor and Employment. Pending the
holding of a certification election in DMTC, petitioner KKTI was incorporated with
the Securities and Exchange Commission which acquired new buses. Many DMTC
employees were subsequently transferred to KKTI and excluded from the election.
The KKTI employees later organized the Kaisahan ng mga Kawani sa King of
Kings (KKKK) which was registered with DOLE. Respondent was elected KKKK
president.

Respondent was required to accomplish a Conductors Trip Report and submit

it to the company after each trip. As a background, this report indicates the ticket
opening and closing for the particular day of duty. After submission, the company
audits the reports. Once an irregularity is discovered, the company issues an
Irregularity Report against the employee, indicating the nature and details of the
irregularity. Thereafter, the concerned employee is asked to explain the incident by
making a written statement or counter-affidavit at the back of the same Irregularity
Report. After considering the explanation of the employee, the company then makes
a determination of whether to accept the explanation or impose upon the employee
a penalty for committing an infraction. That decision shall be stated on said
Irregularity Report and will be furnished to the employee.

Upon audit of the October 28, 2001 Conductors Report of respondent, KKTI
noted an irregularity. It discovered that respondent declared several sold tickets as
returned tickets causing KKTI to lose an income of eight hundred and ninety pesos.
While no irregularity report was prepared on the October 28, 2001 incident, KKTI
nevertheless asked respondent to explain the discrepancy. In his letter,[3] respondent
said that the erroneous declaration in his October 28, 2001 Trip Report was
unintentional. He explained that during that days trip, the windshield of the bus
assigned to them was smashed; and they had to cut short the trip in order to
immediately report the matter to the police. As a result of the incident, he got
confused in making the trip report.

On November 26, 2001, respondent received a letter[4] terminating his

employment effective November 29, 2001.The dismissal letter alleged that
the October 28, 2001 irregularity was an act of fraud against the company. KKTI
also cited as basis for respondents dismissal the other offenses he allegedly
committed since 1999.

On December 11, 2001, respondent filed a Complaint for illegal dismissal,

illegal deductions, nonpayment of 13th-month pay, service incentive leave, and
separation pay. He denied committing any infraction and alleged that his dismissal
was intended to bust union activities. Moreover, he claimed that his dismissal was
effected without due process.

In its April 3, 2002 Position Paper,[5] KKTI contended that respondent was
legally dismissed after his commission of a series of misconducts and misdeeds. It
claimed that respondent had violated the trust and confidence reposed upon him by
KKTI. Also, it averred that it had observed due process in dismissing respondent and
maintained that respondent was not entitled to his money claims such as service
incentive leave and 13th-month pay because he was paid on commission or
percentage basis.

On September 16, 2002, Labor Arbiter Ramon Valentin C. Reyes rendered judgment
dismissing respondents Complaint for lack of merit.[6]

Aggrieved, respondent appealed to the National Labor Relations Commission

(NLRC). On August 29, 2003, the NLRC rendered a Decision, the dispositive
portion of which reads:

WHEREFORE, the decision dated 16 September 2002 is MODIFIED in that

respondent King of Kings Transport Inc. is hereby ordered to indemnify complainant in
the amount of ten thousand pesos (P10,000) for failure to comply with due process prior
to termination.

The other findings are AFFIRMED.

SO ORDERED.[7]

Respondent moved for reconsideration but it was denied through

the November 14, 2003 Resolution[8] of the NLRC.

Thereafter, respondent filed a Petition for Certiorari before the CA urging the
nullification of the NLRC Decision and Resolution.

The Ruling of the Court of Appeals

Affirming the NLRC, the CA held that there was just cause for respondents
dismissal. It ruled that respondents act in declaring sold tickets as returned tickets x
x x constituted fraud or acts of dishonesty justifying his dismissal.[9]

Also, the appellate court sustained the finding that petitioners failed to comply
with the required procedural due process prior to respondents termination. However,
following the doctrine in Serrano v. NLRC,[10] it modified the award of PhP 10,000
as indemnification by awarding full backwages from the time respondents
employment was terminated until finality of the decision.
 Moreover, the CA held that respondent is entitled to the 13th-month pay
benefit.

Hence, we have this petition.

The Issues

Petitioner raises the following assignment of errors for our consideration:

Whether the Honorable Court of Appeals erred in awarding in favor of the

complainant/private respondent, full back wages, despite the denial of his
petition for certiorari.

Whether the Honorable Court of Appeals erred in ruling that KKTI did
not comply with the requirements of procedural due process before
dismissing the services of the complainant/private respondent.

Whether the Honorable Court of Appeals rendered an incorrect decision

in that [sic] it awarded in favor of the complaint/private respondent,
13th month pay benefits contrary to PD 851.[11]

The Courts Ruling

The petition is partly meritorious.

The disposition of the first assigned error depends on whether petitioner KKTI
complied with the due process requirements in terminating respondents
employment; thus, it shall be discussed secondly.

Non-compliance with the Due Process Requirements

Due process under the Labor Code involves two aspects: first, substantivethe
valid and authorized causes of termination of employment under the Labor Code;
and second, proceduralthe manner of dismissal.[12] In the present case, the CA
affirmed the findings of the labor arbiter and the NLRC that the termination of
employment of respondent was based on a just cause. This ruling is not at issue in
this case. The question to be determined is whether the procedural requirements
were complied with.

Art. 277 of the Labor Code provides the manner of termination of

employment, thus:

Art. 277. Miscellaneous Provisions.x x x

(b) Subject to the constitutional right of workers to security of

tenure and their right to be protected against dismissal except for a just
and authorized cause without prejudice to the requirement of notice under
Article 283 of this Code, the employer shall furnish the worker whose
employment is sought to be terminated a written notice containing a
statement of the causes for termination and shall afford the latter ample
opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and
regulations promulgated pursuant to guidelines set by the Department of
Labor and Employment. Any decision taken by the employer shall be
without prejudice to the right of the worker to contest the validity or
legality of his dismissal by filing a complaint with the regional branch of
the National Labor Relations Commission. The burden of proving that the
termination was for a valid or authorized cause shall rest on the employer.

Accordingly, the implementing rule of the aforesaid provision states:

SEC. 2. Standards of due process; requirements of notice.In all

cases of termination of employment, the following standards of due
process shall be substantially observed:

I. For termination of employment based on just causes as defined

in Article 282 of the Code:

(a) A written notice served on the employee specifying

the ground or grounds for termination, and giving said
employee reasonable opportunity within which to explain
his side.

(b) A hearing or conference during which the employee

concerned, with the assistance of counsel if he so desires is
 given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.

(c) A written notice of termination served on the

employee, indicating that upon due consideration of all the
circumstances, grounds have been established to justify his
termination. [13]

In case of termination, the foregoing notices shall be served on the

employees last known address.[14]

To clarify, the following should be considered in terminating the services of

employees:

(1) The first written notice to be served on the employees should contain the
specific causes or grounds for termination against them, and a directive that the
employees are given the opportunity to submit their written explanation within a
reasonable period. Reasonable opportunity under the Omnibus Rules means every
kind of assistance that management must accord to the employees to enable them to
prepare adequately for their defense.[15] This should be construed as a period of at
least five (5) calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or lawyer,
gather data and evidence, and decide on the defenses they will raise against the
complaint. Moreover, in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed narration of the facts
and circumstances that will serve as basis for the charge against the employees. A
general description of the charge will not suffice. Lastly, the notice should
specifically mention which company rules, if any, are violated and/or which among
the grounds under Art. 282 is being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct
a hearing or conference wherein the employees will be given the opportunity to:
(1) explain and clarify their defenses to the charge against them; (2) present evidence
in support of their defenses; and (3) rebut the evidence presented against them by
the management. During the hearing or conference, the employees are given the
chance to defend themselves personally, with the assistance of a representative or
counsel of their choice. Moreover, this conference or hearing could be used by the
parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers

shall serve the employees a written notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been considered;
and (2) grounds have been established to justify the severance of their employment.

In the instant case, KKTI admits that it had failed to provide respondent with
a charge sheet.[16] However, it maintains that it had substantially complied with the
rules, claiming that respondent would not have issued a written explanation had he
not been informed of the charges against him.[17]

We are not convinced.

First, respondent was not issued a written notice charging him of committing
an infraction. The law is clear on the matter. A verbal appraisal of the charges against
an employee does not comply with the first notice requirement. In Pepsi Cola
Bottling Co. v. NLRC,[18] the Court held that consultations or conferences are not a
substitute for the actual observance of notice and hearing. Also, in Loadstar
Shipping Co., Inc. v. Mesano,[19] the Court, sanctioning the employer for
disregarding the due process requirements, held that the employees written
explanation did not excuse the fact that there was a complete absence of the first
notice.

Second, even assuming that petitioner KKTI was able to furnish respondent
an Irregularity Report notifying him of his offense, such would not comply with the
requirements of the law. We observe from the irregularity reports against respondent
for his other offenses that such contained merely a general description of the charges
against him. The reports did not even state a company rule or policy that the
employee had allegedly violated. Likewise, there is no mention of any of the grounds
for termination of employment under Art. 282 of the Labor Code. Thus, KKTIs
standard charge sheet is not sufficient notice to the employee.

Third, no hearing was conducted. Regardless of respondents written

explanation, a hearing was still necessary in order for him to clarify and present
evidence in support of his defense. Moreover, respondent made the letter merely to
explain the circumstances relating to the irregularity in his October 28,
2001 Conductors Trip Report. He was unaware that a dismissal proceeding was
already being effected. Thus, he was surprised to receive the November 26,
2001 termination letter indicating as grounds, not only his October 28,
2001 infraction, but also his previous infractions.

Sanction for Non-compliance with Due Process Requirements

As stated earlier, after a finding that petitioners failed to comply with the due
process requirements, the CA awarded full backwages in favor of respondent in
accordance with the doctrine in Serrano v. NLRC.[20] However, the doctrine
in Serrano had already been abandoned in Agabon v. NLRC by ruling that if the
dismissal is done without due process, the employer should indemnify the employee
with nominal damages.[21]

Thus, for non-compliance with the due process requirements in the

termination of respondents employment, petitioner KKTI is sanctioned to pay
respondent the amount of thirty thousand pesos (PhP 30,000) as damages.

Thirteenth (13th)-Month Pay

Section 3 of the Rules Implementing Presidential Decree No. 851[22] provides the
exceptions in the coverage of the payment of the 13th-month benefit. The provision
states:

SEC. 3. Employers covered.The Decree shall apply to all employers

except to:

xxxx

e) Employers of those who are paid on purely commission, boundary, or

task basis, and those who are paid a fixed amount for performing a specific
work, irrespective of the time consumed in the performance thereof,
except where the workers are paid on piece-rate basis in which case the
employer shall be covered by this issuance insofar as such workers are
concerned.
 Petitioner KKTI maintains that respondent was paid on purely commission
basis; thus, the latter is not entitled to receive the 13th-month pay benefit. However,
applying the ruling in Philippine Agricultural Commercial and Industrial Workers
Union v. NLRC,[23] the CA held that respondent is entitled to the said benefit.
It was erroneous for the CA to apply the case of Philippine Agricultural Commercial
and Industrial Workers Union. Notably in the said case, it was established that the
drivers and conductors praying for 13th- month pay were not paid purely on
commission. Instead, they were receiving a commission in addition to a fixed or
guaranteed wage or salary.Thus, the Court held that bus drivers and conductors who
are paid a fixed or guaranteed minimum wage in case their commission be less than
the statutory minimum, and commissions only in case where they are over and above
the statutory minimum, are entitled to a 13th-month pay equivalent to one-twelfth of
their total earnings during the calendar year.

On the other hand, in his Complaint,[24] respondent admitted that he was paid on
commission only. Moreover, this fact is supported by his pay slips[25] which
indicated the varying amount of commissions he was receiving each trip. Thus, he
was excluded from receiving the 13th-month pay benefit.
WHEREFORE, the petition is PARTLY GRANTED and the September 16, 2004
Decision of the CA is MODIFIED by deleting the award of backwages and 13th-
month pay. Instead, petitioner KKTI is ordered to indemnify respondent the amount
of thirty thousand pesos (PhP 30,000) as nominal damages for failure to comply with
the due process requirements in terminating the employment of respondent.

No costs.
SO ORDERED.

[G.R. NO. 154503 : February 29, 2008]

 UNIWIDE SALES WAREHOUSE CLUB and VIVIAN M.
APDUHAN, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION and AMALIA P. KAWADA, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45

of the Rules of Court filed by Uniwide Sales Warehouse Club
(Uniwide) and Vivian M. Apduhan (Apduhan) seeking to annul the
Decision1 dated November 23, 2001 and the Resolution2 dated July
23, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 64581.

The facts of the case:

Amalia P. Kawada (private respondent) started her employment

with Uniwide sometime in 1981 as a saleslady. Over the years,
private respondent worked herself within Uniwide's corporate ladder
until she attained the rank of Full Assistant Store Manager with a
monthly compensation of P13,000.00 in 1995.

As a Full Assistant Store Manager, private respondent's primary

function was to manage and oversee the operation of the Fashion
and Personal Care, GSR Toys, and Home Furnishing Departments of
Uniwide, to ensure its continuous profitability as well as to see to it
that the established company policies and procedures were properly
complied with and implemented in her departments.3

Sometime in 1998, Uniwide received reports from the other

employees regarding some problems in the departments managed
by the private respondent.4 Thus, on March 15, 1998, Uniwide,
through Store Manager Apduhan, issued a Memorandum addressed
to the private respondent summarizing the various reported
incidents signifying unsatisfactory performance on the latter's part
which include the commingling of good and damaged items, sale of
a voluminous quantity of damaged toys and ready-to-wear items at
unreasonable prices, and failure to submit inventory reports.
Uniwide asked private respondent for concrete plans on how she
can effectively perform her job.5 In a letter6 dated March 23, 1998,
private respondent answered all the allegations contained in the
March 15, 1998 Memorandum.

Unsatisfied, Apduhan sent another Memorandum7dated March 30,

1998 to private respondent where Apduhan claimed that the
answers given by the private respondent in her March 23, 1998
letter were all hypothetical and did not answer directly the
allegations attributed to her.8 Apduhan elaborated the incidents
contained in the March 15, 1998 Memorandum.

On June 30, 1998, Apduhan sent another Memorandum9 seeking

from the private respondent an explanation regarding the incidents
reported by Uniwide employees and security personnel for alleged
irregularities committed by the private respondent such as allowing
the entry of unauthorized persons inside a restricted area during
non-office hours, falsification of or inducing another employee to
falsify personnel or company records, sleeping and allowing a non-
employee to sleep inside the private office, unauthorized search and
bringing out of company records, purchase of damaged home
furnishing items without the approval from superior, taking
advantage of buying damaged items in large quantity, alteration of
approval slips for the purchase of damaged items and abandonment
of work.10 In a letter11 dated July 9, 1998, private respondent
answered the allegations made against her.

On July 27, 1998, private respondent sought medical help from the
company physician, Dr. Marivelle C. Zambrano (Dr. Zambrano), due
to complaints of dizziness.12 Finding private respondent to be
suffering from hypertension, Dr. Zambrano advised her to take five
days sick leave.13

On July 30, 1998, private respondent was able to obtain from Dr.
Zambrano a certificate of fitness to work,14 which she presented to
Apduhan the following day.15 It turned out that Dr. Zambrano
inadvertently wrote "Menia," the surname of the company nurse, in
the medical certificate instead of private respondent's
surname.16 Thereafter, private respondent claims that Apduhan
shouted at her and prevented her from resuming work because she
was not the person referred to in the medical certificate.17 After
private respondent left Apduhan's office, a certain Evelyn Maigue,
Apduhan's assistant, approached the private respondent to get the
certification so that it may be photocopied. When she refused to
give the certification, private respondent claims that Apduhan once
again shouted at her which caused her hypertension to recur and
eventually caused her to collapse. Private respondent's head hit the
edge of the table before she fell down on the ground for which she
suffered contusions at the back of her head, as evidenced by the
medical certificate18 issued by Dr. George K. C. Cheu of the Chinese
General Hospital & Medical Center.19

On August 1, 1998, private respondent reported the confrontation

between her and Apduhan to the Central Police District.20 Likewise,
private respondent was able to obtain from Dr. Zambrano the
corrected certification21 together with the clarification that the name
"Amalia Menia" written on the July 30, 1998 certification referred to
Amalia Kawada.22

Thereafter, counsel for private respondent sent a letter23 dated

August 1, 1998 to Apduhan stating that the latter's alleged
continued harassment and vexation against private respondent
created a hostile work environment which had become life
threatening, and that they had no alternative but to bring the
matter to the proper forum.24

On August 2, 1998, Apduhan issued a Memorandum,25 received on

the same day by Edgardo Kawada, the husband of private
respondent, advising the latter of a hearing scheduled on August
12, 1998 to be held at the Uniwide Office in Quirino Highway, and
warning her that failure to appear shall constitute as waiver and the
case shall be submitted for decision based on available papers and
evidence.26

On August 3, 1998, private respondent filed a case for illegal

dismissal before the Labor Arbiter (LA).27

Counsel for private respondent sent a letter28dated August 8, 1998

to Apduhan claiming that the August 2, 1998 Memorandum was a
mere afterthought, in an attempt to justify private respondent's
dismissal; and that on August 3, 1998, private respondent had
already filed charges against Uniwide and Apduhan (petitioners).
On August 8, 1998, Apduhan sent a letter addressed to private
respondent, which the latter received on even date, advising private
respondent to report for work, as she had been absent since August
1, 1998; and warning her that upon her failure to do so, she shall
be considered to have abandoned her job.29

On September 1, 1998, Apduhan issued a Memorandum30 stating

that since private respondent was unable to attend the scheduled
August 12, 1998 hearing, the case was evaluated on the basis of
the evidence on record; and enumerating the pieces of evidence of
the irregularities and violations of company rules committed by
private respondent, the latter's defenses and the corresponding
findings by Uniwide. Portions of the Memorandum read:

VIOLATIONS:

1. Allowing entry of Unauthorized person inside a Restricted Area

during non-office hours (night-time)

xxx

FINDINGS:

Towards these evidence, Ms. A. Kawada only raised questions as to

the propriety of the entries on the logbook, but the offense itself
was not even denied categorically by the employee concerned.
Hence, the fact remains that the employee concerned indeed
allowed the entries of Mr. Ed Kawada on different occasions. The
Security personnel when asked why they did not report those
incidents immediately, answered: They hesitated to report them
because they were afraid as the employee concerned is a manager,
whom they thought knows better then them.

*Violation - No. 9 Type C, Code of Discipline*

2. Falsification of or Inducing another employee to falsify personnel

or company records.

xxx
FINDINGS:

In her answer, Ms. A. Kawada again only questioned the propriety

of the entries on the logbook, but there were clear indications that
the violation was indeed committed as shown by the abovestated
pieces of evidence.

The testimonies by the witnesses' are very explicit of what really

transpired, specifically security guard Dennis Venancio, who just
performs his duty of reporting any unusual incident that occurred
within his jurisdiction. The fact that they failed to report it at an
earlier time, in understandable, since they were hesitant, that the
manager might get back at them, or simply because of their respect
for Ms. A. Kawada, as a Manager.

*Violation - No. 8 Type F, Code of Discipline*

3. Sleeping during overnight work last August 17, 1997.

xxx

FINDINGS:

Based on the records and reports submitted, there is no doubt that

the concerned employee committed such an offense. The witnesses
stated their testimonies only in accordance with what they have
seen and witnessed during those stated periods.

*Violation - No. 7 Type D, Code of Discipline*

4. Unauthorized Search, Bringing Out and taking of Company

Records, March 18, 1998 and March 20, 1998.

xxx

FINDINGS:

It is established that 15 approval slips were taken by the employee

concerned, however, only 11 approval slips were surrendered or
returned.
*Violation - No. 1 Type F, Code of Discipline*

5. Purchases of Dented or Sub-standard items of Home Furnishing

without approval from authorized Supervisor, February 3, 1998.

xxx

FINDINGS:

Towards this accusation subject employee countered that she only

asked Ms. Melanie Laag why she was not able to sign said approval
slip but not for the purpose of letting her sign it. By this, it only
means that indeed the said approval slip does not contain the
necessary approval prior to the purchase. This could be related to
the other charge against the subject employee on unauthorized
search and bringing out of company records, for based on the
circumstances there was such a search conducted to look for and
retrieve approval slips of subject employee, as there are really
approval slips of subject employee which does not bear the
necessary approval. The search must have been probably made to
cover up and/or suppress such evidence against her.

6. Altering Approval slips dated January 17, 1998.

a) #1 original quantity - 7 pieces changed to 2 pieces - amount was

altered from Php14.00 to Php10.00.

b) #2 erasures on the number of quantity whether 15, 5 or 7

pieces.

xxx

FINDINGS:

Towards this accusation Ms. A. Kawada submitted no plausible

explanation, indicating that said employee concerned might have
really committed the acts complained of.

Violation of Company Rules on the proper procedure in selling of

dented merchandise.
7. Making Reservations of Dented Items - January to February
1998.

xxx

FINDINGS:

There was no direct explanation submitted by Ms. A. Kawada on

this. Thus, it becomes clear that Ms. Kawada had violated the
company rule on No Reservation.

8. Conduct unbecoming of a manager in cornering and/or bringing

large quantity of damaged items (toys, furniture, RTW, appliances
and Home Furnishing items), causing demoralization among the
store crew and tainting management's image to its personnel.

xxx

FINDINGS:

The report that were submitted by the witnesses proved that Ms.
Kawada made those purchases of dented or sub-standard items that
were under her assigned area, without regard for the rest of the
employees who wanted to buy also, thus, using and taking
advantage of her position, to the detriment of the other employees
and painting a bad image of the company's managers.

9. Abandonment of work or absence for five (5) consecutive days

without prior notice from any authorized company officer or higher
authority.

FINDINGS:

Despite notice for subject employee to report to work or else be

considered as having abandoned her job, it appears that subject
employee continuously failed to report for work without any
explanation.

*Violation - No. 2, Sec. A*

Based on all the foregoing it seems clear and convincing, that you
have indeed committed the violations imputed on you. The
aforementioned violations per se deserves termination as a penalty,
not to mention that they also constitute willful breach of the trust
reposed on you as a manager. Thus, we have no other
alternative but to terminate your service with the Company,
effective September 1, 1998, on the grounds of violations of
Company Rules, Abandonment of Work and loss of trust and
confidence.

You are hereby directed to surrender all other documents and

papers pertaining to your job, which you may have acquired and
have come into your possession as a result of your employment
with the company.

Please be guided. thank you.31(Emphasis supplied) cralawlib rary

On March 9, 1999 the LA32 dismissed the complaint for lack of

merit.33 Private respondent appealed the LA's decision to the
National Labor Relations Commission (NLRC).

In its Decision34 dated December 27, 2000, the NLRC ruled in favor
of private respondent, reversing the LA, to wit:

WHEREFORE, the decision appealed from is hereby REVERSED and

SET ASIDE. Complainant is declared constructively dismissed by
respondents. Respondents Uniwide Sales Warehouse Club and
Vivian Apduhan are jointly and severally ordered to pay complainant
the following sums:

Separation Pay:

November 1981 -July 3, 1998

P13,000.00 x 16.8 yrs. = P218,400.00

Backwages:

July 31, 1998-up to the present

Moral Damages : = P100,000.00

Exemplary DamagesP100,000.00

Attorney's fees computed at ten percent (10%) of the total award.

SO ORDERED.35

According to the NLRC, private respondent was subjected to

inhuman and anti-social treatment oppressive to labor. Private
respondent received successive memoranda from Apduhan accusing
the former of different infractions, some of which offenses
complainant was informed of only a year after the alleged
commission. Further, Apduhan's ill will and motive to edge private
respondent out of her employ was displayed by Apduhan's stubborn
refusal to allow private respondent to continue her work on the
flimsy excuse that the medical certificate did not bear her correct
surname, while Apduhan knew for a fact that the same could not
have referred to another person but to private respondent.36

Also, the NLRC observed that private respondent was not afforded
due process by petitioners because the former was not given an
opportunity to a fair hearing in that the investigation was conducted
after private respondent had been constructively dismissed; and
that there was no point for private respondent to still attend the
investigation set on August 12, 1998 after her constructive
dismissal on July 31, 1998 and after she had already filed her
complaint.

Feeling aggrieved, petitioners appealed the NLRC Decision to the

CA. In the assailed Decision37dated November 23, 2001, the CA
affirmed in toto the NLRC Decision.

Hence, the present petition.38

The sole issue raised before the Court is:

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN

SUSTAINING THE NLRC'S FINDING THAT PRIVATE RESPONDENT
WAS CONSTRUCTIVELY DISMISSED.39
It is a well-settled rule that the jurisdiction of the Supreme Court in
Petitions for Review on Certiorari under Rule 45 of the Rules of
Court is limited to reviewing errors of law, not of fact.40 The Court is
not a trier of facts. In the exercise of its power of review, the
findings of fact of the CA are conclusive and binding and
consequently, it is not the Court's function to analyze or weigh
evidence all over again.41

The foregoing rule, however, is not absolute. The Court, in Dusit

Hotel Nikko v. National Union of Workers in Hotel, Restaurant and
Allied Industries (NUWHRAIN),42 held that the factual findings of the
NLRC as affirmed by the CA, are accorded high respect and finality
unless the factual findings and conclusions of the LA clash with
those of the NLRC and the CA in which case the Court will have to
review the records and the arguments of the parties to resolve the
factual issues and render substantial justice to the parties.43

The present case is clouded by conflict of factual perceptions.

Consequently, the Court is constrained to review the factual findings
of the CA which contravene the findings of facts of the LA.

The Court's Ruling

The petition is meritorious. After a thorough examination of the

conflicting positions of the parties, the Court finds the records bereft
of evidence to substantiate the conclusions of the NLRC and the CA
that private respondent was constructively dismissed from
employment.

Case law defines constructive dismissal as a cessation of work

because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or
diminution in pay or both; or when a clear discrimination,
insensibility, or disdain by an employer becomes unbearable to the
employee.44

The test of constructive dismissal is whether a reasonable person in

the employee's position would have felt compelled to give up his
position under the circumstances.45 It is an act amounting to
dismissal but made to appear as if it were not. In fact, the
employee who is constructively dismissed may be allowed to keep
on coming to work. Constructive dismissal is therefore a dismissal in
disguise. The law recognizes and resolves this situation in favor of
employees in order to protect their rights and interests from the
coercive acts of the employer.46

In the present case, private respondent claims that from the

months of February to June 1998, she had been subjected to
constant harassment, ridicule and inhumane treatment by Apduhan,
with the hope that the latter can get the private respondent to
resign.47 The harassment allegedly came in the form of successive
memoranda which private respondent would receive almost every
week, enumerating a litany of offenses and maligning her reputation
and spreading rumors among the employees that private
respondent shall be dismissed soon.48 The last straw of the imputed
harassment was the July 31, 1998 incident wherein private
respondent's life was put in danger when she lost consciousness due
to hypertension as a result of Apduhan's alleged hostility and
shouting.49

The Court finds that private respondent's allegation of harassment

is a specious statement which contains nothing but empty
imputation of a fact that could hardly be given any evidentiary
weight by this Court.50 Private respondent's bare allegations of
constructive dismissal, when uncorroborated by the evidence on
record, cannot be given credence.51

The sending of several memoranda addressed to a managerial or

supervisory employee concerning various violations of company
rules and regulations, committed on different occasions, are not
unusual. The alleged February to June 1998 series of memoranda
given by petitioners to private respondent asking the latter to
explain the alleged irregular acts should not be construed as a form
of harassment but merely an exercise of management's prerogative
to discipline its employees.

The right to impose disciplinary sanctions upon an employee for just

and valid cause, as well as the authority to determine the existence
of said cause in accordance with the norms of due process, pertains
in the first place to the employer.52Precisely, petitioners gave
private respondent successive memoranda so as to give the latter
an opportunity to controvert the charges against her. Clearly, the
memoranda are not forms of harassment, but petitioners'
compliance with the requirements of due process.

The July 31, 1998 confrontation where Apduhan allegedly shouted

at private respondent which caused the latter's hypertension to
recur and eventually caused her to collapse cannot by itself support
a finding of constructive dismissal by the NLRC and the CA. Even if
true, the act of Apduhan in shouting at private respondent was an
isolated outburst on the part of Apduhan that did not show a clear
discrimination or insensibility that would render the working
condition of private respondent unbearable.

Moreover, the finding of the NLRC that Apduhan knew for a fact that
the certification presented by private respondent referred to the
latter and not to another person is a mere conjecture. There is no
evidence to sustain the same. This Court has consistently held that
litigations cannot be properly resolved by suppositions, deductions,
or even presumptions, with no basis in evidence, for the truth must
have to be determined by the hard rules of admissibility and
proof.53

Self-serving and unsubstantiated declarations are insufficient to

establish a case before quasi-judicial bodies. Well-entrenched is the
rule that the quantum of evidence required to establish a fact in
quasi-judicial bodies is substantial evidence. Substantial evidence is
such amount of relevant evidence which a reasonable mind might
accept as adequate to support a conclusion, even if other equally
reasonable minds might opine otherwise.54

On petitioners' claim of abandonment by private respondent, well-

settled is the rule that to constitute abandonment of work, two
elements must concur: (1) the employee must have failed to report
for work or must have been absent without valid or justifiable
reason, and (2) there must have been a clear intention on the part
of the employee to sever the employer-employee relationship
manifested by some overt act. The employer has the burden of
proof to show the employee's deliberate and unjustified refusal to
resume his employment without any intention of returning. Mere
absence is not sufficient. There must be an unequivocal intent on
the part of the employee to discontinue his employment.55

Private respondent's failure to report for work despite the August 8,

1998 letter sent by Apduhan to private respondent advising the
latter to report for work is not sufficient to constitute abandonment.
It is a settled rule that failure to report for work after a notice to
return to work has been served does not necessarily constitute
abandonment.56

Private respondent mistakenly believed that the successive

memoranda sent to her from March 1998 to June 1998 constituted
discrimination, insensibility or disdain which was tantamount to
constructive dismissal. Thus, private respondent filed a case for
constructive dismissal against petitioners and consequently stopped
reporting for work.

In the case of Lemery Savings & Loan Bank v. National Labor

Relations Commission,57 the Court held:

It is true that the Constitution has placed a high regard for the
welfare of the labor sector. However, social and compassionate
justice does not contemplate a situation whereby the management
stands to suffer for certain misconceptions created in the mind of an
employee. x x x

Nevertheless, the mistaken belief on the part of the employee

should not lead to a drastic conclusion that he has chosen to
abandon his work. x x x We cannot readily infer abandonment
even if, sometime during the pendency of this case, he refused to
heed the warning given him by petitioner Dimailig while believing
that he was dismissed through no fault of his.58 (Emphasis
supplied)cralawlibra ry

The Court finds that petitioners were not able to establish that
private respondent deliberately refused to continue her employment
without justifiable reason. To repeat, the Court will not make a
drastic conclusion that private respondent chose to abandon her
work on the basis of her mistaken belief that she had been
constructively dismissed by Uniwide.
Nonetheless, the Court agrees with the findings of the LA that the
termination of private respondent was grounded on the existence of
just cause under Article 282 (c) of the Labor Code59 or willful breach
by the employee of the trust reposed on him by his employer or a
duly authorized representative.60

Private respondent occupies a managerial position. As a managerial

employee, mere existence of a basis for believing that such
employee has breached the trust of his employer would suffice for
his dismissal.61

In Caoile v. National Labor Relations Commission,62 the Court

distinguished the treatment of managerial employees from that of
rank-and-file personnel, insofar as the application of the loss of
trust and confidence is concerned. The Court held:

Thus, with respect to rank-and-file personnel, loss of trust and

confidence as ground for valid dismissal requires proof of
involvement in the alleged events in question, and that mere
uncorroborated assertions and accusations by the employer will not
be sufficient.63 But, as regards a managerial employee, mere
existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his
dismissal. Hence, in the case of managerial employees, proof
beyond reasonable doubt is not required, it being sufficient
that there is some basis for such loss of confidence, such as
when the employer has reasonable ground to believe that
the employee concerned is responsible for the purported
misconduct, and the nature of his participation therein
renders him unworthy of trust and confidence demanded by
his position.64(Emphasis supplied).

In order to give private respondent an opportunity to explain the

several violations of company rules she allegedly committed, private
respondent was given several memoranda, to which she initially
responded. Also, to give private respondent an opportunity to be
heard, defend herself, confront the witnesses against her as well as
to present her own evidence, Apduhan scheduled a hearing on
August 12, 1998, notice of which was sent on August 2, 1998 and
duly received by private respondent's husband on the same
day.65 This fact alone would have indicated to private respondent
that there was no intention on the part of petitioners to effect her
constructive dismissal. However, private respondent opted to file
the complaint for illegal dismissal the next day; and not to attend
the scheduled hearing on August 12, 1998. Thus, petitioners were
justified to decide the case on the basis of the records at hand.66

The irregularities and offenses committed by private respondent,

corroborated by the various pieces of evidence supporting such
charges, i.e.records, reports and testimonies of Uniwide
employees,67 in the mind of the Court, constitute substantial
evidence that private respondent is in fact responsible for the
alleged charges.

To disprove the charges against her, private respondent presented a

letter68 dated July 29, 1998 from a former Uniwide employee, Luisa
Astrologo (Astrologo), stating that the latter was urged by her
manager, a certain Ralph Galang, to testify against private
respondent for improper behavior concerning the "dented product
for which private respondent is abusing her power of reserving and
picking the best product she can afford to dispatch."69 The letter,
however, does not state that the charges Astrologo imputed to
private respondent were false. The letter merely states that
Astrologo "does not see anything wrong about the
matter."70 Moreover, in her Memorandum,71filed with the Court,
private respondent merely cited inconsistencies in the reports
regarding the charges imputed to her without denying the said
allegations.

It is true that private respondent had risen from the ranks, from
being a saleslady in 1981 to a Full Assistant Store Manager in 1995.
She worked for Uniwide for almost 17 years with a clean bill of
record. However, these facts are not sufficient to overcome the
findings of petitioners that the private respondent is guilty of the
charges imputed to her.

Finally, the NLRC and the CA erred in finding that private

respondent was denied due process. Private respondent claims that
she lost the opportunity to be heard when she was constructively
dismissed on July 31, 1998,72 and that it was only after she filed a
complaint for illegal dismissal with the NLRC on August 3,
1998 that petitioners notified the private respondent of the
investigation which will be conducted on August 12, 1998
concerning her alleged offenses. The Memorandum dated August 2,
199873 completely demolishes such claims. It shows on its face that
private respondent received the Memorandum on August 2, 1998, a
day before she filed the complaint for illegal dismissal against
petitioners; and that private respondent was notified that the
hearing was scheduled on August 12, 1998 and explicitly warned
her that her failure to appear thereat shall mean a waiver to be
heard, and the case shall then be submitted for decision based on
available papers and evidence.

In reality, private respondent, as found earlier was not terminated

on July 31, 1998. There was no constructive dismissal. Again, the
successive memoranda presented by private respondent and the
alleged July 31, 1998 shouting incident are not sufficient to
establish her claim of harassment.

However, as to the September 1, 1998 Memorandum where the

private complainant was dismissed for loss of trust and confidence,
the Court finds the notice of the scheduled August 12, 1998 hearing
sufficient compliance with the due process requirement.

The essence of due process is simply an opportunity to be heard, or

as applied to administrative proceedings, a fair and reasonable
opportunity to explain one's side.74 It is not the denial of the right to
be heard but denial of the opportunity to be heard that constitutes
violation of due process of law.75 In the instant case, private
respondent was again notified of the August 12, 1998 hearing
through a letter76 dated August 8, 1998 which was received by
private respondent herself.77 Clearly, private respondent was given
an opportunity to be heard. However, private respondent chose not
to attend the scheduled hearing because of her mistaken belief that
she had already been constructively dismissed.

At this point, the Court agrees with and adopts the findings of the
LA in his Decision:78
We cannot, with due respect, subscribe to complainant's [herein
private respondent] position for it simply lacks evidence and that all
that there is to it is seemingly a general allegation. We examined
the record and as we have done it we find no acts or incidents
constituting complainant's alleged "constructive dismissal". On the
contrary, what is generally existing thereat is that complainant was
dismissed by the respondents [Uniwide and Apduhan] for an array
of violations consisting of, but not limited to the following: allowing
entry of unauthorized personnel inside a company restricted area;
falsification of or inducing another employee to falsify personnel or
company records; sleeping during overnight work; unauthorized
search and bringing out of company records; unauthorized purchase
of damaged items; alteration of approval slips for the purchase of
damaged items; unduly reserving and buying of damaged items;
and abandonment of work.

In fact, as it even appears the "constructive dismissal"

allegedly committed on complainant looks simply an excuse
to avoid and/or evade the investigation and consequences of
the violations imputed against her while employed and/or
acting as respondent's assistant store manager. As shown on
an earlier setting on the investigation of her case, she filed a sick
leave, thus causing the hearing/investigation to be rescheduled.
Again, upon rescheduling, complainant despite notice failed to
appear or did not appear, this time coming up with the excuse that
she had been already "constructively dismissed". This evasive
attitude of her more than enough supports the impression that
complainant could be guilty or is guilty of the charges against her
and believes that she might not be able to defend herself. This is
even bolstered by the information that complainant called on
several of the witnesses against her, simply to influence them and
their testimonies. x x x Thus, viewed the foregoing finding, we
opined that complainant could not have been "constructively
dismissed."79 (Emphasis supplied) cralawlib rary

It should be remembered that the Philippine Constitution, while

inexorably committed towards the protection of the working class
from exploitation and unfair treatment, nevertheless mandates the
policy of social justice so as to strike a balance between an avowed
predilection for labor, on the one hand, and the maintenance of
legal rights of capital, the proverbial hen that lays the golden egg,
on the other. Indeed, we should not be unmindful of the legal norm
that justice is in every case for the deserving, to be dispensed with
in light of established facts, the applicable law, and existing
jurisprudence.80

WHEREFORE, the instant petition is GRANTED. The Decision dated

November 23, 2001 and Resolution dated July 23, 2002 of the Court
of Appeals in CA-G.R. SP No. 64581 together with the Decision
dated December 27, 2000 of the National Labor Relations
Commission are REVERSED and SET ASIDE. The complaint of
private respondent Amalia P. Kawada is DISMISSED.

SO ORDERED.

G.R. No. 180888 September 18, 2009

ROLANDO PLACIDO and EDGARDO CARAGAY, Petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY, INCORPORATED, Respondents.

DECISION

CARPIO MORALES, J.:

Petitioners Rolando Placido (Placido) and Edgardo Caragay (Caragay) had been employed since
January 22, 1981 and June 1, 1983, respectively, both as cable splicers by respondent Philippine
Long Distance Telephone Company, Incorporated (PLDT).

It appears that since August 2000, PLDT had been receiving reports of theft and destruction of its
cables.1 On March 13, 2001, PLDT Duty Inspector Ricardo Mojica (Mojica) and PLDT Security
Guard/Driver Mark Anthony Cruto (Cruto), responding to a report that cables were being stripped
and burned in one of the residences along Alley 2 Street, Project 6, Quezon City, proceeded to the
said area where they saw petitioners’ service vehicle parked infront of the house at No. 162. They
likewise saw petitioners stripping and burning cables inside the compound of the house which turned
out to belong to Caragay’s mother. With the assistance of police and barangay officials, PLDT
recovered the cables bearing the "PLDT" marking.
The incident spawned the filing, on complaint of PLDT, of an Information for Qualified Theft against
petitioners before the Regional Trial Court (RTC) of Quezon City, docketed as Criminal Case No.
99467.

In a related move, PLDT required petitioners to explain within 72 hours why no severe disciplinary
action should be taken against them for Serious Misconduct and Dishonesty.2 After several requests
for extension to submit their explanations, petitioners submitted a joint explanation3 on June 11,
2001 denying the charges against them. By their claim, they were on their way back from the house
of one Jabenz Quezada (Quezada) from whom they were inquiring about a vehicle when they were
detained by Mojica.

On petitioners’ request, a formal hearing was scheduled. Their request for a copy of the Security
Investigation was denied, however, on the ground that they are only entitled to "be informed of the
charges, and they cannot demand for the report as it is still on the confidential stage."

During the June 25, 2001 formal hearing scheduled by PLDT, representatives from petitioners’ union
Manggagawa ng Komunikasyon sa Pilipinas (MKP) were present. As petitioners’ counsel could not
attend the hearing due to a previously scheduled hearing at the RTC Makati, petitioners requested
for another setting4 but it was denied. Petitioners were, however, given a non-extendible period of
three days to submit their evidence.5

Mojica testified during the hearing that when petitioners saw him as they were stripping and burning
the cables, they fled but surfaced thirty minutes later from Alley 6 Street wearing different clothes;
and that according to Rodolfo R. Anor, PLDT Work Order Supervisor, the cables could be dead
cables that were not recovered by contractors.6

Petitioners’ counsel later reiterated the request for a setting of a hearing and an audiotape of the
June 25, 2001 hearing, but the same was denied. A third time request for another hearing was
likewise denied.7

On May 17, 2002, PLDT sent notices of termination8 to petitioners, prompting them to file on May 24,
2002 a complaint9 for illegal dismissal before the Labor Arbiter.

By Decision of January 12, 2004, Labor Arbiter Catalino R. Laderas held that petitioners were
illegally dismissed, there being no provision in PLDT’s rules and regulations that stripping and
burning of PLDT cables and wires constitute Serious Misconduct and Dishonesty; that PLDT’s
seeming lack of urgency in taking any disciplinary action against petitioners negates the
charges;10 and that dismissal is too harsh, given petitioners’ years of service and lack of previous
derogatory record.

On appeal,11 the National Labor Relations Commission (NLRC), by Decision dated February 28,
2005, reversed the Labor Arbiter’s Decision and dismissed petitioners’ complaint for lack of merit,12 it
holding that they were validly dismissed for just cause ─ "theft of company property."13

In brushing aside petitioners’ disclaimer of the acts attributed to them, the NLRC noted that, inter
alia, they failed to present any affidavit of Quezada to prove that they were indeed at his house
inquiring about a vehicle.

Petitioners appealed to the Court of Appeals.

In the meantime or on February 15, 2007, Branch 104 of the Quezon City RTC acquitted petitioners
in Criminal Case No. 99467 on the ground of reasonable doubt, it holding that the prosecution failed
to prove that the cables were in fact stolen from PLDT.14

By Decision of September 28, 2007, the appellate court affirmed the NLRC Decision,15 it holding that
since the cables bore the "PLDT" marking, they were presumed to be owned by PLDT, hence, the
burden of evidence shifted on petitioners to prove that they were no longer owned by PLDT, but they
failed.

Ruling out petitioners’ claim that they were denied due process, the appellate court held that they
were given ample opportunity to defend themselves during the administrative hearing during which
they were furnished with written invitations for their appearance before the investigating unit on
several dates, but they refused to submit themselves to the investigation. Petitioners’ motion for
reconsideration having been denied by Resolution16 of December 17, 2007, the present petition was
filed.17

Petitioners insist that the presence of the "PLDT" marking on the cables does not prove that PLDT
owned them at the time. They aver that PLDT disposes of used and unserviceable materials,
including cables and telephone wires which had been declared junked and classified as scrap --- a
substantial amount of which remains insulated ---, and once disposed of, these cables, although still
bearing the "PLDT" marking, are no longer its property .

In fine, petitioners contend that PLDT’s ownership of cables or wires bearing the "PLDT" marking on
the insulation cannot be presumed, hence, a person’s possession thereof does not give rise to the
presumption that he obtained or stole them from PLDT.18

Additionally, petitioners aver that they were denied due process when PLDT refused to furnish them
a copy of the Investigation Report and grant them a formal hearing in which they could be
represented by counsel of their choice.

The petition is bereft of merit.

As did the NLRC and the Court of Appeals,19 the Court finds that as the cables bore the "PLDT"
marking, the presumption is that PLDT owned them. The burden of evidence thus lay on petitioners
to prove that they acquired the cables lawfully. This they failed to discharge.

And as also did the NLRC and the Court of Appeals, the Court finds that petitioners were not denied
due process.

Article 277 of the Labor Code provides:

xxxx

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just or authorized cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer shall furnish the workers whose employment is
sought to be terminated a written notice containing a statement of the causes for termination and
shall afford the latter ample opportunity to be heard and defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations promulgated
pursuant to the guidelines set by the Department of Labor and Employment. Any decision taken by
the employer shall be without prejudice to the right of the worker to contest the validity or legality of
his dismissal by filing a complaint with the regional branch of the National Labor Relations
Commission. The burden of proving that the termination was for a valid or authorized cause shall
rest on the employer. (Emphasis supplied)

And the Omnibus Rules Implementing the Labor Code require a hearing and conference during
which the employee concerned is given the opportunity to respond to the charge, and present his
evidence or rebut the evidence presented against him. Thus Rule I, Section 2(d), provides:

Section 2. Security of Tenure. —

xxxx

(d) In all cases of termination of employment, the following standards of due process shall be
substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

(i) A written notice served on the employee specifying the ground or grounds for termination,
and giving said employee reasonable opportunity within which to explain his side.

(ii) A hearing or conference during which the employee concerned, with the assistance
of counsel if he so desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him. 1avv phi 1

(iii) A written notice of termination served on the employee, indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination. (Emphasis and underscoring supplied)

The abovequoted provision of Section 2(d) should not be taken to mean, however, that holding an
actual hearing or conference is a condition sine qua non for compliance with the due process
requirement in case of termination of employment. For the test for the fair procedure guaranteed
under the above-quoted Article 277(b) of the Labor Code is not whether there has been a formal
pretermination confrontation between the employer and the employee. The "ample opportunity to be
heard" standard is neither synonymous nor similar to a formal hearing. To confine the employee’s
right to be heard to a solitary form narrows down that right.20

The essence of due process is simply an opportunity to be heard or, as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek a reconsideration of the
action or ruling complained of. What the law prohibits is absolute absence of the opportunity to be
heard, hence, a party cannot feign denial of due process where he had been afforded the
opportunity to present his side. A formal or trial type hearing is not at all times and in all instances
essential to due process, the requirements of which are satisfied where the parties are afforded fair
and reasonable opportunity to explain their side of the controversy.21

In the present case, petitioners were, among other things, given several written invitations to submit
themselves to PLDT’s Investigation Unit to explain their side, but they failed to heed them. A
hearing, which petitioners attended along with their union MKP representatives, was conducted on
June 25, 2001 during which the principal witnesses to the incident were presented. Petitioners were
thus afforded the opportunity to confront those witnesses and present evidence in their behalf, but
they failed to do so.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated September 28,
2007 is AFFIRMED.

SO ORDERED.

G.R. No. 187605 April 13, 2010

TECHNOL EIGHT PHILIPPINES CORPORATION, Petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION AND DENNIS AMULAR, Respondents.

DECISION

BRION, J.:

For resolution is the present Petition for Review on Certiorari1 addressing the decision2 and
resolution3 of the Court of Appeals (CA) of November 18, 2008 and April 17, 2009, respectively, in
CA-G.R. SP No. 100406.4

THE ANTECEDENTS

The facts are summarized below.

The petitioner Technol Eight Philippines Corporation (Technol), located at 127 East Main Avenue,
Laguna Technopark, Biñan, Laguna, manufactures metal parts and motor vehicle components. It
hired the respondent Dennis Amular (Amular) in March 1998 and assigned him to Technol’s
Shearing Line, together with Clarence P. Ducay (Ducay). Rafael Mendoza (Mendoza) was the line’s
team leader.

On April 16, 2002 at about 5:30 p.m., Mendoza went to the Surf City Internet Café in Balibago, Sta.
Rosa, Laguna. As Mendoza was leaving the establishment, he was confronted by Amular and Ducay
who engaged him in a heated argument regarding their work in the shearing line, particularly
Mendoza’s report to Avelino S. De Leon, Jr. (De Leon), Technol’s Production Control and Delivery
(PCD) assistant supervisor, about Amular’s and Ducay’s questionable behavior at work. The heated
argument resulted in a fistfight that required the intervention of the barangay tanods in the area.

Upon learning of the incident, Technol’s management sent to Amular and Ducay a notice of
preventive suspension/notice of discharge dated May 18, 20025 advising them that their fistfight with
Mendoza violated Section 1-k of Technol’s Human Resource Department (HRD) Manual. The two
were given forty-eight (48) hours to explain why no disciplinary action should be taken against them
for the incident. They were placed under preventive suspension for thirty (30) days, from May 19,
2002 to June 17, 2002 for Ducay, and May 21, 2002 to June 20, 2002 for Amular. Amular submitted
a written statement on May 20, 2002.6
Thereafter, Amular received a notice dated June 8, 20027 informing him that Technol management
will conduct an administrative hearing on June 14, 2002. He was also given two (2) days to respond
in writing to the statements attached to and supporting the notice. A day before the hearing or on
June 13, 2002, Amular filed a complaint for illegal suspension/constructive dismissal with a prayer
for separation pay, backwages and several money claims, against Technol. Amular failed to attend
the administrative hearing. On July 4, 2002, Technol sent him a notice of dismissal.8

Before the Labor Arbiter, Amular alleged that in the afternoon of April 16, 2002, while he and his co-
employee Ducay were walking around the shopping mall in Balibago, Sta. Rosa, Laguna, they
"incidentally" saw Mendoza with whom they wanted to discuss some personal matters. When they
approached Mendoza, the latter raised his voice and asked what they wanted from him; Amular
asked Mendoza what the problem was because Mendoza appeared to be always angry at him
(Amular). Mendoza instead challenged Amular and Ducay to a fistfight and then punched Amular
who punched Mendoza in return. Thereafter, a full-blown fistfight ensued until the barangay tanods
in the area pacified the three.

Amular further alleged that he was asked by his immediate supervisor to submit a report on the
incident, which he did on April 18, 2002.9 Subsequently, Amular, Mendoza and Ducay were called by
Technol management to talk to each other and to settle their differences; they agreed and settled
their misunderstanding.

THE COMPULSORY ARBITRATION DECISIONS

On November 18, 2003, Executive Labor Arbiter Salvador V. Reyes rendered a decision10 finding
that Amular’s preventive suspension and subsequent dismissal were illegal. He ruled that Amular’s
preventive suspension was based solely on unsubscribed written statements executed by Mendoza,
Rogelio R. Garces and Mary Ann Palma (subscribed only on August 8, 2002) and that Mendoza,
Amular and Ducay had settled their differences even before Amular was placed under preventive
suspension. With respect to Amular’s dismissal, the Arbiter held that Technol failed to afford him
procedural due process since he was not able to present his side because he had filed a case
before the National Labor Relations Commission (NLRC) at the time he was called to a hearing;
Technol also failed to substantiate its allegations against Amular; the fistfight occurred around 200 to
300 meters away from the work area and it happened after office hours. Arbiter Reyes awarded
Amular separation pay (since he did not want to be reinstated), backwages, 13th month pay, service
incentive leave pay and attorney’s fees in the total amount of ₱158,987.70.

Technol appealed to the NLRC. In its decision promulgated on March 30, 2005,11 the NLRC affirmed
the labor arbiter’s ruling. It found that Amular was unfairly treated and subjected to discrimination
because he was the only one served with the notice to explain and placed under preventive
suspension; his co-employee Ducay who was also involved in the incident was not. Technol moved
for reconsideration, but the NLRC denied the motion in a resolution rendered on May 30,
2007.12 Technol thereafter sought relief from the CA through a petition for certiorari under Rule 65 of
the Rules of Court.13

THE CA DECISION

In its decision promulgated on November 18, 2008, the CA found no grave abuse of discretion on
the part of the NLRC when it affirmed the labor arbiter’s ruling that Amular was illegally dismissed.
While the appellate court noted that Amular was dismissed on the ground of serious misconduct, a
just cause for employee dismissal under the Labor Code,14 it opined that Technol failed to comply
with the jurisprudential guidelines that misconduct warranting a dismissal: (1) must be serious; (2)
must relate to the performance of the employees duties; and (3) must show that the employee has
become unfit to continue working for the employer.15

The appellate court pointed out that the mauling incident occurred outside the company premises
and after office hours; it did not in any manner disrupt company operations nor pose a threat to the
safety or peace of mind of Technol workers; neither did it cause substantial prejudice to the
company. It explained that although it was not condoning Amular’s misconduct, it found that "the
penalty of dismissal imposed by Technol on Amular was too harsh and evidently disproportionate to
the act committed."16 The CA denied the motion for reconsideration Technol subsequently
filed;17 hence, the present petition.18

THE PETITION

Technol posits that the CA gravely erred in ruling that Amular was illegally dismissed, contending
that Amular was discharged for violation of Section 1-k of its HRD Manual which penalizes the
commission of a crime against a co-employee. It submits that Section 1-k of the HRD Manual is a
reasonable company rule issued pursuant to its management prerogative. It maintains that the case
should have been examined from the perspective of whether the company rule is reasonable and
not on the basis of where and when the act was committed, or even whether it caused damage to
the company. It adds that the manual does not distinguish whether the crime was committed inside
or outside work premises or during or after office hours. It insists that if the rule were otherwise, any
employee who wishes to harm a co-employee can just wait until the co-employee is outside the
company premises to inflict harm upon him, and later argue that the crime was committed outside
work premises and after office hours. It submits that the matter assumes special and utmost
significance in this case because Amular inflicted physical injuries on a supervisor. In any event,
Technol argues that even if the misconduct was committed outside company premises, the
perpetrator can still be disciplined as long as the offense was work-related, citing Oania v.
NLRC19and Tanala v. NLRC20 in support of its position.

Technol bewails the CA’s appreciation of the implication of Amular’s misconduct in the workplace,
especially the court’s observation that it did not cause damage to the company because it did not
disrupt company operation, that it did not create a hostile environment inside the company, and that
the fight was "nipped in the bud by the timely intervention of those who saw the incident."21 Technol
insists that it had to order Amular’s dismissal in order to uphold the integrity of the company rules
and to avoid the erosion of discipline among its employees. Also, it disputes the CA’s conclusion that
the fact that Amular’s liability should be mitigated because the fight "was nipped in the bud." It
submits that Mendoza had already sustained grave injuries when the mauling was stopped.

Further, Technol maintains that the CA gravely erred in going beyond the issues submitted to it,
since the NLRC decision only declared Amular’s dismissal illegal on the ground that he was the only
one subjected to disciplinary action and that the company merely relied on the written statements of
Amular’s co-employees.

On the rejection by the CA of the statements of Amular’s co-employees regarding the incident,
Technol contends that the statements of the witnesses, together with Amular’s admission, constitute
substantial evidence of guilt. It points out that the statement of Mendoza on the matter submitted
during the company investigation and before the labor arbiter was not a "stand alone" statement;
Mendoza’s statement was corroborated by the statements of Rogelio R. Garces and Mary Ann
Palma, verified under oath in the reply22 it submitted to the arbiter. The statements were all in their
handwriting, indicating that they were not pro forma or prepared on command; a medical
certificate23 and a barangay report24 were likewise submitted.
Technol likewise disputes the NLRC’s conclusion that Amular was discriminated against and unfairly
treated because he was the only one preventively suspended after the mauling incident. It maintains
that from the records of the case and as admitted by Amular himself in his position paper,25 his co-
employee Ducay was also preventively suspended.26 That Mendoza was not similarly placed under
preventive suspension was considered by Technol as an exercise of its management prerogative,
since the circumstances surrounding the incident indicated the existence of a reasonable threat to
the safety of Amular’s co-employees and that Mendoza appeared to be the victim of Amular’s and
Ducay’s assault.

THE CASE FOR AMULAR

In his Comment filed on August 12, 2009,27 Amular asks that the petition be dismissed for "utter lack
of merit." He admits that the mauling incident happened, but claims however that on April 18, 2002,
the Technol’s management called Mendoza, Ducay, and him to a meeting, asked them to explain
their sides and thereafter requested them to settle their differences; without hesitation, they agreed
to settle and even shook hands afterwards. He was therefore surprised that on May 18, 2002, he
received a memorandum from Technol’s HRD charging him and his co-employee Ducay for the
incident. Without waiting for an explanation, Technol’s management placed him under preventive
suspension, but not Ducay. Adding insult to injury, when Amular followed up his case while on
preventive suspension, he was advised by the HRD manager to simply resign and accept
management’s offer of ₱22,000.00, which offer was reiterated during the mandatory conference
before the labor arbiter.

Amular particularly laments that his employment was terminated while the constructive dismissal
case he filed against the company was still pending. He posits that his employment was terminated
first before he was informed of the accusations leveled against him – an indication of bad faith on the
part of Technol.

Amular asks: if it were true that the mauling incident was a serious offense under company policy,
why did it take Technol a month to give him notice to explain the mauling incident? He submits that
the memorandum asking him to explain was a mere afterthought; he was dismissed without giving
him the benefit to be informed of the true nature of his offense, thus denying him his right to be
heard.

Finally, Amular questions the propriety of the present petition contending that it only raises questions
of fact, in contravention of the rule that only questions of law may be raised in a petition for review on
certiorari.28 He points out that the findings of facts of the labor tribunals and the CA are all the same
and therefore must be given respect, if not finality.29

THE RULING OF THE COURT

The Procedural Issue

We find no procedural impediment to the petition. An objective reading of the petition reveals that
Technol largely assails the correctness of the conclusions drawn by the CA from the set of facts it
considered. The question therefore is one of law and not of fact, as we ruled in Cucueco v. Court of
Appeals.30 Thus, while there is no dispute that a fight occurred between Amular and Ducay, on the
one hand, and Mendoza, on the other, the CA concluded that although Amular committed a
misconduct, it failed to satisfy jurisprudential standards to qualify as a just cause for dismissal – the
conclusion that Technol now challenges. We see no legal problem, too, in wading into the factual
records, as the tribunals below clearly failed to properly consider the evidence on record. This is
grave abuse of discretion on the part of the labor tribunals that the CA failed to appreciate.
The Merits of the Case

The CA misappreciated the true nature of Amular’s involvement in the mauling incident. Although it
acknowledged that Amular committed a misconduct, it did not consider the misconduct as work-
related and reflective of Amular’s unfitness to continue working for Technol. The appellate court’s
benign treatment of Amular’s offense was based largely on its observation that the incident
happened outside the company premises and after working hours; did not cause a disruption of work
operations; and did not result in a hostile environment in the company. Significantly, it did not
condone Amular’s infraction, but it considered that Amular’s dismissal was a harsh penalty that is
disproportionate with his offense. It found support for this liberal view from the pronouncement of the
Court in Almira v. B.F. Goodrich Philippines, Inc.,31 that "where a penalty less punitive would suffice,
whatever missteps may be committed by labor ought not to be visited with a consequence so
severe."

The record of the case, however, gives us a different picture. Contrary to the CA’s perception, we
find a work-connection in Amular's and Ducay’s assault on Mendoza. As the CA itself noted,32 the
underlying reason why Amular and Ducay confronted Mendoza was to question him about his report
to De Leon – Technol’s PCD assistant supervisor – regarding the duo’s questionable work behavior.
The motivation behind the confrontation, as we see it, was rooted on workplace dynamics as
Mendoza, Amular and Ducay interacted with one another in the performance of their duties.

The incident revealed a disturbing strain in Amular's and Ducay’s characters – the urge to get even
for a perceived wrong done to them and, judging from the circumstances, regardless of the place
and time. The incident could very well have happened inside company premises had the two
employees found time to confront Mendoza in the workplace as they intimated in their written
statements.33 Having been the subject of a negative report regarding his work must have rankled on
Amular that he resolved to do something about it; thus, he confronted Mendoza.

From the records, Ducay appeared to have cooperated with Amular in the violent confrontation with
Mendoza. Ducay, however, resigned on June 7, 2002 a week before the filing of the
complaint.34 Hence, Technol did not act against him – a move that is within its prerogative to make. 1avvphi1

In an obvious effort to mitigate his involvement in the mauling incident, Amular claimed in the
administrative proceedings that while he and Ducay were walking around the shopping mall in
Balibago, Sta. Rosa, Laguna, they "incidentally" saw their co-employee Mendoza "with whom they
wanted to clear some personal matters."35 We find this claim a clear distortion of what actually
happened. Again, based on their written statements,36 Amular and Ducay purposely set out for the
Balibago commercial area on April 16, 2002 looking for Mendoza. It was not an incidental or casual
encounter. They sought Mendoza out and confronted him regarding what they perceived as
Mendoza’s negative attitude towards them or "pamamarako" as Mendoza described it.37 Considering
the subject Amular and Ducay raised with Mendoza, it is not surprising that they had a heated verbal
exchange (mostly between Amular and Mendoza) that deteriorated into a fistcuff fight, with Mendoza
at the losing end as he suffered injuries from the blows he received.

Amular and Ducay point to Mendoza as the proximate cause of the fight because he challenged
them to a one-on-one (isa-isa lang) bout.38 Looking back at the reason why Amular and Ducay were
at the mall in the first place, this attributed causation hardly makes sense. To reiterate, they were
purposely there to confront Mendoza about their work-related problem. They waited for him at the
place where they expected him to be. When Mendoza appeared, they accosted him and put into
motion the entire sorry incident.
Under these circumstances, Amular undoubtedly committed a misconduct or exhibited improper
behavior that constituted a valid cause for his dismissal under the law39 and jurisprudential
standards.40 The circumstances of his misdeed, to our mind, rendered him unfit to continue working
for Technol; guilt is not diminished by his claim that Technol’s management called the three of them
to a meeting, and asked them to explain their sides and settle their differences, which they
did.41 Mendoza significantly denied the alleged settlement, maintaining that while they were
summoned by De Leon after the incident, he could not shake hands and settle with Amular and
Ducay since they did not even apologize or ask forgiveness for what they did.42 We do not find
Mendoza’s denial of Amular’s claim unusual as Mendoza would not have stood his ground in this
case if a settlement had previously been reached. That a meeting had taken place does not appear
disputed, but a settlement cannot be inferred simply because a meeting took place.

Neither do we believe that Amular was discriminated against because he was not the only one
preventively suspended. As the CA itself acknowledged, Ducay received his notice of preventive
suspension/notice of charge43on May 19, 2002 while Amular received his on May 21, 2002. These
notices informed them that they were being preventively suspended for 30 days from May 19, 2002
to June 17, 2002 for Ducay, and May 21, 2002 for Amular.44

Thus, Amular was not illegally dismissed; he was dismissed for cause.

The Due Process Issue

The labor arbiter ruled that Technol failed to afford Amular procedural due process, since he was not
able to present his side regarding the incident; at the time he was called to a hearing, he had already
filed the illegal dismissal complaint.45 The NLRC, on the other hand, held that the memorandum
terminating Amular’s employment was a mere formality, an afterthought designed to evade company
liability since Amular had already filed an illegal dismissal case against Technol.46

We disagree with these conclusions. The notice of preventive suspension/notice of discharge served
on Amular and Ducay required them to explain within forty-eight (48) hours why no disciplinary
action should be taken against them for their involvement in the mauling incident.47 Amular submitted
two written statements: the first received by the company on May 19, 200248 and the other received
on May 20, 2002.49 On June 8, 2002, Technol management sent Amular a memorandum informing
him of an administrative hearing on June 14, 2002 at 10:00 a.m., regarding the charges against
him.50 At the bottom left hand corner of the memorandum, the following notation appears: "accept the
copy of notice but refused to receive, he will study first." A day before the administrative hearing or
on June 13, 2002, Amular filed the complaint for illegal suspension/dismissal51 and did not appear at
the administrative hearing. On July 4, 2002, the company sent Amular a notice of dismissal.52

What we see in the records belie Amular’s claim of denial of procedural due process. He chose not
to present his side at the administrative hearing. In fact, he avoided the investigation into the
charges against him by filing his illegal dismissal complaint ahead of the scheduled investigation.
Under these facts, he was given the opportunity to be heard and he cannot now come to us
protesting that he was denied this opportunity. To belabor a point the Court has repeatedly made in
employee dismissal cases, the essence of due process is simply an opportunity to be heard; it is the
denial of this opportunity that constitutes violation of due process of law.53

In view of all the foregoing, we find the petition meritorious.

WHEREFORE, premises considered, we hereby GRANT the petition. The assailed decision and
resolution of the Court of Appeals are REVERSED and SET ASIDE. The complaint for illegal
dismissal is DISMISSED for lack of merit. Costs against respondent AMULAR.
SO ORDERED.

G.R. NO. 160339 March 14, 2008

OSCAR P. GARCIA and ALEX V. MORALES, Petitioners,

vs.
MALAYAN INSURANCE CO., INC. and NATIONAL LABOR RELATIONS
COMMISSION,* Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court of Oscar P.
Garcia and Alex V. Morales (petitioners), assailing the March 13, 2003 Decision1 of the Court of
Appeals (CA), which

upheld the validity of the termination of their employment; and the October 9, 2003 CA
Resolution2 which denied their motion for reconsideration.

The facts are of record.

Petitioners were employed as risk inspectors by Malayan Insurance Company, Inc. (private
respondent). They were also officers of the Malayan Employees Association-FFW (MEA-FFW).

On December 29, 1999, private respondent issued to petitioner Garcia an Inter-Office

Memorandum3 giving him 24 hours to explain his involvement in the theft of company property,
consisting of diskettes, logbooks and other documents of the Risk Analysis Section, and to return the
same. Private respondent also issued to petitioner Morales a similar memorandum but with
additional instruction for his preventive suspension for 30 days pending investigation.4

In their separate written explanations, petitioners denied their involvement in the theft and countered
that the filing of the charges against them was a form of harassment against their union MEA-FFW,
which was in a deadlock with respondent in the ongoing negotiations over the terms of their
collective bargaining agreement.5

After the conduct of an informal administrative hearing,6 private respondent notified petitioner Garcia,
through a letter dated February 28, 2000, of the termination of his employment, thus:

After a painstaking evaluation of the pieces of documentary and testimonial evidence presented, the
Investigating Committee concluded that there is reason to believe that you participated in the theft of
the subject Company properties when you:

1) Took possession of the subject diskettes and logbooks without any permission from the
company;
 2) Instigated the commission of the said unlawful act; and

3) Refused to deliver said Company properties upon demand by Management.

The above acts constitute serious misconduct and a violation of the Company’s Code of Ethics
which, under Article 282 of the Labor Code, as amended, justify your dismissal from the Company.
In view thereof, we regret to inform you that you are considered dismissed from your employment
effective immediately.7

Petitioner Morales was also served a similar notice of termination but on the following grounds:

After a painstaking evaluation of the pieces of documentary and testimonial evidence presented, the
Investigating Committee concluded that there is reason to believe that you participated in the theft of
the subject Company properties when you:

1) Conspired with Mr. Garcia in attempting to cover-up the loss of the subject diskettes and
logbook; and

2) Deliberately withheld information from the Company regarding the whereabouts of said
Company properties .

A review of your 201 File likewise revealed that you have been previously suspended for tampering
receipts which you presented for reimbursement by the Company. You will therefore realize that
when it comes to dishonesty, you are not a first offender.

The above recent acts constitute serious misconduct and violation of the Company’s Code of Ethics
which, under Article 282 of the Labor Code, as amended, justify your dismissal from the Company.
In view thereof, we regret to inform you that you are considered dismissed from your employment
effective immediately.8

Petitioners filed before the Labor Arbiter (LA) a Complaint for illegal dismissal, illegal suspension,
unfair labor practice, damages and attorney’s fees.9 The LA dismissed their Complaint in a
Decision10

dated November 20, 2000.

Petitioners appealed to the National Labor Relations Commission (NLRC), which issued a
Resolution11 dated November 29, 2001, affirming the November 20, 2000 LA Decision. The NLRC
also denied petitioners’ Motion for Reconsideration in a Resolution12 dated February 28, 2002.

Petitioners filed a Petition for Certiorari with the CA, which dismissed it in the March 13, 2003
Decision13 assailed herein. Petitioners’ Motion for Reconsideration was also denied by the CA in its
October 9, 2003 Resolution.

Hence, the present petition, which raises the following issues:

The Honorable public respondent court seriously erred and committed grave abuse of
discretion, amounting to lack and/or excess of jurisdiction, in denying the petition for
certiorari a quo and, in effect, affirming the assailed resolutions of public respondent NLRC,
 dismissing the complaint for unfair labor practice, illegal suspension, illegal dismissal,
damages and attorney's fees x x x.

II

While the public respondent court is totally correct in declaring that "factual findings of the
NLRC, particularly when it coincide with those of the Labor Arbiter, are accorded respect,
even finality," it erred, however in applying said doctrinal ruling in the instant case, x x x.

III

The public respondent court seriously erred in not finding that the public respondent NLRC
and the Labor Arbiter a quo seriously erred and committed grave abuse of discretion in
rendering the assailed resolution, as clearly private respondent company acted with bad faith
in terminating the services of herein petitioners.

IV

The public respondent court committed grave abuse of discretion amounting to lack and/or
excess of jurisdiction in denying petitioners' motion for reconsideration without resolving the
legal issues raised.14

Resolution of the foregoing issues entails an inquiry into the facts, a re-evaluation of the credibility of
the witnesses and a recalibration of the evidence presented. Ordinarily, the Court does not
undertake these functions, for it defers to the expertise of the CA, NLRC and LA, and accords great
weight to their factual findings, especially when these are unanimous. Thus, only their errors of law
are reviewable by the Court in a petition for review on certiorari under Rule 45.

However, under extraordinary circumstances, the Court delves into the factual assessment of the
forums below when it is shown that (1) the findings are not supported by evidence; (2) when the
inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of
fact are conflicting; (6) when in making its findings, the CA went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings
are contrary to the trial court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition as well as in the
petitioner's reply briefs are not disputed by the respondent; and (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the evidence on record.15

To determine whether any of these extraordinary circumstances obtains in the present case, a
preliminary assessment of the evidence upon which the CA, NLRC and LA based their factual
findings cannot be avoided.

The LA declared the dismissal of petitioners valid in view of substantial evidence that petitioner
Garcia was involved in the theft of private respondent's confidential records and that petitioner
Morales participated in the cover-up thereof:

In the case at bar, this Office finds that there is substantial evidence to justify the dismissal of
[petitioners]. The testimonies of [Jovita] Umila, [Philip] de Guzman and [Romeo] Corral are such
"relevant evidence as a reasonable mind might accept as adequate to justify (the) conclusion" that
[petitioners] are guilty of serious misconduct which is duly recognized under the law as valid cause
for the dismissal of an employee. Their statements explain the questioned incident in its entirety from
the inception of wrongdoing (Umila), to the denial of knowledge of the whereabouts of the subject
lost records (Corral), to the subsequent admission of possession of the missing diskettes and
logbooks (Umila), up to the attempt to cover-up their misconduct (De Guzman). [Petitioners] failed to
adduce any evidence that would taint the credibility of said witnesses. It goes against the usual grain
of logic and normal human conduct for a witness to testify against a co-Union member or co-
employee, absent any clear evil or ill-motive on his/her part, thus demonstrating that said witness is
moved only by the desire to tell the truth and clear his conscience. There being nothing to indicate
that the witnesses were moved by dubious or improper motives to testify falsely, their testimonies
should be accorded full faith and credit.

Tellingly, [petitioner] Garcia never denied, much less refuted, Umila's positive testimony that he
(Garcia) admitted that he has in his possession the missing diskettes and logbooks. The same holds
true as regards [petitioner] Morales who likewise never denied, much less refuted, De Guzman's first
person testimony of his (Morales') complicity in the cover-up of the wrongdoing of [petitioner]
Garcia.16

The NLRC sustained the findings of the LA. It held that the LA correctly relied on the affidavits of
Umila and De Guzman whose detailed account of how petitioners committed serious misconduct
was never refuted

by the latter.17 The NLRC found these witnesses credible because they were not shown to hold any
"grudge against [petitioners], much more because said witnesses are ordinary members of the union
while those being charged are union officers, hence, with moral ascendancy over them."18

While the CA did not elaborate on its view, it bound itself by the concurrent factual findings of the LA
and NLRC for it found them to be supported by evidence.19

Impugning the stand of the CA, petitioners argue that the affidavits of Umila and De Guzman have
no probative value for neither had direct knowledge of the taking of private respondent's properties:
first, Umila merely stated that on December 24, 1998, petitioner Garcia and another employee, Jun
Bato, asked about these properties and that she told them that said properties were on top of her
office table; and second, De Guzman merely described how these properties were recovered.20

Perusal of the affidavits in question does not bear out petitioners' claim. Umila also stated that when
she confronted petitioner Garcia about the lost properties, the latter admitted having them in his
possession.21 De Guzman's statement detailed the effort to bring said properties back into the
premises of private respondent and to make it appear that these were merely misplaced.22 Thus,
without going into the veracity of the statements in said affidavits, the Court cannot agree that no
direct evidence was presented on the theft of the properties or the cover-up thereof.

However, it is noted that while the participation of petitioner Garcia in said theft and cover-up is
detailed in said affidavit, the same cannot be said of the connection of Morales to said incidents. To
recall, petitioner Morales was dismissed for conspiring in the cover-up of the theft. However, it
appears that the only evidence of petitioner Morales's involvement in the cover-up is the statement
of De Guzman that it was said petitioner who instructed him to get a parcel from a third person. The
statement of De Guzman on this particular matter is reproduced below:

3. Noon Disyembre 29, 1999 bandang alas-kuwatro kuwarenta y singko ng hapon (4:45 p.m.), ako
ay kasalukuyang naghuhugas ng mga plato sa Comfort Room ng 5th floor ng ETY Building nang ako
ay lapitan ni Alex Morales ng Risk Analysis Department at inutusang pumunta sa Farmacia Rubi,
dito rin sa Quintin Paredes, Binondo para kunin ang isang bagay sa lalaking may bigote.23
By no means can it be extrapolated from the foregoing statement that petitioner Morales knew the
contents of the parcel - whether or not these were the stolen company properties - or the purpose for
getting the parcel from a third party. In fact, the succeeding paragraphs in the statement disclose
that it was that third party who instructed De Guzman to call petitioner Garcia, who, in turn, disclosed
the nature of the contents of the parcel and gave out instruction on what steps to take to bring said
parcel back into the office building and to make it appear that it was just misplaced. Nowhere does it
appear that petitioner Morales had knowledge of what was to happen or had participation in it. It is
difficult then to connect petitioner Morales to the theft or the attempt to cover it up merely on the
basis of his having instructed De Guzman to get a parcel from another person.

Therefore, on the specific culpability of petitioner Morales, the Court finds the affidavit of De Guzman
so lacking in crucial detail that the same cannot serve as basis for the finding that said petitioner
conspired in the theft

of private respondent's properties or the cover up thereof.24 The Court reverses the factual findings
of the CA, NLRC and LA, for the evidence on which their findings were based was too tenuous to
justify the termination of petitioner Morales's employment.

Nonetheless, no bad faith can be attributed to private respondent in dismissing petitioner Morales
despite such scant evidence. Its error in the assessment of the available evidence cannot be
equated with bad faith as there is no evidence that it was animated by malice or ill motive. Hence, its
action in dismissing petitioner Morales may have been illegal, but did not amount to unfair labor
practice.

Moving on to the other issues pertaining to petitioner Garcia, he insists that, contrary to the
observation of the CA, he controverted the affidavits presented by private respondent, not only by
denying the averments therein, but also by presenting counter evidence consisting of an entry in the
guard's logbook and the affidavit of the guard-on-duty, Joey Limbo.25 Petitioner explains that it took
time for him to present these documents, because private respondent had tried to conceal them and
was compelled to present the same before the LA26 only when he (petitioner Garcia) demanded to
see them.27

The Court is not convinced that by said logbook entry and affidavit of Joey Limbo, petitioner Garcia
effectively controverted the existing evidence against him. The logbook entry merely reports that De
Guzman recovered the stolen properties from the fifth floor of the office building.28 The

affidavit of Joey Limbo merely repeated the logbook entry.29 That these documents do not disclose
any further detail is understandable, for as explained by De Guzman himself in his affidavit, he
merely reported the recovery of the stolen properties to Joey Limbo and did not elaborate on the
circumstances thereof, but when he was confronted by private respondent the following day, it was
then that he divulged the details leading to the recovery of said properties.30

Verily, the Court finds no indication that the CA misappreciated the evidence when it affirmed the
findings of the NLRC and LA against petitioner Garcia.

Finally, petitioners complain that they were denied due process when they were not furnished a copy
of the evidence against them or the minutes of the investigation.31

It is oft repeated that in administrative proceedings, due process is served by the mere fact that each
party is afforded an opportunity to air its side,32 not necessarily through verbal argumentation, but
also through pleadings in which the parties may explain their side of the controversy. 33 It is of record
that petitioners were informed of the charges against them and were given the opportunity to present
their defense, not just in the administrative investigation, but also in the proceedings before the LA
and NLRC. The requirements of due process were more than adequately satisfied.

In fine, the Court sees no compelling reason to disturb the concurrent factual findings of the CA,
NLRC and LA that petitioner Garcia was involved in the theft of respondent's properties and in the
attempt to cover up said act for the same are supported by substantial evidence.

However, the Court finds scant evidence to connect petitioner Morales to the theft or its cover-up
and therefore declares that the CA committed a grievous error in upholding his dismissal.

WHEREFORE, the petition is PARTLY GRANTED. The assailed March 13, 2003 Decision and
October 9, 2003 Resolution of the Court of Appeals are AFFIRMED insofar as they sustained the
dismissal of the complaint of petitioner Oscar Garcia; and REVERSED and SET ASIDE insofar as
they sustained the dismissal of the complaint of petitioner Alex Morales. The complaint for the illegal
dismissal of Alex Morales is GRANTED. His immediate reinstatement with backwages is ordered.

No costs.

SO ORDERED.

G.R. No. 179563 April 30, 2009

BACOLOD-TALISAY REALTY AND DEVELOPMENT CORPORATION, MR. MARIO GONZAGA

in his capacity as President of Bacolod Realty and Development Corporation, AND MR.
ERNESTO ALLEN LACSON, JR. in his capacity as Administrator of Bacolod Realty and
Development, Corporation, Petitioner,
vs.
ROMEO DELA CRUZ, Respondent.

DECISION

CARPIO-MORALES, J.:

From 1980 up to 1997, Romeo de la Cruz was employed at the Hacienda Gloria, a farm owned and
managed by petitioner Bacolod-Talisay Realty and Development Corporation (BTRD). He was
dismissed on July 3, 1997 at which time he was holding the position of overseer, in charge of the
work of the laborers, checking their attendance, reporting the number of hours worked by each
laborer for payroll purposes, checking in-coming and out-going cargo, and selling and receiving
payments for seedpieces and canepoints. He was also entrusted with farm equipment and other
farm property.
He was dismissed on charges of payroll padding, selling canepoints without the knowledge and
consent of management and misappropriating the proceeds thereof, and renting out BTRD’s tractor
for use in another farm and misappropriating the proceeds thereof.

Respondent thus filed on July 10, 1997 a complaint for illegal suspension and illegal dismissal
before the National Labor Relations Commission (NLRC)1 against petitioners BTRD et al.

In his Position Paper,2 respondent claimed that on June 4, 1997, he received a June 3, 1997 letter
informing him that he was being suspended for the next 30 days due to the abovementioned
charges and that there was an ongoing investigation thereof; and after 30 days his wife received a
letter dated July 3, 1997 stating that he was terminated from the service on account of the charges.

In their Position Paper, petitioners claimed that as a result of the investigation of respondent’s
questioned acts, it was discovered that there were farm workers whose names were entered in the
payroll even if they did not render services and the corresponding wages were not received by them;
and while respondent committed to return the money intended for wages of those workers who
rendered no services, he did not return them.

Petitioners further claimed that a company tractor was used in another farm, rental fees of which
were not remitted to BTRD, and when confronted, respondent admitted his wrongdoings and asked
for forgiveness; and while a confrontation about the matter was held before the barangay council, no
settlement was reached.3

The Labor Arbiter dismissed respondent’s complaint for lack of merit.4 And the NLRC dismissed
respondent’s appeal for not being verified.5

By Decision6 of April 13, 2007, the Court of Appeals, brushing aside the lack of verification of
respondent’s appeal before the NLRC, found that petitioners "did not comply with the x x x
guidelines for the dismissal of [the] employee"7 and accordingly reversed the NLRC decision,
disposing as follows:

WHEREFORE, the petition is GRANTED. Accordingly, the subject resolutions of the National Labor
Relations Commission are REVERSED and SET ASIDE. Petitioner is entitled to reinstatement
without loss of seniority rights and benefits and to payment of backwages which shall not exceed
three (3) years.8 (Emphasis in the original; underscoring supplied)

Hence, the present petition,9 petitioners faulting the Court of Appeals

x x x IN NOT DECIDING THAT PETITIONER SHOULD ONLY BE HELD LIABLE FOR NOMINAL
DAMAGES PURSUANT TO THE AGABON DOCTRINE AND OTHER SUBSEQUENT CASES BUT
THE DISMISSAL OF THE RESPONDENT SHOULD BE HELD AS VALID, THE CASE BEING
ATTENDED BY JUST CAUSE FOR TERMINATION OF EMPLOYMENT.

II

x x x BY RULING THAT AN APPEAL CAN BE HAD WITH THE NLRC EVEN THOUGH NO
VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING WAS ATTACHED TO THE
APPEAL, AND EVEN THOUGH NO REASONS OR EXCUSE WAS ADVANCED BY THE
RESPONDENT FOR THE NON-SUBMISSION OF THE VERIFICATION AND CERTIFICATION OF
NON-FORUM SHOPPING.

III

x x x IN REVERSING THE DECISION OF THE NLRC AND THE LABOR ARBITER A QUO ON THE
BASIS OF MERE SPECULATION, CONJECTURE AND MERE SELF-SERVING STATEMENTS OF
THE RESPONDENT.10 (Underscoring supplied)

That the Court of Appeals went on to give due course to respondent’s petition despite the lack of
verification in respondent’s appeal before the NLRC is not erroneous. Lack of verification is not a
fatal defect. Verification is only a formal, not a jurisdictional requirement.11 It could easily be
corrected by directing compliance therewith,12 its purpose being simply to secure an assurance that
the allegations of the petition (or complaint) have been made in good faith, or are true and correct,
not merely speculative.13

The Court of Appeals, in finding for respondent, noted that the proper procedure in dismissing him
was not observed; ergo, it ordered his "reinstatement . . . " Oddly, the appellate court did not
determine whether there was just case for respondent’s dismissal. For it is only when an employee’s
dismissal is not justified that reinstatement is, among other things, if still feasible, in order. This
brings the Court to pass on the merits of the case.

This Court finds that petitioners were able to establish with substantial evidence that just cause
existed for the termination of respondent’s employment. Consider the following documentary
evidence they presented:

1. Excerpt from the official log book of the barangay council of Barangay Concepcion,
Talisay, Negros Occidental dated May 30, 1997 documenting the statements of Federico
Serie and Jonathan Quilla during a confrontation before the barangay counsel;14

2. Petitioner Lacson’s affidavit;15

3. Joint Affidavit of petitioner Mario Gonzaga and the vice-president and secretary of
BTRD;16

4. Joint affidavit of Federico Serie, Jr. (Serie), Jonathan Quilla (Quilla), Eddie Sausa (Sausa),
and Roberto Tortogo (Tortogo) claiming that they refused to sign the payroll which
respondent prepared because it indicated that they received ₱256 although they received
only ₱71;17

5. Copies of payrolls for June 3-8, 1996 and June 10-15, 1996, with respondent’s signature
beside the name of Federico Serie who refused to sign;18

6. Affidavit of John Trasmonte (Transmonte), in charge of keeping the payroll records and
cash disbursement of workers’ wages for June 1996, claiming that he prepared the payroll
based on respondent’s report and that he did not receive any return of excess wages for the
cash disbursement from the said payroll;19

7. Affidavit of Jose Racel Magbanua (Magbanua) stating that he saw respondent allowing the
use of the hacienda’s tractor in another farm and receiving rent therefrom;20
 8. Affidavit of Rodolfo Cañeso (Cañeso) stating that he saw respondent selling pieces of
patdan and drammy;21 and

9. Affidavit of Ma. Leonisa Gonzaga claiming shortfalls in the proceeds of the sale of drammy
and patdan as reported and remitted by respondent.22

The above-listed documentary evidence of petitioner indubitably establishes that respondent

committed payroll padding, sold canepoints without the knowledge and consent of management and
misappropriated the proceeds thereof, and rented tractor to another farm and misappropriated the
rental payments therefor. These acts constitute willful breach by the employee of the trust reposed in
him by his employer ─ a ground for termination of employment.23

In his appeal before the NLRC, respondent noted24 that affiants Sausa and Tortogo challenged their
Joint Affidavit listed above, claiming that they did not understand its contents as they were not
translated to the dialect they understand.25 To respondent, this should have placed the Labor Arbiter
on notice that there was something irregular that should have called for him to order, but he did not,
the conduct of clarificatory hearings.26

Respondent’s position does not persuade. Sausa’s and Tortogo’s challenge to their Joint Affidavit
does not affect the totality of petitioners’ evidence, as affiants Serie and Quilla attested to the same
matter-subject of Sausa and Tortogo’s questioned Joint Affidavit. Besides, as reflected above, other
affidavits and pieces of documentary evidence in support of petitioners’ position were presented.
Respondent had been furnished petitioners’ Position Paper to which copies of these affidavits and
other documentary evidence against him were attached.27 Thus, respondent had the opportunity to
file a counter-position paper and refute the evidence against him, but he did not.

The Court of Appeals correctly held though that petitioners did not comply with the proper procedure
in dismissing respondent. In other words, petitioners failed to afford respondent due process by
failing to comply with the twin notice requirement in dismissing him, viz: 1) a first notice to apprise
him of his fault, and 2) a second notice to him that his employment is being terminated. lawphi 1.net

The letter dated June 3, 1997 sent to respondent was a letter of suspension. It did not comply with
the required first notice,28 the purpose of which is to apprise the employee of the cause for
termination and to give him reasonable opportunity to explain his side.29

The confrontation before the barangay council did not constitute the first notice ─ to give the
employee ample opportunity to be heard with the assistance of counsel, if he so desires.30 Hearings
before the barangay council do not afford the employee ample opportunity to be represented by
counsel if he so desires because Section 415 of the Local Government Code mandates that "[i]n all
katarungang pambarangay proceedings, the parties must appear in person without the assistance of
counsel or his representatives, except for minors and incompetents who may be assisted by their
next-of-kin who are not lawyers."

The requirement of giving respondent the first notice not having been complied with, discussions of
whether the second notice was complied with is rendered unnecessary.

In fine, while the dismissal of respondent was for a just cause, the procedure in effecting the same
was not observed.

WHEREFORE, the assailed Decision of the appellate court is VACATED and another is rendered
ORDERING petitioners to, in light of the foregoing discussions, PAY respondent the sum of ₱30,000
as nominal damages.
SO ORDERED.

G.R. No. 181974 February 1, 2012

LYNVIL FISHING ENTERPRISES, INC. and/or ROSENDO S. DE BORJA, Petitioners,

vs.
ANDRES G. ARIOLA, JESSIE D. ALCOVENDAS, JIMMY B. CALINAO AND LEOPOLDO G.
SEBULLEN,Respondents.

DECISION

PEREZ, J.:

Before the Court is a Petition for Review on Certiorari1 of the Decision2 of the Fourteenth Division of
the Court of Appeals in CA-G.R. SP No. 95094 dated 10 September 2007, granting the Writ of
Certiorari prayed for under Rule 65 of the 1997 Revised Rules of Civil Procedure by herein
respondents Andres G. Ariola, Jessie D. Alcovendas, Jimmy B. Calinao and Leopoldo Sebullen
thereby reversing the Resolution of the National Labor Relations Commission (NLRC). The
dispositive portion of the assailed decision reads:

WHEREFORE, premises considered, the Decision dated March 31, 2004 rendered by the National
Labor Relations Commission is hereby REVERSED and SET ASIDE. In lieu thereof, the Decision of
the Labor Arbiter is hereby REINSTATED, except as to the award of attorney’s fees, which is
ordered DELETED.3

The version of the petitioners follows:

1. Lynvil Fishing Enterprises, Inc. (Lynvil) is a company engaged in deep-sea fishing,

operating along the shores of Palawan and other outlying islands of the Philippines.4 It is
operated and managed by Rosendo S. de Borja.

2. On 1 August 1998, Lynvil received a report from Romanito Clarido, one of its employees,
that on 31 July 1998, he witnessed that while on board the company vessel Analyn VIII,
Lynvil employees, namely: Andres G. Ariola (Ariola), the captain; Jessie D. Alcovendas
(Alcovendas), Chief Mate; Jimmy B. Calinao (Calinao), Chief Engineer; Ismael G. Nubla
(Nubla), cook; Elorde Bañez (Bañez), oiler; and Leopoldo D. Sebullen (Sebullen), bodegero,
conspired with one another and stole eight (8) tubs of "pampano" and "tangigue" fish and
delivered them to another vessel, to the prejudice of Lynvil.5

3. The said employees were engaged on a per trip basis or "por viaje" which terminates at
the end of each trip. Ariola, Alcovendas and Calinao were managerial field personnel while
the rest of the crew were field personnel.6
 4. By reason of the report and after initial investigation, Lynvil’s General Manager Rosendo
S. De Borja (De Borja) summoned respondents to explain within five (5) days why they
should not be dismissed from service. However, except for Alcovendas and Bañez,7 the
respondents refused to sign the receipt of the notice.

5. Failing to explain as required, respondents’ employment was terminated.

6. Lynvil, through De Borja, filed a criminal complaint against the dismissed employees for
violation of P.D. 532, or the Anti-Piracy and Anti-Highway Robbery Law of 1974 before the
Office of the City Prosecutor of Malabon City.8

7. On 12 November 1998, First Assistant City Prosecutor Rosauro Silverio found probable
cause for the indictment of the dismissed employees for the crime of qualified theft9 under the
Revised Penal Code.

On the other hand, the story of the defense is:

1. The private respondents were crew members of Lynvil’s vessel named Analyn VIII.10

2. On 31 July 1998, they arrived at the Navotas Fishport on board Analyn VIII loaded with
1,241 bañeras of different kinds of fishes. These bañeras were delivered to a consignee
named SAS and Royale.11

The following day, the private respondents reported back to Lynvil office to inquire about
their new job assignment but were told to wait for further advice. They were not allowed to
board any vessel.12

3. On 5 August 1998, only Alcovendas and Bañez received a memorandum from De Borja
ordering them to explain the incident that happened on 31 July 1998. Upon being informed
about this, Ariola, Calinao, Nubla and Sebullen went to the Lynvil office. However, they were
told that their employments were already terminated.13

Aggrieved, the employees filed with the Arbitration Branch of the National Labor Relations
Commission-National Capital Region on 25 August 1998 a complaint for illegal dismissal with claims
for backwages, salary differential reinstatement, service incentive leave, holiday pay and its premium
and 13th month pay from 1996 to1998. They also claimed for moral, exemplary damages and
attorney’s fees for their dismissal with bad faith.14

They added that the unwarranted accusation of theft stemmed from their oral demand of increase of
salaries three months earlier and their request that they should not be required to sign a blank
payroll and vouchers.15

On 5 June 2002, Labor Arbiter Ramon Valentin C. Reyes found merit in complainants’ charge of
illegal dismissal.16The dispositive portion reads:

WHEREFORE, premises considered, judgment is hereby rendered finding that complainants were
illegally dismissed, ordering respondents to jointly and severally pay complainants (a) separation pay
at one half month pay for every year of service; (b) backwages; (c) salary differential; (d) 13th month
pay; and (e) attorney’s fees, as follows:
"1) Andres Ariola
Backwages P234,000.00

(P6,500.00 x 36 = P234,000.00)

Separation Pay – P74,650.00

13th Month Pay – P6,500.00

P325,250.00

"2) Jessie Alcovendas

Backwages P195,328.00
(P5,148.00 x 36 = P195,328.00)

Separation Pay – P44,304.00

13th Month Pay – 5,538.00
Salary Differential – 1,547.52

P246,717.52

"3) Jimmy Calinao

Backwages P234,000.00
(P6,500.00 x 36 = P234,000.00)

Separation Pay – 55,250.00

13th Month Pay – P6,500.00

P295,700.00
"4) Leopoldo Sebullen
Backwages P154,440.00

(P4, 290.00 x 36 = P154,440.00)

Separation Pay – P44,073.00

13th Month Pay – 2,473.12

Salary Differential – 4,472.00

P208,455.12
"5) Ismael Nubla
Backwages P199,640.12
Separation Pay – P58,149.00

13th Month Pay – 2,473.12

Salary Differential – P5,538.00
 P265, 28.12

TOTAL P 1, 341, 650.76

All other claims are dismissed for lack of merit."17

The Labor Arbiter found that there was no evidence showing that the private respondents received
the 41 bañeras of "pampano" as alleged by De Borja in his reply-affidavit; and that no proof was
presented that the 8 bañeras of pampano [and tangigue] were missing at the place of destination.18

The Labor Arbiter disregarded the Resolution of Assistant City Prosecutor Rosauro Silverio on the
theft case. He reasoned out that the Labor Office is governed by different rules for the determination
of the validity of the dismissal of employees.19

The Labor Arbiter also ruled that the contractual provision that the employment terminates upon the
end of each trip does not make the respondents’ dismissal legal. He pointed out that respondents
and Lynvil did not negotiate on equal terms because of the moral dominance of the employer.20

The Labor Arbiter found that the procedural due process was not complied with and that the mere
notice given to the private respondents fell short of the requirement of "ample opportunity" to present
the employees’ side.21

On appeal before the National Labor Relations Commission, petitioners asserted that private
respondents were only contractual employees; that they were not illegally dismissed but were
accorded procedural due process and that De Borja did not commit bad faith in dismissing the
employees so as to warrant his joint liability with Lynvil.22

On 31 March 2004, the NLRC reversed and set aside the Decision of the Labor Arbiter. The
dispositive portion reads:

WHEREFORE, judgment is hereby rendered REVERSING AND SETTING ASIDE the Decision of
the Labor Arbiter a quo and a new one entered DISMISSING the present complaints for utter lack of
merit;

However as above discussed, an administrative fine of PhP5,000.00 for each complainant, Andres
Ariola, Jessie Alcovendas, Jimmy Canilao, Leopoldo Sebullen and Ismael Nobla or a total of
PhP25,000.00 is hereby awarded.23

The private respondents except Elorde Bañez filed a Petition for Certiorari24 before the Court of
Appeals alleging grave abuse of discretion on the part of NLRC.

The Court of Appeals found merit in the petition and reinstated the Decision of the Labor Arbiter
except as to the award of attorney’s fees. The appellate court held that the allegation of theft did not
warrant the dismissal of the employees since there was no evidence to prove the actual quantities of
the missing kinds of fish loaded to Analyn VIII.25 It also reversed the finding of the NLRC that the
dismissed employees were merely contractual employees and added that they were regular ones
performing activities which are usually necessary or desirable in the business and trade of Lynvil.
Finally, it ruled that the two-notice rule provided by law and jurisprudence is mandatory and non-
compliance therewith rendered the dismissal of the employees illegal.
The following are the assignment of errors presented before this Court by Lynvil:

THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THE

ESTABLISHED DOCTRINE LAID DOWN IN NASIPIT LUMBER COMPANY V. NLRC
HOLDING THAT THE FILING OF A CRIMINAL CASE BEFORE THE PROSECUTOR’S
OFFICE CONSTITUTES SUFFICIENT BASIS FOR A VALID TERMINATION OF
EMPLOYMENT ON THE GROUNDS OF SERIOUS MISCONDUCT AND/OR LOSS OF
TRUST AND CONFIDENCE.

II

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE TERMINATION

OF RESPONDENTS’ EMPLOYMENT WAS NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE.

III

THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THAT THE

RESPONDENTS’ EMPLOYMENT, IN ANY EVENT, WERE CONTRACTUAL IN NATURE
BEING ON A PER VOYAGE BASIS. THUS, THEIR RESPECTIVE EMPLOYMENT
TERMINATED AFTER THE END OF EACH VOYAGE

IV

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENTS

WERE NOT ACCORDED PROCEDURAL DUE PROCESS.

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENTS

ARE ENTITLED TO THE PAYMENT OF THEIR MONEY CLAIMS.

VI

THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THAT

PETITIONER ROSENDO S. DE BORJA IS NOT JOINTLY AND SEVERALLY LIABLE FOR
THE JUDGMENT WHEN THERE WAS NO FINDING OF BAD FAITH.26

The Court’s Ruling

The Supreme Court is not a trier of facts. Under Rule 45,27 parties may raise only questions of law.
We are not duty-bound to analyze again and weigh the evidence introduced in and considered by
the tribunals below. Generally when supported by substantial evidence, the findings of fact of the CA
are conclusive and binding on the parties and are not reviewable by this Court, unless the case falls
under any of the following recognized exceptions:

(1) When the conclusion is a finding grounded entirely on speculation, surmises and
conjectures;
 (2) When the inference made is manifestly mistaken, absurd or impossible;

(3) Where there is a grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When the findings of fact are conflicting;

(6) When the Court of Appeals, in making its findings, went beyond the issues of the case
and the same is contrary to the admissions of both appellant and appellee;

(7) When the findings are contrary to those of the trial court;

(8) When the findings of fact are conclusions without citation of specific evidence on which
they are based;

(9) When the facts set forth in the petition as well as in the petitioners' main and reply briefs
are not disputed by the respondents; and

(10) When the findings of fact of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on record. (Emphasis supplied)28

The contrariety of the findings of the Labor Arbiter and the NLRC prevents reliance on the principle
of special administrative expertise and provides the reason for judicial review, at first instance by the
appellate court, and on final study through the present petition.

In the first assignment of error, Lynvil contends that the filing of a criminal case before the Office of
the Prosecutor is sufficient basis for a valid termination of employment based on serious misconduct
and/or loss of trust and confidence relying on Nasipit Lumber Company v. NLRC.29

Nasipit is about a security guard who was charged with qualified theft which charge was dismissed
by the Office of the Prosecutor. However, despite the dismissal of the complaint, he was still
terminated from his employment on the ground of loss of confidence. We ruled that proof beyond
reasonable doubt of an employee's misconduct is not required when loss of confidence is the ground
for dismissal. It is sufficient if the employer has "some basis" to lose confidence or that the employer
has reasonable ground to believe or to entertain the moral conviction that the employee concerned
is responsible for the misconduct and that the nature of his participation therein rendered him
absolutely unworthy of the trust and confidence demanded by his position.30 It added that the
dropping of the qualified theft charges against the respondent is not binding upon a labor tribunal.31

In Nicolas v. National Labor Relations Commission,32 we held that a criminal conviction is not
necessary to find just cause for employment termination. Otherwise stated, an employee’s acquittal
in a criminal case, especially one that is grounded on the existence of reasonable doubt, will not
preclude a determination in a labor case that he is guilty of acts inimical to the employer’s
interests.33 In the reverse, the finding of probable cause is not followed by automatic adoption of such
finding by the labor tribunals.

In other words, whichever way the public prosecutor disposes of a complaint, the finding does not
bind the labor tribunal.
Thus, Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft the
Labor Arbiter must follow the finding as a valid reason for the termination of respondents’
employment. The proof required for purposes that differ from one and the other are likewise
different.

Nonetheless, even without reliance on the prosecutor’s finding, we find that there was valid cause for
respondents’ dismissal.

In illegal dismissal cases, the employer bears the burden of proving that the termination was for a
valid or authorized cause.34

Just cause is required for a valid dismissal. The Labor Code35 provides that an employer may
terminate an employment based on fraud or willful breach of the trust reposed on the employee.
Such breach is considered willful if it is done intentionally, knowingly, and purposely, without
justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. It must also be based on substantial evidence and not on the employer’s whims or
caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer.
Loss of confidence must not be indiscriminately used as a shield by the employer against a claim
that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal,
the act complained of must be work-related and shows that the employee concerned is unfit to
continue working for the employer. In addition, loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned holds a position of responsibility,
trust and confidence or that the employee concerned is entrusted with confidence with respect to
delicate matters, such as the handling or care and protection of the property and assets of the
employer. The betrayal of this trust is the essence of the offense for which an employee is
penalized.36

Breach of trust is present in this case.

We agree with the ruling of the Labor Arbiter and Court of Appeals that the quantity of tubs expected
to be received was the same as that which was loaded. However, what is material is the kind of fish
loaded and then unloaded. Sameness is likewise needed.

We cannot close our eyes to the positive and clear narration of facts of the three witnesses to the
commission of qualified theft. Jonathan Distajo, a crew member of the Analyn VIII, stated in his letter
addressed to De Borja37 dated 8 August 1998, that while the vessel was traversing San Nicolas,
Cavite, he saw a small boat approach them. When the boat was next to their vessel, Alcovendas
went inside the stockroom while Sebullen pushed an estimated four tubs of fish away from it. Ariola,
on the other hand, served as the lookout and negotiator of the transaction. Finally, Bañez and
Calinao helped in putting the tubs in the small boat. He further added that he received ₱800.00 as
his share for the transaction. Romanito Clarido, who was also on board the vessel, corroborated the
narration of Distajo on all accounts in his 25 August 1998 affidavit.38 He added that Alcovendas told
him to keep silent about what happened on that day. Sealing tight the credibility of the narration of
theft is the affidavit39 executed by Elorde Bañez dated 3 May 1999. Bañez was one of the dismissed
employees who actively participated in the taking of the tubs. He clarified in the affidavit that the four
tubs taken out of the stockroom in fact contained fish taken from the eight tubs. He further stated
that Ariola told everyone in the vessel not to say anything and instead file a labor case against the
management. Clearly, we cannot fault Lynvil and De Borja when it dismissed the employees.

The second to the fifth assignment of errors interconnect.

The nature of employment is defined in the Labor Code, thus:

Art. 280. Regular and casual employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:

Provided, That any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to the activity in which he
is employed and his employment shall continue while such activity exists.

Lynvil contends that it cannot be guilty of illegal dismissal because the private respondents were
employed under a fixed-term contract which expired at the end of the voyage. The pertinent
provisions of the contract are:

xxxx

1. NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon sa patakarang

"por viaje" na magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa
pondohan ng lantsa sa Navotas, Metro Manila;

xxxx

1. NA ako ay nakipagkasundo na babayaran ang aking paglilingkod sa paraang "por viaje" sa

halagang P__________ isang biyahe ng kabuuang araw xxxx.40

Lynvil insists on the applicability of the case of Brent School,41 to wit:

Accordingly, and since the entire purpose behind the development of legislation culminating in the
present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent
circumvention of the employee's right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements conflicting with the concept
of regular employment as defined therein should be construed to refer to the substantive evil that the
Code itself has singled out: agreements entered into precisely to circumvent security of tenure. It
should have no application to instances where a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and employee dealt with each other on more or less
equal terms with no moral dominance whatever being exercised by the former over the latter. Unless
thus limited in its purview, the law would be made to apply to purposes other than those explicitly
stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to
absurd and unintended consequences.

Contrarily, the private respondents contend that they became regular employees by reason of their
continuous hiring and performance of tasks necessary and desirable in the usual trade and business
of Lynvil.

Jurisprudence,42 laid two conditions for the validity of a fixed-contract agreement between the
employer and employee:
First, the fixed period of employment was knowingly and voluntarily agreed upon by the parties
without any force, duress, or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent; or

Second, it satisfactorily appears that the employer and the employee dealt with each other on more
or less equal terms with no moral dominance exercised by the former or the latter.43

Textually, the provision that: "NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain
sang-ayon sa patakarang "por viaje" na magmumula sa pagalis sa Navotas papunta sa pangisdaan
at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila" is for a fixed period of employment.
In the context, however, of the facts that: (1) the respondents were doing tasks necessarily to
Lynvil’s fishing business with positions ranging from captain of the vessel to bodegero; (2) after the
end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement
continued for more than ten years, the clear intention is to go around the security of tenure of the
respondents as regular employees. And respondents are so by the express provisions of the second
paragraph of Article 280, thus:

xxx Provided, That any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to the activity
in which he is employed and his employment shall continue while such activity exists.

The same set of circumstances indicate clearly enough that it was the need for a continued source
of income that forced the employees’ acceptance of the "por viaje" provision.

Having found that respondents are regular employees who may be, however, dismissed for cause
as we have so found in this case, there is a need to look into the procedural requirement of due
process in Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code. It is required
that the employer furnish the employee with two written notices: (1) a written notice served on the
employee specifying the ground or grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side; and (2) a written notice of termination served on the
employee indicating that upon due consideration of all the circumstances, grounds have been
established to justify his termination.

From the records, there was only one written notice which required respondents to explain within five
(5) days why they should not be dismissed from the service. Alcovendas was the only one who
signed the receipt of the notice. The others, as claimed by Lynvil, refused to sign. The other
employees argue that no notice was given to them. Despite the inconsistencies, what is clear is that
no final written notice or notices of termination were sent to the employees.

The twin requirements of notice and hearing constitute the elements of [due] process in cases of
employee's dismissal. The requirement of notice is intended to inform the employee concerned of
the employer's intent to dismiss and the reason for the proposed dismissal. Upon the other hand, the
requirement of hearing affords the employee an opportunity to answer his employer's charges
against him and accordingly, to defend himself therefrom before dismissal is effected.44 Obviously,
the second written notice, as indispensable as the first, is intended to ensure the observance of due
process.

Applying the rule to the facts at hand, we grant a monetary award of ₱50,000.00 as nominal
damages, this, pursuant to the fresh ruling of this Court in Culili v. Eastern Communication
Philippines, Inc.45 Due to the failure of Lynvil to follow the procedural requirement of two-notice rule,
nominal damages are due to respondents despite their dismissal for just cause.
Given the fact that their dismissal was for just cause, we cannot grant backwages and separation
pay to respondents. However, following the findings of the Labor Arbiter who with the expertise
presided over the proceedings below, which findings were affirmed by the Court of Appeals, we
grant the 13th month pay and salary differential of the dismissed employees.

Whether De Borja is jointly and severally liable with Lynvil

As to the last issue, this Court has ruled that in labor cases, the corporate directors and officers are
solidarily liable with the corporation for the termination of employment of employees done with
malice or in bad faith.46 Indeed, moral damages are recoverable when the dismissal of an employee
is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner
contrary to good morals, good customs or public policy.

It has also been discussed in MAM Realty Development Corporation v. NLRC47 that:

x x x A corporation being a juridical entity, may act only through its directors, officers and employees.
Obligations incurred by them, acting as such corporate agents, are not theirs but the direct
accountabilities of the corporation they represent. True, solidary liabilities may at times be incurred
but only when exceptional circumstances warrant such as, generally, in the following cases:

1. When directors and trustees or, in appropriate cases, the officers of a corporation:

xxx

(b) act in bad faith or with gross negligence in directing the corporate affairs;

x x x 48

The term "bad faith" contemplates a "state of mind affirmatively operating with furtive design or with
some motive of self-interest or will or for ulterior purpose."49
1âwphi1

We agree with the ruling of both the NLRC and the Court of Appeals when they pronounced that
there was no evidence on record that indicates commission of bad faith on the part of De Borja. He
is the general manager of Lynvil, the one tasked with the supervision by the employees and the
operation of the business. However, there is no proof that he imposed on the respondents the "por
viaje" provision for purpose of effecting their summary dismissal.

WHEREFORE, the petition is partially GRANTED. The 10 September 2007 Decision of the Court of
Appeals in CA-G.R. SP No. 95094 reversing the Resolution dated 31 March 2004 of the National
Labor Relations Commission is hereby MODIFIED. The Court hereby rules that the employees were
dismissed for just cause by Lynvil Fishing Enterprises, Inc. and Rosendo S. De Borja, hence, the
reversal of the award for backwages and separation pay. However, we affirm the award for 13th
month pay, salary differential and grant an additional ₱50,000.00 in favor of the employees
representing nominal damages for petitioners’ non-compliance with statutory due process. No cost.

SO ORDERED.
G.R. No. 166705 July 28, 2009

MANTLE TRADING SERVICES, INCORPORATED AND/OR BOBBY DEL ROSARIO, Petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and PABLO S. MADRIAGA, Respondents.

DECISION

PUNO, C.J.:

This petition for review seeks to reverse the Decision1 of the Court of Appeals in C.A.-G.R. SP No.
84796 which nullified and set aside the Decision2 and Resolution of the National Labor Relations
Commission (NLRC) in NLRC NCR CA No. 034291-03 which modified an earlier decision by the
Labor Arbiter holding that respondent Pablo S. Madriaga (Madriaga) was illegally dismissed.

Petitioner company, Mantle Trading Services, Inc., is engaged in the fishing business.3 Sometime in
June 1989, Madriaga was hired by petitioner company as a "batilyo" or fish hauler. Subsequently, he
became a "tagapuno" (someone who filled up tubs with fish). He worked from 6:00 p.m. up to 6:00
a.m. the following day with a daily pay of ₱150.00.

On August 10, 1999, Madriaga was reported by one Henry Gallos, a fish broker, to have received
money from a fish trader, Mr. Edwin Alfaro. As consideration, Madriaga would put more fish in
Alfaro’s tubs. On August 25, 1999, Madriaga was again reported to have received money from Alfaro
for the same illicit purpose. In both incidents, formal incident reports were submitted to the petitioner
company.4

On September 11, 1999, Madriaga was allegedly barred by the payroll master, Mr. Charlie Baqued,
from reporting for work. Petitioner company, on the other hand, alleged that Madriaga abandoned
his work when he was about to be investigated for the two incident reports.

On February 7, 2001, Madriaga filed a complaint with the Regional Office of the Department of Labor
and Employment (DOLE)—National Capital Region (NCR) against petitioners, for illegal dismissal,
underpayment of wages and nonpayment of holiday pay, 13th month pay, overtime pay, service
incentive leave pay and night shift differential pay.

On June 20, 2001, the DOLE-NCR Regional Office endorsed the complaint to the NCR Arbitration
Branch. Petitioner company alleged, among others, that Madriaga was a seasonal employee and he
was not dismissed. In a decision rendered on August 26, 2002, Labor Arbiter Melquiades Sol D. Del
Rosario found Madriaga to be a regular employee who was illegally dismissed. The dispositive
portion states, viz.:

CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding complainant to

have been illegally dismissed. Respondent Mantle Trading Services, Inc. is hereby ordered to pay
complainant the sums computed in the body of this decision, which dispositions are made a part
hereof.

SO ORDERED.5
The Labor Arbiter ruled that Madriaga was a regular employee because "the nature of [Madriaga’s]
work is filling tubs with fish everytime the fishing vessel would come to port, and that the business of
respondent is the disposition of fish catch."6 He found that since the signing of the employment
agreement with petitioner company on August 1, 1996, Madriaga had been working as "tagapuno"
continuously.7 He held that Madriaga’s work was necessary or desirable in the usual business or
trade of the petitioner company.8 The Labor Arbiter concluded that Madriaga could not have been a
project worker as alleged by the petitioner company because there is no specific project that
appeared on the contract and neither was there a statement as to the specific period of time when
that the project will be completed.

The Labor Arbiter also faulted the petitioner company in failing to comply with the requirement of
notice before dismissing an employee. He held that the employer must furnish the employee, sought
to be dismissed, with two (2) written notices before termination can be legally effected: first, there
must be a notice which apprises the employee of the particular acts or omissions for which the
dismissal is sought; and second, a subsequent notice which informs the employee of the employer’s
decision to dismiss him.9 The Labor Arbiter held that even if the ground of dismissal is abandonment
of work, there must still be a notice to be served at the employee’s last known address.10

The Labor Arbiter awarded Madriaga with backwages to be paid not from the date he was
dismissed, on September 11, 1999, but on February 7, 2001 "as a matter of penalty for dilly-dallying
in the filing of the case."11As of June 11, 2002, respondent’s backwages amounted to ₱82,368.00. In
addition, the Labor Arbiter awarded Madriaga ₱15,444.00 as separation pay, ₱24,240.00 for
underpayment of wages, ₱1,980.00 for unpaid holiday pay, or the total amount of ₱124,032.00.12

Petitioner company appealed to the NLRC. It charged that the Labor Arbiter committed grave abuse
of discretion in holding that: (1) Madriaga was a regular and not a contractual employee; (2) he was
illegally dismissed; and (3) his money claims were granted. 1avv phi 1

On January 30, 2004, the NLRC modified the decision of the Labor Arbiter. It affirmed the Labor
Arbiter’s ruling that Madriaga was a regular employee but it held that Madriaga was not illegally
dismissed, viz.:

As regards the second issue, respondent [Mantle] contends that [Madriaga] was not illegally
dismissed because being a contractual/seasonal/project employee, his employment was terminated
at the end of the undertaking or at the latest, at the end of the fishing season for 1999, hence, there
was no need to comply with the two-notice requirement under the law. It claims that when the
incidents of August 10 and August 25, 1999 were about to be investigated, complainant [Madriaga]
disappeared from the fish port and abandoned his work, only to surface again when this complaint
was heard. It avers that complainant committed serious misconduct since by the account of his co-
workers, he received money from a fish trader to intentionally injure the interest of the respondent.

We find that complainant was neither dismissed by the respondent nor did he abandon his work.
Based on the records, no notice of termination was sent to the complainant by the respondent
company, much less was complainant verbally told by any officer of the respondent not to report for
work. Complainant’s allegation that he was barred by the payroll master from reporting for work has
not been substantiated. In any case, even if it were true, the act of the payroll master in preventing
the complainant from reporting for work cannot be deemed respondent’s act in the absence of
evidence that said payroll master had the authority to dismiss employees. What appears to have
happened here is that complainant was not dismissed by the respondent company but the
complainant without ascertaining the authority of the payroll master, heeded the latter’s order for him
not to report for work.13
The NLRC rejected petitioner company’s contention that Madriaga abandoned his work. It ruled that
mere absence is not sufficient. There must be proof that there was deliberate and unjustified refusal
on the part of the employee to resume his employment without any intention of returning.

Thus, the dispositive portion of the NLRC decision held:

Wherefore, the Decision dated August 26, 2002 is MODIFIED. Complainant is declared not illegally
dismissed and directed to report for work. Respondent is directed to accept complainant back to
work and to pay complainant the amount of twenty four thousand two hundred forty pesos
(P24,240.00) as salary differentials, five thousand one hundred forty eight pesos (P5,148.00) as 13th
month pay and one thousand nine hunded eighty pesos (P1,980.00) as holiday pay, or the
aggregate sum of thirty one thousand three hundred twenty eight pesos (P31,328.00).

SO ORDERED.14

Both petitioner company and respondent filed their respective motions for reconsideration. Petitioner
company contended that the NLRC erred when it found Madriaga to have been employed since
1989 and not 1999. It reiterated its argument that Madriaga was not a regular employee and that he
abandoned his work. Respondent, on the other hand, insisted he was illegally dismissed. On March
31, 2004, their motions for reconsideration were denied for lack of merit.

Petitioner company sought recourse with the Court of Appeals through a Petition for Certiorari. It
alleged that the NLRC committed grave abuse of discretion amounting to lack or excess of
jurisdiction in ruling that: (1) Madriaga was a regular employee; (2) his employment commenced in
1989 as testified to by the employee and not 1999 as stated in their employment contract; and (3) he
did not abandon his work.

On August 31, 2004, the Court of Appeals affirmed the finding of the Labor Arbiter and the NLRC
that Madriaga was a regular employee. It held that Madriaga’s work as tagapuno may be likened to
the work of a cargador which is directly related, necessary and vital to the operations of the
employer’s business.15 It ruled that the distribution of the day’s catch to the tubs of different fish
traders has a reasonable connection to the fishing business of petitioner company.

The Court of Appeals also sustained the ruling that Madriaga began work in 1989 and not in 1999. It
affirmed the joint finding of the Labor Arbiter and the NLRC based on the testimony of the employee
that he began work in 1989 as opposed to the questionable employee contract dated 1999.

The Court of Appeals, however, reversed the Labor Arbiter and the NLRC on the issue of
abandonment of work. It held that there was a causal connection between the charge against
Madriaga of having received money from a fish trader and his failure to seek his immediate
reinstatement. It ruled that Madriaga abandoned his work as it was only invoked two years after his
alleged dismissal. However, despite the finding that Madriaga abandoned his work, the Court of
Appeals held that "[c]onsidering that petitioner has not established the compliance with due process
in terminating respondent’s employment, it is still considered to have committed illegal
dismissal."16 The dispositive portion of its Decision held:

Wherefore, the Decision dated January 30, 2004 of the National Labor Relations Commission is
ANNULLED and SET ASIDE. Accordingly, the Decision dated August 26, 2002 of the Labor Arbiter
finding private respondent to have been illegally dismissed is REINSTATED.

SO ORDERED.17
Petitioner company filed a Motion for Reconsideration and a Supplemental Motion for
Reconsideration, which were both denied in a Resolution dated January 13, 2004.18

It now comes before this Court raising the following issues:

I.

Whether or not the Honorable Court of Appeals erred when it went beyond the scope of a
writ of certiorari in resolving that private respondent was illegally dismissed although such
issue was not raised [in] the petition for certiorari.

II.

Whether or not the Honorable Court of Appeals erred when it held that private respondent
was illegally dismissed because petitioner did not comply with the notice requirement despite
its finding of abandonment of work.

The first ground patently lacks merit. Petitioner company raised three (3) assignment of errors before
the Court of Appeals, i.e., whether the NLRC committed grave abuse of discretion amounting to lack
or excess of jurisdiction: (1) in ruling that Madriaga is a regular employee; (2) in holding that
Madriaga’s employment commenced in 1989; and (3) in concluding that respondent did not abandon
his work. All these issues cannot be divorced from the question of whether Madriaga was illegally
dismissed by the petitioner company. More specifically, the issue of abandonment is inextricably
linked with the issue of the validity of the dismissal.19 Indeed, the illegal dismissal of Madriaga was
the subject of his complaint that was resolved by the Labor Arbiter, the NLRC and the Court of
Appeals. It is the heart of the case at bar.

We now come to the ruling of the Court of Appeals that Madriaga who abandoned his work was
nevertheless illegally dismissed for non-compliance by the petitioner company with the notice
requirement. It is settled that to effect a valid dismissal, the law requires that a) there be just and
valid cause as provided under Article 282 of the Labor Code; and b) the employee be afforded an
opportunity to be heard and to defend himself. The two-notice requirement must be complied with, to
wit: a) a written notice containing a statement of the cause for the termination to afford the employee
ample opportunity to be heard and defend himself with the assistance of his representative, if he so
desires; and b) if the employer decides to terminate the services of the employee, the employer must
notify him in writing of the decision to dismiss him, stating clearly the reason therefore.20

The case of Agabon v. NLRC, et al.21 applies to the case at bar. In Agabon, the dismissal was found
by the Court to be based on a just cause because the employee abandoned his work. But it also
found that the employer did not follow the notice requirement demanded by due process. It ruled that
this violation of due process on the part of the employer did not nullify the dismissal, or render it
illegal, or ineffectual. Nonetheless, the employer was ordered to indemnify the employee for the
violation of his right to due process. It further held that the penalty should be in the nature of
indemnification, in the form of nominal damages and should depend on the facts of each case,
taking into special consideration the gravity of the due process violation of the employer.22 The
amount of such damages is addressed to the sound discretion of the court, considering the relevant
circumstances.23 Thus, in Agabon, the Court ordered the employer to pay the employee nominal
damages in the amount of ₱30,000.00.

Again, we stress that though the Court is given the latitude to determine the amount of nominal
damages to be awarded to an employee who was validly dismissed but whose due process rights
were violated, a distinction should be made between a valid dismissal due to just causes under
Article 282 of the Labor Code and those based on authorized causes, under Article 283. The two
causes for a valid dismissal were differentiated in the case of JAKA Food Processing Corporation v.
Pacot24 where the Court held that:

A dismissal for just cause under Article 282 implies that the employee concerned has committed, or
is guilty of, some violation against the employer, i.e. the employee has committed some serious
misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected his
duties. Thus, it can be said that the employee himself initiated the dismissal process.

On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply
delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by
the employer's exercise of his management prerogative, i.e. when the employer opts to install labor
saving devices, when he decides to cease business operations or when, as in this case, he
undertakes to implement a retrenchment program.

xxxx

Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but
the employer failed to comply with the notice requirement, the sanction to be imposed upon him
should be tempered because the dismissal process was, in effect, initiated by an act imputable to
the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the
employer failed to comply with the notice requirement, the sanction should be stiffer because the
dismissal process was initiated by the employer's exercise of his management prerogative.25

Since in the case of JAKA, the employee was terminated for authorized causes as the employer was
suffering from serious business losses, the Court fixed the indemnity at a higher amount of
₱50,000.00. In the case at bar, the cause for termination was abandonment, thus it is due to the
employee’s fault. It is equitable under these circumstances to order the petitioner company to pay
nominal damages in the amount of ₱30,000.00, similar to the case of Agabon.

We affirm the award of salary differentials, 13th month pay and holiday pay, awarded by the NLRC
and the Court of Appeals. We note that although petitioner company had cause to terminate
Madriaga, this has no bearing on the issue of award of salary differentials, holiday pay and 13th
month pay because prior to his valid dismissal, he performed work as a regular employee of
petitioner company, and he is entitled to the benefits provided under the law. Thus, in the case
of Agabon, even while the Court found that the dismissal was for a just cause, the employee was
still awarded his monetary claims.

An employee should be compensated for the work he has rendered in accordance with the minimum
wage, and must be appropriately remunerated when he was suffered to work on a regular holiday
during the time he was employed by the petitioner company. As regards the 13th month pay, an
employee who was terminated at any time before the time for payment of the 13th month pay is
entitled to this monetary benefit in proportion to the length of time he worked during the year,
reckoned from the time he started working during the calendar year up to the time of his termination
from the service.26

As a general rule, one who pleads payment has the burden of proving it. Even where the employee
must allege nonpayment, the general rule is that the burden rests on the employer to prove
payment, rather than on the employee to prove nonpayment. The reason for the rule is that the
pertinent personnel files, payrolls, records, remittances and other similar documents — which will
show that overtime, differentials, service incentive leave and other claims of workers have been paid
— are not in the possession of the employee but in the custody and absolute control of the
employer. 27 Since in the case at bar petitioner company has not shown any proof of payment of the
correct amount of salary, holiday pay and 13th month pay, we affirm the award of Madriaga’s
monetary claims.

IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of Appeals in C.A.-G.R. SP
No. 84796, dated August 31, 2004, annulling and setting aside the Decision of the NLRC dated
January 30, 2004 and reinstating the Decision dated August 26, 2002 of the Labor Arbiter finding
respondent Pablo S. Madriaga a regular employee and ordering the petitioner company to pay the
amount of twenty-four thousand, two hundred forty pesos (₱24,240.00) as salary differentials, five
thousand, one hundred forty-eight pesos (₱5,148.00) as 13th month pay, and one thousand, nine
hundred eighty pesos (₱1,980.00) as holiday pay, is hereby AFFIRMED. In accordance with the
ruling in Agabon, the award for backwages is deleted, but in addition, the amount of thirty thousand
pesos as nominal damages (₱30,000.00) is awarded to the respondent. The aggregate sum of the
award to Madriaga shall be the total of sixty-one thousand, three hundred twenty-eight pesos
(₱61,328.00).

No costs.

SO ORDERED.

G.R. No. 188882 March 30, 2010

PHILIPPINE VETERANS BANK, Petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION) and BENIGNO
MARTINEZ, Respondents.

RESOLUTION

BRION, J.:

Submitted for our review in this petition for review on certiorari (with a prayer for temporary
restraining order and/or writ of preliminary injunction)1 are the decision2 and the resolution3 of the
Court of Appeals (CA) in CA-G.R. SP No. 00708. The CA decision affirmed the December 8, 2004
decision4 and March 14, 20055 resolution of the National Labor Relations Commission (NLRC),
Fourth Division, Cebu City. The NLRC, in turn, reversed the decision of the Labor Arbiter (LA) that
dismissed the respondent’s complaint for constructive dismissal.

On February 20, 2003, respondent Benigno B. Martinez (respondent) filed a complaint for illegal
dismissal, with a claim for backwages, reinstatement and damages against petitioner Philippine
Veterans Bank (petitioner).

In his position paper, the respondent alleged that he was the manager of the petitioner’s Dumaguete
Branch from September 1, 2001 until January 8, 2003, when his supposed resignation from the
petitioner became effective. The respondent claimed that his resignation stemmed from a report
published by the Philippine Daily Inquirer regarding the anomalies hounding the petitioner’s high-
ranking officials. This controversy according to the respondent resulted in huge withdrawals of major
depositors. Concerned, the respondent approached Mr. Wilfredo S. Aniñon (Mr. Aniñon), the
petitioner’s Area Head for Visayas and Mindanao to discuss how to resolve the matter. When Mr.
Aniñon just brushed off the issue, the respondent requested the Mayor of Valencia (a known big
depositor of the Dumaguete Branch) to talk to Mr. Aniñon. The latter apparently misinterpreted the
respondent’s actions and angrily confronted him the next day, saying – "You fool, you went to the
mayor of Valencia to seek support. Let them pull out all their deposits, they cannot threaten me! Let
them pull out immediately! I will see to it that you will be replaced there! If not, I’d manage the branch
myself! Or I’ll have Dumaguete Branch made under the Luzon area so that I have nothing to do with
your branch."

On October 14, 2002, Mr. Aniñon went to the Dumaguete Branch and brought along with him Mr.
Mansueto Quijote as the respondent’s replacement and new branch manager. Mr. Aniñon then
instructed the respondent to go to the petitioner’s head office in Makati to report to the Vice
President and Head of Branch Banking Division, Mr. Jose D. Lloren, Jr (VP Lloren).

The respondent flew to Manila and reported to the Makati Office, as ordered. VP Lloren told him that
he would undergo training, but no such training took place. Instead, he was made to do clerical jobs.
To compound the unjust treatment, the respondent had to travel at least 4 hours daily from his
rented house in Cavite to Makati; his travel and living expenses consumed at least half of his salary.
On January 8, 2003, the respondent tendered his resignation citing that "it is so expensive for [him]
to be staying away from [his] family."

The petitioner in its Position Paper claimed that the respondent’s transfer was not motivated by bad
faith. It argued that Special Order No. 880, which ordered the respondent’s transfer to the Branch
Banking Division to undergo Branch Head Training effective October 21, 2002, authorized the
respondent’s transfer. The same Order stated that the respondent’s transfer will not entail any
change in rank and compensation and that he is also entitled to per diem and housing allowance
amounting to six thousand pesos. The petitioner further claimed that the respondent’s transfer was
neither unceremonious nor without his consent since he agreed in his contract of employment that
he can be given a different assignment at any given time. Finally, the petitioner claimed that the
respondent was not placed on "floating status;" after his training on October 29, 2002, he was
assigned to the Due Head Office Task Force to hold the sensitive position of reconciling all book
entries of all the petitioner’s branches. Thus, to the petitioner, the respondent was not constructively
dismissed; he voluntarily resigned from his job.

The LA and NLRC Rulings

On June 30, 2003, the LA dismissed the respondent’s complaint for lack of merit. The LA found that
the petitioner was not guilty of constructive dismissal and that the respondent voluntarily resigned
from the service.

On appeal, the NLRC reversed the LA’s decision and held that the respondent was constructively
dismissed. The NLRC awarded backwages, separation pay in lieu of reinstatement, moral and
exemplary damages in the aggregate amount of ₱933,350.00. The NLRC found that the
"unceremonious replacement" of the respondent on October 14, 2002 is akin to constructive
dismissal. It also found that the events following the respondent’s transfer, including the
inconvenience that he had to face on a daily basis while working in Makati, left him with no other
option but to resign.
On December 8, 2004, the petitioner filed a petition for certiorari before the Court of Appeals (CA)
contending that the NLRC committed grave abuse of discretion in ruling that the respondent was
constructively dismissed. During the pendency of the petition for certiorari, the petitioner filed a
supplemental petition raising the theory that the present case involves the termination of an elected
corporate officer, which issue is not within the jurisdiction of the LA, but within the exclusive and
original jurisdiction of the Regional Trial Courts.

The CA Ruling

On February 27, 2009, the CA affirmed the NLRC’s decision with modification on the award of
backwages (to be reckoned from January 16, 2003 up to the finality of the decision) and attorney’s
fees. Procedurally, the CA found the petitioner’s petition for certiorari to be defective and, therefore,
dismissible since the Head of the Legal Department (who signed the Certification of Non-Forum
Shopping) was not duly authorized to file the petition in the petitioner’s behalf. The CA held that in
the absence of any authority from the board of directors, no person, not even the officers of the
corporation, can validly bind the corporation.

On the merits, the CA held that the petitioner is estopped from raising the issue of lack of jurisdiction
for the very first time on appeal. The CA held that the respondent’s unceremonious replacement
amounted to constructive dismissal; it was clearly an act of clear discrimination, insensibility or
disdain on the part of the petitioner.

The CA noted that jurisprudence prohibits transfers or reassignments of employees that are
unreasonable and that inconvenience or prejudice them. In this case, the CA found that the
respondent’s transfer from Dumaguete to Makati City was clearly unreasonable, inconvenient and
put him in the difficult predicament of choosing whether to live away from his family or to bring them
to Manila which will entail additional expenses on his part. The CA also found no compelling reason
(i.e. any urgency or genuine business necessity) to justify the petitioner’s order of transfer. The
petitioner’s stated reason about branch head training because of the respondent’s gross inefficiency
is unconvincing, since the petitioner failed to present any evidence that the latter had a record of
gross inefficiency. Finally, the CA opined that the petitioner failed to show any valid reason why it
had to require the respondent to go to Makati City to undergo branch head training when it could just
as easily require the latter to undergo the same training in the VISMIN area. Based on these
considerations, the CA concluded that the respondent’s resignation amounted to constructive
dismissal.

The present petition raises the following issues:

(1) Whether or not the petitioner is already estopped from raising the issue of lack of
jurisdiction;

(2) Whether or not the petitioner’s act of transferring the respondent to its head office in
Makati was a valid exercise of management prerogative; and

(3) Whether or not the respondent’s severance from employment was voluntary or was he
constructively dismissed.

We DENY the petition for lack of merit.

Petitioner is estopped from belatedly raising the issue of lack of jurisdiction

As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided
by the lower court will not be permitted to change theory on appeal.6 Points of law, theories, issues
and arguments not brought to the attention of the lower court need not be, and ordinarily will not be,
considered by a reviewing court, as these cannot be raised for the first time at such late stage. It
would be unfair to the adverse party who would have no opportunity to present further evidence
material to the new theory, which it could have done had it been aware of it at the time of the hearing
before the trial court.7 To permit the petitioner in this case to change its theory on appeal would thus
be unfair to the respondent, and offend the basic rules of fair play, justice and due process.8

In addition, the petitioner is already estopped from belatedly raising the issue of lack of jurisdiction
since it has actively participated in the proceedings before the LA and NLRC. We have consistently
held that while jurisdiction may be assailed at any stage, a party’s active participation in the
proceedings before a court without jurisdiction will estop such party from assailing such lack of it. It is
an undesirable practice of a party participating in the proceedings and submitting his case for
decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction,
when adverse.9 1avvphi1

The petitioner violated the non-forum shopping provision

The certificate of non-forum shopping was filed by the petitioner’s Legal Department Head, yet he
failed to present proper authority showing that the petitioner authorized him to file the petition
for certiorari. Coming from a major bank and from its Legal Department Head, this lapse cannot be
condoned and the CA was right in dismissing the petition for this reason, among others.

The petitioner was constructively dismissed

The settled rule is that factual findings of labor officials, who are deemed to have acquired expertise
in matters within their jurisdiction, are generally accorded not only respect but even finality by the
courts when supported by substantial evidence, i.e., the amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.10 In the present case, we find that
the NLRC’s finding, as affirmed by the CA, that respondent’s constructive dismissal is supported by
substantial evidence.

In constructive dismissal cases, the employer has the burden of proving that its conduct and action
or the transfer of an employee are for valid and legitimate grounds such as genuine business
necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer
must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the
employee. Failure of the employer to overcome this burden of proof taints the employee’s transfer as
a constructive dismissal.11

In the present case, the petitioner failed to discharge this burden. The NLRC, as affirmed by the CA,
correctly found that the combination of the harsh actions of the petitioner rendered the employment
condition of respondent hostile and unbearable for the following reasons:

First, the petitioner failed to show any urgency or genuine business necessity to transfer the
respondent to the Makati Head Office. In fact, the respondent showed the actual motivation and the
bad faith behind his transfer. The petitioner’s stated reason that the respondent had to undergo
branch head training because of his gross inefficiency cannot defeat the respondent’s evidence on
this point as the petitioner failed to present any evidence that the respondent had a record of gross
inefficiency.
Second, the respondent’s transfer from Dumaguete to Makati City is clearly unreasonable,
inconvenient and oppressive, since the respondent and his family are residents of Dumaguete City.
The CA correctly found that the respondent was placed in the very difficult predicament of having to
choose whether to live away from his family or to bring them to Manila, which will entail additional
expenses on his part.

Third, the petitioner failed to present any valid reason why it had to require the respondent to go to
Makati Head Office to undergo branch head training when it could have just easily required the latter
to undertake the same training in the VISMIN area.

Finally, there was nothing in the order of transfer as to what position the respondent would occupy
after his training; the respondent was effectively placed in a "floating" status. The petitioner’s
allegation that the respondent was assigned to a sensitive position in the DUHO Task Force is
suspect when considered with the fact that he was made to undergo branch head training which is
totally different from a position that entails reconciling book entries of all branches of the former.
Reconciling book entries is essentially an accounting task.

The test of constructive dismissal is whether a reasonable person in the employee’s position would
have felt compelled to give up his position under the circumstances.12 Based on the factual
considerations in the present case, we hold that the hostile and unreasonable working conditions of
the petitioner justified the finding of the NLRC and the CA that respondent was constructively
dismissed.

WHEREFORE, premises considered, we DENY the present petition and AFFIRM the Court of
Appeal’s Decision dated February 27, 2009 and Resolution dated July 16, 2009 in CA-G.R. SP No.
00708.

SO ORDERED.

G.R. No. 173774 January 30, 2012

MANILA ELECTRIC COMPANY, Petitioner,

vs.
MA. LUISA BELTRAN, Respondent.

DECISION

DEL CASTILLO, J.:

As the law regards workers with compassion, an employer’s right to discipline them should be
tempered with compassion as well. In line with this, the imposition of the supreme penalty of
dismissal is justified only when there are sufficient grounds as supported by substantial evidence.
This Petition for Review on Certiorari1 assails the November 25, 2005 Decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 67960, which granted the petition filed therewith, reversed the May
30, 2001 Decision3 of the National Labor Relations Commission (NLRC), and accordingly affirmed
the July 16, 1999 Decision4 of the Labor Arbiter ordering petitioner Manila Electric Company
(MERALCO) to reinstate respondent Ma. Luisa Beltran (Beltran) to her former position but without
payment of backwages. Likewise assailed is the CA Resolution5 dated July 19, 2006 which denied
the Motion for Reconsideration thereto.

Factual Antecedents

Beltran was employed by MERALCO on December 16, 1987. At the time material to this case, she
was holding the position of Senior Branch Clerk at MERALCO’s Pasig branch. While rendering
overtime work on September 28, 1996, a Saturday, Beltran accepted ₱15,164.48 from Collection
Route Supervisor Berlin Marcos (Marcos), which the latter received from customer Andy Chang
(Chang). The cash payment was being made in lieu of a returned check earlier issued as payment
for Chang’s electric bill. Beltran was at first hesitant as it was not part of her regular duties to accept
payments from customers but was later on persuaded by Marcos’ persistence. Hence, Beltran
received the payment and issued Auxiliary Receipt No. 879646 which she dated September 30, 1996,
a Monday, instead of September 28, 1996. This was done to show that it was an accommodation, an
accepted practice in the office. She thereafter placed the money and the original auxiliary receipt
and other documents pertinent to the returned check underneath her other files inside the drawer of
her table.

Beltran, however, was only able to remit Chang’s payment on January 13, 1997. Thus, in a
Memorandum7 dated January 16, 1997, she was placed under preventive suspension effective
January 20, 1997 pending completion of an investigation. MERALCO considered as
misappropriation or withholding of company funds her failure to immediately remit said payment in
violation of its Code on Employee Discipline. Investigation thereafter ensued.8

In her Sinumpaang Salaysay,9 Beltran admitted receipt of Chang’s payment of ₱15,164.48 on

September 28, 1996. She also admitted having issued an Auxiliary Receipt dated September 30,
1996 and having remitted the amount only on January 13, 1997, after her immediate supervisor,
Elenita L. Garcia (Garcia), called her attention about the payment and its non-remittance. Beltran
nevertheless explained the circumstances which caused the delay of the turn-over of Chang’s
payment. She recounted that on the day following her receipt of the money, she had a huge fight
with her husband which led to their separation; that on September 30, 1997, she reported at
MERALCO’s Taguig branch where she worked until 8:30 p.m.; and, that subsequent marital woes
coupled with her worries for her ailing child distracted her into forgetting Chang’s payment. Beltran
claimed that after Garcia approached her regarding the unremitted payment of Chang, she
immediately looked for the money in her drawer and right there and then handed it over to Garcia
together with the other pertinent documents. Beltran denied having personally used the money.

Garcia, the Administrative Supervisor of MERALCO’s Pasig branch, on the other hand, testified that
while doing an accounting of all outstanding returned checks sometime in December 1996, she
noticed that Chang’s returned check was missing. Upon further inquiry, she discovered that Chang
had already redeemed the returned check after paying ₱15,164.48 to Beltran, who in turn issued an
Auxiliary Receipt dated September 30, 1996. It was also discovered that the payment has not yet
been remitted. This prompted her to inquire from Beltran on January 7, 1997 about the supposed
payment and immediately ordered the remittance of the same. Beltran, however, failed to do so on
that day and even on the next day when she reported for work. Beltran subsequently went on leave
of absence on January 9 and 10, 1997. It was only on January 13, 1997 that the money with the
pertinent documents were handed over.10
In a memorandum11 dated February 25, 1997, the investigator found Beltran guilty of
misappropriating and withholding Chang’s payment of ₱15,164.48 and recommended her dismissal
from service thus:

For wil[l]fully, unlawfully and feloniously withholding and/or misappropriating for your personal
purposes or benefit electric bill payment of a Meralco customer, you have thereby violated Section 7
par. (1) of the Company Code on Employee Discipline which proscribes "(m)isappropriating, or
withholding, Company funds: penalized therein with dismissal from the service. Because of this act
of fraud and dishonesty, you have wil[l]fully breached the trust and confidence reposed in you by
your employer.

xxxx

Accordingly, Management is constrained to dismiss you for cause from the service and employ of
the Company, as you are hereby so dismissed effective 13 March 1997, with forfeiture of all rights
and privileges.12 (Emphasis supplied.)

By virtue thereof, Beltran was terminated effective March 13, 1997.13

Beltran filed a complaint for illegal dismissal14 against MERALCO. She argued that she had no
intention to withhold company funds. Besides, it was not her customary duty to collect and remit
payments from customers. She claimed good faith, believing that her acceptance of Chang’s
payment is considered goodwill in favor of both MERALCO and its customer. If at all, her only
violation was a simple delay in remitting the payment, which caused no considerable harm to the
company. Further, her nine years of unblemished service to the company should be taken into
account such that the penalty of dismissal is not a commensurate penalty for the unintentional act
committed.

MERALCO, on the other hand, maintained that under company policy, Beltran had the duty to remit
payment for electric bills by any customer on the day the same was received. It opined that if indeed
the money was kept intact inside the drawer and was not put to personal use, Beltran could have
easily turned over the same when Garcia instructed her to do so on January 7, 1997. However,
Beltran failed to remit the money on said date and even on the following day, January 8, when she
reported for work. Worse, in the two succeeding days, she went on leave. Thus, there was a clear
sign of misappropriation of company funds, considered a serious misconduct and punishable by
dismissal from the service. Further, Beltran’s reason for her failure to perform such obligation on
account of family problems deserves scant consideration. MERALCO insisted that Beltran’s act
renders her unworthy of the trust and confidence demanded of her position.

Ruling of the Labor Arbiter

In a Decision15 dated June 16, 1999, the Labor Arbiter regarded the penalty of dismissal as not
commensurate to the degree of infraction committed as there was no adequate proof of
misappropriation on the part of Beltran. If there was delay in Beltran’s remittance of Chang’s
payment, it was unintentional and same cannot serve as sufficient basis to conclude that there was
misappropriation of company funds. In fact, Beltran did not even attempt to deny possession of, or
refuse to hand in, the money. The Labor Arbiter thus gave compassionate consideration for the
neglect to remit the money promptly, stating that it is excusable for Beltran to commit lapses in her
work due to serious family difficulties. While the Labor Arbiter commiserated with Beltran’s
circumstances and took into account her long and untainted service, he nonetheless imposed
disciplinary action in the form of forfeiture of salary for her neglect in remitting the funds at once. The
dispositive portion of his Decision reads as follows:
IN THE LIGHT OF THE FOREGOING, the respondent is hereby ordered to reinstate the
complainant to her former position without backwages. The forfeiture of backwages should be an
equitable penalty for the delay in the remittance of company funds.

SO ORDERED.16

Ruling of the National Labor Relations Commission

Upon appeal, the NLRC reversed the Labor Arbiter’s Decision and dismissed Beltran’s complaint
against MERALCO in its Decision17 dated May 30, 2001. It found that Beltran withheld company
funds by failing to remit it for almost four months. It disregarded Beltran’s assertion of family
problems as the same cannot be used as an excuse for committing a serious misconduct in violation
of the trust reposed on her as a Senior Branch Clerk. The NLRC was convinced that Beltran used
the money for her personal needs since her act of taking a leave of absence right after her
confrontation with Garcia suggested that she needed time to produce it. The NLRC thus ruled that
MERALCO validly dismissed Beltran from the service in the exercise of its inherent right to discipline
its employees.

In her Motion for Reconsideration,18 Beltran attributed grave abuse of discretion on the part of the
NLRC in basing its conclusions on mere inferences and presumptions. Beltran argued that she could
not be guilty of withholding Chang’s payment, much more, misappropriating it. She alleged that
Garcia did not order her to remit the money on January 7, 1997 or on the following day. Further,
records reveal that she was on leave from January 9 to 10 to attend to her child who was suffering
from asthma. And since January 11 and 12 are Saturday and Sunday, she deemed it appropriate to
make the remittance on the following Monday, January 13, 1997. Garcia, however, refused to accept
the money, saying that she already committed withholding of company funds.

The NLRC denied Beltran’s Motion for Reconsideration.19

Ruling of the Court of Appeals

When Beltran brought the case to the CA via a Petition for Certiorari,20 the NLRC’s ruling was
reversed. The CA instead agreed with the findings of the Labor Arbiter that there were no serious
grounds to warrant Beltran’s dismissal. The CA held that the penalty of dismissal is harsh
considering the infraction committed and Beltran’s nine years of unblemished service with
MERALCO. It held that Beltran’s mere failure to remit the payment was unintentional and not
attended by any ill motive and that her excuse for the inadvertence was reasonable. As such, the CA
affirmed the ruling of the Labor Arbiter ordering MERALCO to reinstate Beltran to her former position
but with the forfeiture of her salary as an equitable penalty for her negligence. Thus, in its
Decision21 dated November 25, 2005, the petition was resolved as follows:

WHEREFORE, premises considered, the instant petition is hereby GRANTED. The x x x Decision
dated May 30, 2001 and the Resolution dated August 22, 2001 of the National Labor Relations
Commission are hereby REVERSED. ACCORDINGLY, the Decision of the Labor Arbiter dated June
16, 1999, is hereby AFFIRMED.

SO ORDERED.22

In a Resolution23 dated July 19, 2006, MERALCO’s Motion for Reconsideration was denied by the
CA. Hence, MERALCO filed this present Petition for Review on Certiorari, raising the lone issue of
whether –
 Issue

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE

REINSTATEMENT OF [BELTRAN] DESPITE THE UNDISPUTED FINDING THAT SHE IS GUILTY
OF WITHHOLDING x x x COMPANY FUNDS.24

Our Ruling

MERALCO insists that there was convincing basis to dismiss Beltran from employment. While there
was no concrete proof of misappropriation, the fact that there was withholding of company funds
remains undisputed. This act of negligence by Beltran in the performance of her duties has resulted
to the loss of trust and confidence reposed on her, notwithstanding her self-serving allegations of
marital woes and family difficulties, which were not even corroborated by any clear evidence.

We do not agree. On the contrary, we support the CA’s finding that there are no sufficient grounds to
warrant Beltran’s dismissal.

For loss of trust and confidence to be a valid ground for dismissal, it must be based on a willful
breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. In addition, loss of trust and confidence must rest on
substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion. 25

In the case at bench, Beltran attributed her delay in turning over Chang’s payment to her difficult
family situation as she and her husband were having marital problems and her child was suffering
from an illness. Admittedly, she was reminded of Chang’s payment by her supervisor on January 7,
1997 but denied having been ordered to remit the money on that day. She then reasoned that her
continued delay was caused by an inevitable need to take a leave of absence for her to attend to the
needs of her child who was suffering from asthma.

It should be emphasized at this point that the burden of proving the legality of an employee’s
dismissal lies with the employer.26 "Unsubstantiated suspicions, accusations, and conclusions of
employers do not provide legal justification for dismissing employees."27 "[M]ere conjectures cannot
work to deprive employees of their means of livelihood."28 To begin with, MERALCO cannot claim or
conclude that Beltran misappropriated the money based on mere suspicion. The NLRC thus erred in
concluding that Beltran made use of the money from the mere fact that she took a leave of absence
after having been reminded of the unremitted funds. And even if Beltran delayed handing over the
funds to the company, MERALCO still has the burden of proof to show clearly that such act of
negligence is sufficient to justify termination from employment. Moreover, we find that Beltran’s delay
does not clearly and convincingly establish a willful breach on her part, that is, which is done
"intentionally, knowingly and purposely, without any justifiable excuse." True, the reasons Beltran
proffered for her delay in remitting the cash payment are mere allegations without any concrete
proof. Nonetheless, we emphasize that as the employer, the burden still lies on MERALCO to
provide clear and convincing facts upon which the alleged loss of confidence is to be made to rest.

Undoubtedly, Beltran was remiss in her duties for her failure to immediately turn over Chang’s
payment to the company. Such negligence, however, is not sufficient to warrant separation from
employment. To justify removal from service, the negligence should be gross and habitual.29 "Gross
negligence x x x is the want of even slight care, acting or omitting to act in a situation where there is
duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to
consequences insofar as other persons may be affected."30 Habitual neglect, on the other hand,
connotes repeated failure to perform one’s duties for a period of time, depending upon the
circumstances.31No concrete evidence was presented by MERALCO to show that Beltran’s delay in
remitting the funds was done intentionally. Neither was it shown that same is willful, unlawful and
felonious contrary to MERALCO’s finging as stated in the letter of termination it sent to
Beltran.32 Surely, Beltran’s single and isolated act of negligence cannot justify her dismissal from
service.

Moreover, Beltran’s simple negligence did not result in any loss. From the time she received the
payment on September 28, 1996 until January 7, 1997 when she was apprised by her supervisor
about Chang’s payment, no harm or damage to the company or to its customers attributable to
Beltran’s negligence was alleged by MERALCO. Also, from the time she was apprised of the non-
remittance by her superior on January 7, 1997, until the turn-over of the amount on January 13,
1997, no such harm or damage was ever claimed by MERALCO. 1âwphi1

Under the circumstances, MERALCO’s sanction of dismissal will not be commensurate to Beltran’s
inadvertence not only because there was no clear showing of bad faith and malice but also in
consideration of her untainted record of long and dedicated service to MERALCO.33 In the similar
case of Philippine Long Distance Telephone Company v. Berbano, Jr.,34 we held that:

The magnitude of the infraction committed by an employee must be weighed and equated with the
penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of
dismissal or termination from the service. The employer should bear in mind that in termination
cases, what is at stake is not simply the employee’s job or position but [her] very livelihood.

Where a penalty less punitive would suffice, whatever missteps may be committed by an employee
ought not to be visited with a consequence so severe such as dismissal from employment.35 Hence,
we find no reversible error or any grave abuse of discretion on the part of the CA in ordering
Beltran’s reinstatement without backwages. The forfeiture of her salary is an equitable punishment
for the simple negligence committed.

WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated November 25, 2005
and Resolution dated July 19, 2006 in CA-G.R. SP No. 67960 are AFFIRMED.

SO ORDERED.

G.R. No. L-34974 July 25, 1974

P. A. ALMIRA, P. M. AMURAO, J. R. ANGELES, R. N. BADIOLA, LILIA R. BAUTISTA, G. B.

LAIZ, N. A. CANLAS, C. S. DE CASTRO, C. V. CELIS, JR., A. M. DIONISIO, V. S. ESPIRITU, E.
S. GUERRERO, J. R. GUTIERREZ, E. HERMIDA, M. O. LORENZO, R. S. MARQUEZ, C. G.
PAISO, C. DELA PAZ, O. RABULAN, A. C. SALCEDO, C. P. SAN JUAN, D. T. SULIT, I. F. UY,
FELIX BAYANI LOPEZ, GERRY DOMINGO, Z. DACLISON, A. PANGINDIAN, T. F. PESTANO, P.
FULGAR, BEATRIZ M. LACSON, EROL A. SUGUITAN, ROSALIE O. ROMERO, AMADOR S.
JALOSJOS, R. G. ARTEFICIO, M. R. BARTOLOME, MANUEL BASILIA, SYLVIA CAGUIOA,
REBECCA DELA CRUZ, ROGELIO I. CRUZ, LIGAYA A. DURAN, ENRIQUE GALIERO, ANNA T.
GAMBOA, FELIPE LLAVORE ARSENIO A. MENDOZA, JUSTO MUEDEN, STALINITA QUIJANO,
PATRICIA RODRIGUEZ, ALLINAS P. ALBINDA, RUBEN A. ANTONIO, HERMINIA CANDO,
NICOLAS CRUZ, TEREZA A. CRUZ, ANGELES Q. DELA CRUZ, DANIEL F. BAGUIO, MARCIAL
DE LA LUPO, C. DE CASTRO, AMELIA R. CEDRO ISLA, ANDRES LACSAMANA, JOSE S.
SIENA, ROLANDO S. JOSE, GERFE P. LOHO, BERNARDO MARTINEZ, GONZALO MORALES,
DIONISIO T. ONG, AUGUSTO SANCHEZ, MANUEL V. TIBAY, MANUEL ALMENDRALA, E. V.
FRANCIA, CARMELO CAPARROS, ROQUE DUMAGUING, F. P. ESPIRITU, G. I. MANANSALA,
CARLOS SANTOS, FELITO E. CABANGON, ANGEL TICSAY, ROBERTO FORMELOZA,
ROMEO GONZALES, and FLORENCIO MARQUEZ, petitioners,
vs.
B. F. GOODRICH PHILIPPINES, INC., COURT OF INDUSTRIAL RELATIONS and HONORABLE
JOAQUIN SALVADOR, respondents.

Domingo E. de Lara & Associates for petitioners.

Manuel O. Chan for private respondent. Jose K Manguiat, Jr. for respondent Court.

FERNANDO, J.:p

What is readily apparent in this appeal from a decision of respondent Court of Industrial Relations, declaring a strike illegal because of the
means employed, and dismissing petitioners, was the high pitch of bitterness that marked the relationship between labor and management in
the establishment of private respondent, B. F. Goodrich Philippines, Inc. Even a cursory reading of the records will make evident that on both
sides, there was the feeling that the other party was guilty of conduct the most reprehensible resulting in the flagrant disregard of its rights.
With such a background, there was a greater need for objectivity in the application of the authoritative legal norms to the facts as found. It
cannot be said that respondent Court, more precisely respondent Joaquin Salvador, then the Judge whose order is now on appeal, was fully
cognizant that such should be the case.1 It is hard not to lend credence to the contention of petitioners that there was undue receptivity to the
claim of private respondent, no doubt induced by the skill, competence, and resourcefulness of its counsel, Atty. Manuel Chan. It was
unfortunate that in some of the crucial stages of the controversy, petitioners did not have the same advantage. 2 Nonetheless, as will be
shown, the strike could have been viewed with a little less disapproval and even if declared illegal, need not have been attended with such a
drastic consequence as termination of employment relationship. This last point is even more compelling considering the security of tenure
which is one of the notable features in the present Constitution.3

The facts according to the appealed order follow: "As to the conduct of the strike and the picketing,
this Court's Order of July 1, 1971 has fully described the same. In the course of the mass picketing,
illegal and unlawful acts were committed by the respondents such as physically blocking and
preventing the entry of complainant's customers, supplies and other employees who were not on
strike, both in complainant's premises in Makati and Marikina, Rizal. Injuries likewise were inflicted
on certain employees of complainant. Such acts of violence and intimidation appear to be of such a
widespread nature so as to create an impression that there is a common pattern of action set into
motion by the respondents. The actuations of respondents are likewise illegal. In the premises of
complainant at Makati, Rizal, the respondents who picketed the same on April 20, 1971 were
identified ... . Similarly, some of the respondents who picketed the Marikina premises of
complainants were identified ....4 Further: 'The complainant caused the publication of notices in both
the Manila Times and Daily Mirror, newspapers of general and wide circulation ... for all employees
not participating in the illegal strike to report for work on or before April 23, 1971, otherwise such
failure will be considered as participation therein. Such notices were accompanied by instructions to
personnel at all levels on how reporting for work will be accomplished, considering the precarious
situation in relation to the safety of employees brought about by the strike of respondents. With
respect to this particular aspect, certain of the respondents who were not seen in the picket line on
or before April 23, 1971 were identified as having failed to report for work ... . It would appear,
however, that these listed respondents who failed to report for work likewise were seen picketing the
premises of complainant after April 26, 1971, ... ."5 Then came this portion: "It would seem that the
picketing by respondents has continued up [to] the present under the same pattern of coercive
activities narrated in our Order Of July 1, 1971. Physical injuries where inflicted on complainants
personnel manager. Mass picketing with the employment of intimidatory statements have again
started on January 3, 1972. The roof of the complainants Makati Recap Plant was set on fire on
January 13, 1972 ..."6

Based on the above facts, it was in the appealed order of Judge Salvador; "On the basis, therefore,
of the motivation as well as the conduct of the strike, the respondent are declared to have committed
an illegal strike, which is likewise an unfair labor practice"7 As consequence, in the dispositive
portion, petitioner where "declared to have lost their status of employees of the complainant
corporation as of April 19, 1971"8 The appealed order was handed down on February 4, 1972. Had
greater awareness been displayed to the approach followed by this court in a 1968 decision, Cebu
Portland Cement Co. v. Cement Workers Union,9 as well as to Shell Oil Workers' Union v. Shell Co.
of the Philippines, Ltd. 10 there would have been less certitude displayed in the opinion of Judge
Salvador as to the correctness of its decision. Moreover, as stated at the outset, if there be
deference to what of late has been so evident, even on the assumption of the illegality of the strike,
there need not be the automatic termination of the employment relationship, especially so in view of
the command of the present Constitution as to the security of tenure.

1. It is understandable why respondent Judge Salvador was unsympathetic to a strike in which

petitioners participated, considering the pendency of a certification election, just because
management would not consider their union as the exclusive collective bargaining representative. At
the very least, it was premature. Nonetheless, there was this commendable admission in the
appealed order of Judge Salvador; "Lest we be miscontrued, the ilegality of the strike for recognition
as general proposition is not absolute. We declare such strike illegal on the basis of the attendant
circumstances in this case." 11 It mentioned the attendant circumstances, but as was apparent in an
earlier portion of such order, what respondent Judge apparently could not resist was the compelling
force of what by now should be an outmoded view of a strike being "by its very nature ... coercive ...
." 12 To display such a predisposition is to ignore the leading case of Cebu Portland Cement Co. v.
Cement Workers Union. 13 For, as was therein pointed out, the ruling in National Labor Union, Inc. v.
Philippine Match Factory 14 to the effect that a strike "is an economic weapon at war with the policy of
the Constitution and the law," resort to which "is not, in plain terms, outlawed," 15although certainly
discouraged, is obsolete, for as was so clearly pointed out by Justice J. B. L. Reyes in Cebu
Portland Cement Co. v. Cement Workers Union: 16 "For a time, decisions on the issue under
consideration were characterized by strict adherence to the ruling in the Philippine Match Factory
Case." 17 Further, it was stated by him: "The actual break-away from the doctrine laid down in the
Philippine Match Factory case came in Dinglasan v. National Labor Union, when the discretionary
power of the Court of Industrial Relations to grant affirmative relief was recognized. ... Thereafter,
the doctrine enunciated in Interwood Employees Association ... that good faith of the strikers in the
staging of the strike is immaterial in the determination of the legality or illegality of the strike, was
abandoned. In the case of Ferrer v. CIR, et al. the belief of the strikers that the management was
committing unfair labor practice was properly considered in declaring an otherwise premature strike,
not unlawful, and in affirming the order of the Labor Court for the reinstatement without back wages
of said employees." 18 This 1968 decision of this Court, if present in the consciousness of respondent
Judge Salvador, certainly could have caused, at the very least, a hesitancy on his part to declare the
strike illegal. This is not to deny that the labor union ought not to have declared a strike under such
circumstances, but at least, while premature, it could have been plausibly viewed as inspired by
good faith, although perhaps not guided by sound legal advice.

2. What was set forth in the facts as found by respondent Judge Salvador would indicate that it was
during the picketing, certainly not peaceful, that the imputed acts of violence did occur. It cannot be
ignored, however, that there were injuries on both sides because management did not,
understandably, play a passive role confronted as it was with the unruly disruptive tactics of labor.
This is not, by any means, to condone activities of such character, irrespective of the parties
responsible. It is merely to explain what cannot be justified. Nonetheless, did the acts in question call
for an automatic finding of illegality? Again, the order issued on February 4, 1972 appeared to be
oblivious of a 1971 decision of this Court, Shell Oil Workers' Union v. Shell Company of the
Philippines, Ltd. 19 There it was clearly held: "A strike otherwise valid, if violent in character, may be
placed beyond the pale. Care is to be taken, however, especially where an unfair labor practice is
involved, to avoid stamping it with illegality just because it is tainted by such acts. To avoid rendering
illusory the recognition of the right to strike, responsibility in such case should be individual and not
collective. A different conclusion would be called for, of course, if the existence of force while the
strike lasts is pervasive and widespread, consistently and deliberately resorted to as a matter of
policy. It could be reasonably concluded then that even if justified as to ends, it becomes illegal
because of the means employed. 20 It must be pointed out likewise that the facts as there found
would seem to indicate a greater degree of violence. Thus: "Respondent Court must have been
unduly impressed by the evidence submitted by the Shell Company to the effect that the strike was
marred by acts of force, intimidation and violence on the evening of June 14 and twice in the
mornings of June 15 and 16, 1967 in Manila. Attention was likewise called to the fact that even on
the following day, with police officials stationed at the strike-bound area, molotov bombs did explode
and the streets were obstructed with wooden planks containing protruding nails. Moreover, in the
branches of the Shell Company in Iloilo City as well as in Bacolod, on dates unspecified, physical
injuries appeared to have been inflicted on management personnel. Respondent Court in the
appealed decision did penalize with loss of employment the ten individuals responsible for such acts.
Nor is it to be lost sight of that before the certification on June 27, 1967, one month had elapsed
during which the Union was on strike. Except on those few days specified then, the Shell Company
could not allege that the strike was conducted in a manner other than peaceful. Under the
circumstances, it would be going too far to consider that it thereby became illegal." 21 Then, mention
was made of a decision "in Insular Life Assurance Co., Ltd. Employees' Association v. Insular Life
Assurance Co., Ltd. [where] there is the recognition by this Court, speaking through Justice Castro,
of picketing as such being 'inherently explosive.' It is thus clear that not every form of violence
suffices to affix the seal of illegality on a strike or to cause the loss of employment by the guilty
party." 22

There was in that case a concurring opinion by Justice Barredo which elicited the approval of the
present Chief Justice. Thus: "All these, however, do not mean, on the other hand, that petitioner's
strike should necessarily be held to be illegal. It is always a wholesome attitude in cases of this
nature to give but secondary importance to strict technicalities, whether of substantive or remedial
law, and to constantly bear in mind the human values involved which are beyond pecuniary
estimation. 23

It would seem, therefore, to reiterate a point, that on the date of the appealed order of February 4,
1972, a less condemnatory attitude to the appearance of violence as such was part of the law of the
land. It is to be admitted that this is one of those close cases. What is merely emphasized is that the
imputation of illegality on the ground of the means employed is not automatically called for.

3. This is not to say that the appealed order is totally bereft of support in law. It is merely to point out
that the facts as found did not point automatically and unerringly to so severe a result, namely the
dismissal of petitioners. From a perspective more attuned to the trend indicated in current decisions
of this Court, the three cited cases being representative, the conclusion reached could have been
cast in a different mold. In labor law, as in constitutional law, it is no doubt true that the issues
submitted, in the language of Justice Malcolm, may be "determined by the court's approach to
them." 24 It is submitted that the direction indicated in the express language of both the 1935 and the
present Constitution, is that which leads to protection to labor. 25

As previously noted, both petitioners and private respondent were guilty of practices far from
peaceful in character. The original blame must of course be assumed by petitioners, for they ought
to have known that the picketing that comes within the protection of the free speech guarantee is
one that is peaceful. It involves people marching to and fro with placards to acquaint the public with
the facts of a labor dispute. So it has been ruled from Mortera v. Court of Industrial Relations 26 a
1947 decision, to Chan Bros., Inc. v. Federacion Obrera de la Industria Tabaquera y Otros
Trabajadores de Filipinas 27 decided in January of this year. When they obstructed entrance into the
premises of private respondent, they ought to have known that they were inviting reprisal. It has
been observed of course that in labor controversies the unstructured incoherencies of vehement
protest for grievances, sincerely even if erroneously felt, may easily flare up into rowdy conduct. So it
did come about. The appealed order took note of the resulting melee. From the standpoint of settling
a dispute, it would not suffice just to visit recriminations on either or both parties. The more crucial
question is what to do next.

We start with the circumstances that ought to be considered. To repeat, the breach of the peace,
though started by petitioners, was not solely their responsibility as it turned out. For criminal charges
and counter charges were filed by one group against the other. The reply brief of private respondent,
submitted on March 8, 1973, included a memorandum from a certain Attorney Rolando A. Velasco,
speaking of the status of the criminal cases filed by the group of petitioners against management
men, 28 , and of thirteen criminal cases as well as complaints against at least thirty individuals
identified with private respondent. 29 In some of them the complainants did not press charges, and
the cases were dismissed. With the submission of such data, its objection to the admission of
information similar in character as to the status of the criminal cases against petitioners loses weight.
What is more, it does not appear as of this date as to who of the petitioners were found guilty of what
was referred to it in the Shell opinion as committing serious acts of violence. As a matter of fact, the
appealed order merely referred to the instances of picketing conducted illegally without specifically
pin-pointing the culprits to whom such kind of conduct could be ascribed. It would seem therefore,
that the wholesale dismissal of petitioners is far from warranted. It is to be admitted though that on a
showing of having engaged in non-peaceful activities of a serious character, the right to re-
admission is defeated.

This conclusion is further fortified by the stress on the security of tenure that is a notable feature of
the present Constitution. As pointed out in a decision rendered only last month, Philippine Airlines,
Inc. v. Philippine Air Lines Employees Association: 30 "The futility of this appeal becomes even more
apparent considering the express provision in the Constitution already noted, requiring the State to
assure workers 'security of tenure.' It was not that specific in the 1935 Charter. The mandate was
limited to the State affording protection to labor, especially to working women and minors, ....

... That is to conform to the ideal of the New Society, the establishment of which was
to felicitously referred to by the First Lady as the Compassionate Society. 31 To the
possible objection that in this Philippine Air Lines case, there was an order of
reinstatement, it suffices by way of an answer that while the facts could be
distinguished, the basic principle in accordance with a constitutional mandate, in the
language of Justice Cardozo, speaks with a reverberating clang that drowns all
weaker sounds.

It would imply at the very least that where a penalty less punitive would suffice, whatever missteps
may be committed by labor ought not to be visited with a consequence so severe. It is not only
because of the law's concern for the workingman. There is, in addition, his family to consider.
Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. The
misery and pain attendant on the loss of jobs then could be avoided if there be acceptance of the
view that under all the circumstances of this case, petitioners should not be deprived of their means
of livelihood. Nor is this to condone what had been done by them. For all this while, since private
respondent considered them separated from the service, they had not been paid. From the strictly
juridical standpoint, it cannot be too strongly stressed, to follow Davis in his masterly work,
Discretionary Justice, 32 that where a decision may be made to rest an informed judgment rather than
rigid rules, all the equities of the case must be accorded their due weight. Finally, labor law
determinations, to quote from Bultmann, should be not only secundum rationem but also secundum
caritatem.

4. This is all that needs to be said except to remind petitioners that the basic doctrine underlying the
provisions of the Constitution so solicitous of labor as well as the applicable statutory norms is that
both the working force and management are necessary components of the economy. The rights of
labor have been expanded. Concern is evident for its welfare. The advantages thus conferred,
however, call for attendant responsibilities. The ways of the law are not to be ignored. Those who
seek comfort from the Shelter that it affords should be the last to engage in activities which negate
the very concept of a legal order as antithetical to force and coercion. What is equally important is
that in the steps to be taken by it in the pursuit of what it believes to be its rights, the advice of those
conversant with the requirements of legal norms should be sought and should not be ignored. It is
even more important that reason and not violence should be its milieu.

WHEREFORE, the appealed order of February 4, 1972 as affirmed in a resolution of March 14, 1972
is reversed and set aside. Petitioners against whom no criminal charges filed in relation to their acts
referred to in this decision are still pending are ordered reinstated to their employment, with the right
to backpay corresponding to eighteen (18) months, at the respective rates of compensation they
were being paid on February 4, 1972, without any deduction corresponding to any possible income
earned elsewhere since their dismissal to the present. Those petitioners against whom criminal
complaints have been filed shall be reinstated, with the right to backpay as herein indicated, only
upon the final dismissal of said cases or their acquittal therein. Respondent Court is hereby ordered
to implement this decision as expeditiously as possible. No costs.

G.R. No. 130957 January 19, 2000

VH MANUFACTURING, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and HERMINIO C. GAMIDO, respondents.

DE LEON, JR., J.:

Before us is a petition for certiorari, under Rule 65 of the Rules of Court, seeking to annul the
Decision1 and the Order2 of the National Labor Relations Commission (NLRC), First Division, dated
February 27, 1997 and August 14, 1997, respectively, which set aside the Decision3 dated June 20,
1996 of the Labor Arbiter. Essentially, public respondent found and declared that the petitioner's
allegation that private respondent slept on the job on February 10, 1995 was not proven and, as a
result, there was no just and valid cause for his dismissal, and that even if there was, the penalty of
dismissal was too harsh a punishment for violation of petitioner's Company Rule 15-b. 1âwphi 1.nêt

The facts of the case are the following:

Since November 5, 1985 private respondent was employed in petitioner's, business of

manufacturing liquefied petroleum gas (LPG)
cylinders.4 He served as a quality control inspector with the principal duty of inspecting LPG cylinders
for any possible defects and earning P155.00 a day.5 His service with the company was abruptly
interrupted on February 14, 1995, when he was served a notice of termination of his employment.6

His dismissal stemmed from an incident on February 10, 1995 wherein petitioner's company
President, Alejandro Dy Juanco, allegedly caught private respondent sleeping on the job.7 On that
same day, private respondent was asked through a written notice from the petitioner's Personnel
Department8 to explain within twenty-four (24) hours why no disciplinary action should be taken
against him for his violation of Company Rule 15-b9 which provides for a penalty of separation for
sleeping during working hours. Without delay, private respondent replied in a letter which reads:

Sir, ipagpaumanhin po ninyo kung nakapikit ako sa aking puwesto dahil hinihintay ko po ang
niliha hi Abreu para i quality pasensiya na po kung hindi ko po namalayan ang pagdaan
ninyo dahil maingay po ang painting booth.10

Notwithstanding his foregoing reply, he was terminated.11

Feeling aggrieved, private respondent initially instituted on April 26, 1995 a criminal suit for Estafa,
for alleged withholding of his salary, against the company President, Alejandro Dy Juanco.12 Said
complaint was dismissed on June 22, 1995 for improper forum.13 He then filed on July 4, 1995 a
complaint for illegal dismissal, praying for reinstatement to his position as quality control
inspector.14 On June 20, 1996, Labor Arbiter Ricardo C. Nora rendered his decision upholding
petitioner's position and declared that private respondent's dismissal is anchored on a valid and just
cause and the latter's contention of denial of due process as devoid of merit.15

Private respondent then appealed the decision of the Labor Arbiter to the public respondent NLRC
where it was assigned to the First Division. The NLRC reversed the decision of the Labor Arbiter and
ordered herein petitioner to reinstate private respondent with full backwages less one-month
pay.16 Inasmuch as public respondent in its Order dated August 14, 1997 denied petitioner's motion
for reconsideration17 , petitioner now challenges the correctness of the NLRC's decision and order via
the instant petition.

Petitioner anchors its petition on two (2) grounds, to wit:

1. THE NLRC GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT GAMIDO'S

DISMISSAL WAS NOT ANCHORED ON A JUST AND VALID CAUSE.

2. THE NLRC GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT DISMISSAL WAS
TOO HARSH A PENALTY FOR GAMIDO'S VIOLATION OF COMPANY RULE 15-b.18

The instant petition must fail.

First. Basically, the reason cited for the dismissal of private respondent is sleeping on the job in
violation of Company Rule 15-b. Was the private respondent sleeping on the job or was he merely
idle and, as he claimed, waiting for the next cylinder to be checked? Evidence on this score is
material, for it is the be-all and end-all of petitioner's cause, in view of the gravity of the penalty of
separation, as provided by the Company Rules and Regulation. In termination disputes, the burden
of proof is always on the employer to prove that the dismissal was for a just and valid cause.19 What
is at stake here is not only the job itself of the employee but also his regular income therefrom which
is the means of livelihood of his family.
A thorough review of the record discloses that, contrary to the findings of the Labor Arbiter,
petitioner's claim that private respondent slept on the job on February 10, 1995 was not
substantiated by any convincing evidence other than the bare allegation of petitioner. The report20 of
Ronaldo M. Alvarez, Acting Quality Control Department Head of petitioner corporation, on the
circumstances which ultimately served as basis for the termination of private respondent's
employment, did not confirm the alleged violation by private respondent of the pertinent Company
Rule 15-b. The report merely stated private respondent's denial and response to petitioner's
allegation which he reiterated in his written reply.21

Second. Petitioner's reliance on the authorities22 it cited that sleeping on the job is always a valid
ground for dismissal, is misplaced. The authorities cited involved security guards whose duty
necessitates that they be awake and watchful at all times inasmuch as their function, to use the
words in Luzon Stevedoring Corp. v. Court of Industrial Relations,23 is "to protect the company from
pilferage or loss." Accordingly, the doctrine laid down in those cases is not applicable to the case at
bar.

Third. While an employer enjoys a wide latitude of discretion in the promulgation of policies, rules
and regulations on work-related activities of the employees, those directives, however, must always
be fair and reasonable, and the corresponding penalties, when prescribed, must be commensurate
to the offense involved and to the degree of the infraction. In the case at bar, the dismissal meted
out on private respondent for allegedly sleeping on the job, under the attendant circumstances,
appears to be too harsh a penalty,24 considering that he was being held liable for first time, after nine
(9) long years of unblemished service, for an alleged offense which caused no prejudice to the
employer, aside from absence of substantiation of the alleged offense. The authorities cited by
petitioner are also irrelevant for the reason that there is no evidence on the depravity of
conduct,25 willfulness of the disobedience,26 or conclusiveness of guilt on the part of private
respondent.27 Neither was it shown that private respondent's alleged negligence or neglect of duty, if
any, was gross and habitual.28 Thus, reinstatement is just and proper.

WHEREFORE, the petition is hereby DISMISSED, and the challenged Decision and Order of public
respondent NLRC are AFFIRMED. No pronouncement as to costs. 1âwphi 1.nêt

SO ORDERED.

G.R. No. 158703 June 26, 2009

TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES TEACHERS and EMPLOYEES

ORGANIZATION (TIPTEO) and its member MAGDALENA T. SALON, Petitioners,
vs.
THE HON. COURT OF APPEALS and TECHNOLOGICAL INSTITUTE OF THE
PHILIPPINES, Respondents.

DECISION

BRION, J.:
Before this Court is the petition for review on certiorari1 challenging the Amended Decision dated
May 22, 2003 of the Court of Appeals (CA) in the case Technological Institute of the Philippines v.
Technological Institute of the Philippines Teachers and Employees Organization, CA G.R. SP No.
66896.2

THE FACTUAL BACKGROUND

The facts of the case, set out in the original CA decision promulgated on November 20, 2002,3 are
summarized below.

Petitioner Magdalena T. Salon (Salon) was a College Instructor 3 of the Humanities and Social
Science Department (HSSD) of respondent Technological Institute of the Philippines (TIP) and a
member of the Technological Institute of the Philippines Teachers and Employees Organization
(TIPTEO). She commenced employment with the TIP on June 13, 1989.

On October 24, 2000, the TIP received complaints from students claiming that Salon was collecting
₱1.50 per page for the test paper used in the subject she was teaching at the time. She reportedly
asked her students not to write on the test papers; these test papers were not returned to the
students after the test. An allegation was made, too, that Salon committed an anomaly in the grading
of her students.

Acting on the written complaints, the TIP – through Ms. Josephine Royer (Ms. Royer), the school's
Assistant Faculty Coordinator – sent Salon a memorandum dated October 30, 2000 asking her to
explain within 72 hours why she should not be disciplined on the basis of the complaints.4

Salon answered the charges on October 31, 2000.5 She explained that she collected only ₱0.50 for
each page of the test papers, which sum she spent in photocopying the papers; the amount
collected was within the limits the school had set. She admitted that she asked her students not to
write on the test papers because there was no space on these papers where they could write their
answers; it would be preferable to use the test booklets also provided to the students.

On the alleged grade manipulation, Salon explained that the incident involved the son of a fellow
faculty member who actually failed her subject. Her fellow faculty member and mother of the student,
upon learning of her son's failing grade, tried to persuade Salon to give her son a passing grade for
fear that the father, if he learned of the failing mark, would harm his son. Salon claimed that she did
not accede to the request; she gave the student a grade of 6.0 or "dropped" instead of giving him a
grade of 5.0 or "failed."

The TIP created a three-man committee to conduct a formal investigation of the charges.6 The
committee called a hearing on November 16, 2000 and issued the following findings:7

Recommendation:

1. Evidences (sic) show that Ms. M.T. Salon has changed the grade of Mr. Joseph Florante
Manalo. She disregarded the TIP grading system when she gave a grade of 6.0 (officially
dropped) inspite of the class performance records. She admitted that the grade is 5.0 (failed)
but made it 6.0 (officially dropped) which according to her is 'lesser degree of failure'
because Mr. Joseph Florante Manalo, is the son of a co-faculty, Mrs. Elma Manalo in HSSD.
She also changed the entry in the class record. The class record was already submitted to
TIP so that this is already a TIP document.
 2. With regards to the printed test questionnaires, Mrs. M.T. Salon has violated
Memorandum No. P-66 SY 1992-1993 by not getting the approval of the department officer.
It is unauthorized selling which the General Disciplinary Sanctions (Memorandum No. P-2 s.
1999-2000) classifies as a GRAVE offense.

3. The committee recommends the application of the corresponding sanction as contained in

the General Disciplinary Sanctions (Memo No. P-3 s. 1999-2000) which is dismissal.

4. The recommendation shall take effect only after the approval of the President.

On December 4, 2000, the office of TIP President Dr. Teresita U. Quirino notified Salon of the
termination of her service as member of the faculty of HSSD effective thirty (30) days from receipt of
the notice.8 The dismissal was based on the investigation committee's recommendations.

Salon sought assistance from TIPTEO which then requested the TIP that a joint grievance
investigation be conducted to take up her dismissal. The TIP denied the request arguing that Salon's
dismissal was not proper for the grievance machinery because the ground for dismissal was a
violation of the school's rules and regulations.

Faced with this denial, TIPTEO opted to file a complaint for illegal dismissal with the National
Conciliation and Mediation Board (NCMB) in the National Capital Region. At the NCMB, the parties
agreed to submit the dispute to Voluntary Arbitrator Alfonso C. Atienza for voluntary arbitration.

On July 14, 2001, the voluntary arbitrator rendered an award in Salon’s favor.9 The arbitrator ruled
that Salon was dismissed without a valid cause and without due process. He found that the school
was unable to prove by substantial evidence that Salon committed the acts charged. At the most, the
arbitrator concluded that the TIP only proved that there was no permission, written or verbal, before
Salon prepared and sold the test papers to her students. On the due process issue, the arbitrator
found that Salon was not afforded an opportunity for a real investigation because she was denied
the right to counsel; neither was she afforded the right to a hearing under the grievance procedure of
the CBA and under the Labor Code.

The voluntary arbitrator ordered the TIP to reinstate Salon as College Instructor 3 with full
backwages, but suspended her for one month "for not getting a written permission from responsible
officials of the school in charging students with the cost of examination papers."

The TIP sought the reconsideration of the award, but the voluntary arbitrator denied the motion on
September 16, 2001. The TIP thereupon elevated the case to the CA through a petition for review. In
a decision promulgated on November 20, 2002, the appellate court affirmed the voluntary arbitration
award resulting in the dismissal of the petition.10 The appellate court agreed with the voluntary
arbitrator that nothing in the TIP rules warrants the dismissal of a faculty member for selling
examination papers without the school's written permission. It was not convinced that the infraction
committed by Salon is a grave offense referred to in Memorandum No. P-25 s. 2000-2001 that the
TIP cited as justification for the dismissal of Salon.11 The relevant portion of this memorandum reads:

1. In line with the school's thrust to provide quality education and service to its students, a
photocopy center is created with the major task of servicing students on their handout
requirements.

xxx
 4. Please discuss these to your respective faculty members on one of your department
meetings.

xxx

4.1 Explain to them the objectives for the creation of said photocopy center. Emphasize to
them that they are not authorized to sell instructional materials, and to do so is a grave
offense. Explain further that this is one of the reasons why the center is being formed.

xxx

4.2 Make clear to them that services of the photocopy center shall be limited to required
handouts and instructional materials assigned by faculty members and will not include other
photocopy needs of the student.

The CA ruled that examination papers do not fall within the term "instructional materials" that the
memorandum covers; the memorandum only covers handouts and instructional materials needed by
students and assigned by their teachers. The CA explained that from their nature and use, handouts
and instructional materials are entirely different from examination papers; instructional materials are
used to present and convey lessons to the students; whereas, examination papers measure the
students’ degree of comprehension of their lessons.

On a related matter, the CA held that if Salon committed an infraction, it should be limited to the fact
that she did not ask the Faculty Coordinator and the Department Head to determine the cost of the
papers which she disseminated among her students, as required under paragraph 4 of
Memorandum No. P-22 s. 1988-1989.12 Additionally, the CA held that Salon could be cited for
tampering with the grade of her student Joseph Florante Manalo (Manalo) – a violation of the TIP
grading policy.

Undeterred, the TIP moved for the reconsideration of the CA decision. The CA granted the motion
and handed down the now assailed amended decision on May 22, 2003.13 It examined the facts for
the second time and concluded that it erred in excluding examination papers from the ambit of the
term "instructional materials." It reasoned out that "examination papers play as much, maybe even
more importance in the determination of a student's aptitude than any kind of instructional material x
x x to exclude examination papers from the perimeters of the term 'instructional materials' would
amount to an incongruity." The CA also faulted Salon for changing the grade of Manalo from 5.0
(failed) to 6.0 (officially dropped) after the grades had been submitted.

For the reason that the infractions committed by Salon "were unrefuted and proven," the CA found
basis for the TIP's decision to dismiss her for the commission of a grave offense. This
notwithstanding, the appellate court deemed it "in accord with justice and equity to award her
separation pay," in consideration of Salon's more than ten (10) years of service to TIP and because
she had not previously been involved in any similar act or one that warrants a heavier penalty.

Accordingly, the CA annulled its decision dated November 20, 200214 as well as that of the Voluntary
Arbitrator dated July 14, 2001.15 It declared that Salon was dismissed for a valid cause, but awarded
her separation pay at one month's basic salary for every year of service. From this decision, Salon
and TIPTEO (now represented by the present counsel upon the demise of Mr. Antonio Diaz who had
assisted her [Salon] from the beginning) now come before this Court to challenge the amended CA
decision.

THE PETITION
 The petition submits that the CA erred:

1. In ruling that Salon was dismissed for a valid cause.

2. In not finding that Salon was denied procedural due process.

3. In not dismissing the petition outright despite its failure to attach a certified statement of
material dates in violation of Section 3, Rule 46 in relation to Rule 65 of the Rules of Court,
and Revised Circular No. 1-88.

On the first ground, Salon and her union bewail the CA's shifting appreciation of the nature of
test/examination papers, from "non-instructional" material to "instructional" material relying on the
same policy document of the school, Memorandum No. P-25 s. 2000-2001.16 They contend that the
appellate court's change of mind was not supported by any authority. Citing the dictionary
definition17 of "instructional" and "test," they argue that "instructional material" and "test papers" are
two different things; "test" is "a series of questions, problems, etc., intended to measure the extent of
knowledge, aptitudes, intelligence, and other mental traits"; "instructional" is an adjective which
means "pertaining or relating to instruction; educational; containing information."

Further, petitioners posit that it is incorrect to conclude that Salon is guilty of selling photocopied test
questionnaires to her students; she was not selling but merely securing reimbursement for the
personal expenses she incurred in the preparation of the test papers. Salon cited as authority
Memorandum No. P-22 s. 1988-1989,18 which expressly set guidelines for the cost of stenciled
examination papers, ₱0.40 for newsprint, and ₱0.60 for whitewove paper.

Charging the students for the examination papers could have been avoided according to Salon had
TIP performed its obligation of providing test and examination papers to the students; faculty
members, who are not allowed to use school computers and typewriters in the preparation of the
materials, had to type and photocopy the examination papers at their own expense and for which
they had to seek reimbursement. 1avv phi 1

On the violation of the school's grading system, Salon submits that she did it for a noble intention;
she changed the grade of Manalo – the son of a fellow faculty member – from a failing mark of 5.0 to
a grade of 6.0 (dropped) to lessen the impact of the student’s mother’s guilt and to keep the student
from being punished by his father, as she explained in her letter dated November 14, 2000 to TIP
President Dr. Teresita Quirino.19

Salon claims that when she realized that she violated the TIP's grading system, she consciously
tried to rectify her error; on October 20, 2000, during the submission and re-checking of her grading
sheets, she asked the permission of Ms. Royer to use the Arlegui computer room to correct the
grade of Manalo, but Ms. Royer directed her to defer the correction until the date set by the
Registrar's Office for the final audit of grades; the scheduled date, however, was overtaken by her
dismissal from her teaching post. She submits that there was no malice in what she did or an intent
to violate the school's grading system; at the very least, she committed an error in judgment that
does not warrant the harsh penalty of dismissal; her dismissal would violate the constitutional
guaranty of security of tenure.

On the due process issue, Salon points out that the investigation of the charges against her was a
"hoax"; no genuine investigation took place as she stated in her affidavit dated June 27, 2001;20 the
investigation was merely a gripe session where the complaining students hurled a barrage of
malicious allegations against her; she was not afforded an opportunity to defend herself and to be
represented by counsel of her own choice or a representative from the union. Salon further submits
that the TIP failed to comply with the two-notice requirement before she was terminated from
employment – (1) a first notice apprising her of the particular acts or omission for which she was
being dismissed, and (2) a second notice informing her of the school's decision to dismiss her. She
contends that the first notice issued by the TIP merely directed her to submit her explanation
regarding the "selling of photocopied examination," and did not inform her that this was a ground for
dismissal.

In her third assignment of error, Salon faults the CA for not dismissing the TIP's petition outright for
its failure to attach a certified statement of material dates in violation of Section 3, Rule 46 in relation
with Rule 65 of the Rules of Court and Revised Circular No. 1-88. She submits that a perusal of the
TIP's petition for review, dated October 1, 2001,21 reveals that there was no verified statement of
material dates accompanying the petition – a defect which cannot be cured by the incorporation of
material dates in the body of the petition.

Petitioners pray that the CA's amended petition be set aside; that Salon's dismissal be declared
illegal; and that she be reinstated with full backwages.

THE CASE FOR TIP

The TIP’s Comment dated September 5, 200322 and Memorandum dated March 25,
200223 commonly justify Salon's dismissal on grounds of: (1) tampering or falsifying the grade of a
student, which is a serious misconduct and an act of dishonesty and, (2) selling of test papers
without the approval of the school, which is a grave offense under the Manual of Regulations for
Private Schools and TIP's general disciplinary sanctions.24

On the first infraction, the TIP laments that the Voluntary Arbitrator ignored Salon's involvement in
the incident on the excuse that the complaint was not notarized. The TIP brushes aside the technical
deficiency and focuses on the substance of the offense charged – that Salon admitted that she
changed the grade of her student Manalo from a failing grade of 5.0 to a mark of 6.0, which means
that the student did not fail, but "officially dropped" the subject; the act constituted tampering, a
violation not only of the school's explicit rules and regulations, but also of the Manual of Regulations
for Private Schools; the alteration of the grade of her student constituted serious misconduct in
relation with the performance of Salon's duties that rendered her unfit to continue working for the
school; it was also an act of dishonesty, a clear disregard of her duty to serve as an example to her
students and to others. While Salon claimed that she did it with the noble intention of giving the
student a lesser degree of failure, it was a clear falsification of student records, which is a valid
ground for termination of employment under the Manual.

Regarding the charge of selling test questionnaires without approval, TIP again relies on the results
of the investigation undertaken by a committee created for the purpose. The committee found Salon
to have violated Memorandum No. P-66 s. 1992-1993,25 which provides among others:

1.0 All faculty members are reminded that

xxx

1.3 Faculty members who intend to use mimeographed or photocopied test questionnaires should
first refer these to their respective department officers. If approved, they should not sell these more
than the cost of the prevailing price of photocopies which are between 0.25 to .035 centavos per
page.

xxx
2.0 Any faculty member violating the school's policies will be subject to disciplinary action, either
suspension or dismissal depending on the gravity of the offense.

TIP contends that Salon did not ask for the approval of the school on her selling and costing of the
test questionnaires, an offense classified as grave under the general disciplinary sanctions of the
school, or Memorandum No. P-3 s. 1999-2000, the penalty for which is dismissal. It further contends
that in an attempt to justify her acts, Salon cited Memorandum No. P-22, s. 1988-1989 regulating the
selling of mimeographed examinations, which it argues cannot prevail over a subsequent issuance,
Memorandum No. P-66 s. 1992-1993 and Memorandum No. P-25 s. 2000-2001, which set
guidelines for the use of the photocopy center, not acts of teachers. It explains that under the two
memoranda, the selling of test papers without authorization from school authorities is a prohibited
act.

Also, the school takes exception to Salon's reliance on Memorandum No. P-25 s. 2000-200126 on
the use of the photocopy center, especially on her claim that the test questionnaire is not an
instructional material and, therefore, can be sold to students. It faults the voluntary arbitrator for his
shortsighted appreciation of the case; the recommendation of the investigating committee clearly
reflected that the rule violated was Memorandum No. P-66 s. 1992-1993.27 This notwithstanding, the
TIP argues that Memorandum No. P-25 s. 2000-2001 and Memorandum No. P-22 s. 1988-1989
must be viewed in relation with the prohibition under Section 94 of the Manual of Regulations for
Private Schools against any form of collections from students.28 It thus posits that the question of
whether "test questionnaires" are instructional materials becomes irrelevant since the prohibited act
is the selling or collecting of contributions without the approval of the school. It is quick to add,
however, that the CA is correct in classifying examination papers as "instructional materials."

On the issue of due process, the TIP claims that it duly notified Salon of the charges against her
consisting of (1) her having collected money from her students for test papers without the approval
of the school, and (2) the complaint of the father of the tampering of the grade of his son (Manalo).
The school asked Salon to submit her written answer to the charges against her. She was also given
the opportunity to explain her side at the investigation hearing. Thereafter, she was given the
required notice of termination.

On Salon's third assignment of error, the TIP submits that the petition for review it filed with the CA
complied with the requirement on statement of material dates under the Rules of Court.29 It disputes
Salon's argument that it is not sufficient to state the material dates in the body of the petition and that
a separate verified statement must be attached. It maintains that a perusal of the specific applicable
rule shows that the statement of material dates in a petition for review under Rule 43 need not be in
a separate attachment under oath.30

The TIP then points out that the petition filed with the CA states that the school received the decision
of the voluntary arbitrator dated July 14, 2001 on August 10, 2001; on August 16, 2001, it moved for
reconsideration of the voluntary arbitration award, and received on September 17, 2001 the order
dated September 6, 2001, denying the motion for reconsideration. It explains that with the
verification/certification under oath that "all allegations in the petition for review are true and correct,"
the statements of material dates made on pages 1 and 4 of the petition are therefore verified or
certified under oath. The CA thus held that since a review of the material dates revealed that the
petition was filed within the fifteen-day period from petitioner TIPTEO's receipt of the voluntary
arbitrators' denial of its motion for reconsideration, the petition could be given due course.31

The TIP lastly contends that under the Court's Revised Circular No. 1-8832 that Salon cited, the
dismissal of a case where there is no verified statement of material dates is at the discretion of the
court. It then concludes with the statement that it has been held in a number of cases that rules on
technicalities are adopted to serve justice and equity, and not to hamper them.

THE COURT'S DECISION

We resolve to DENY the petition for lack of merit.

The Procedural Issue

We first resolve the procedural question raised – the alleged failure of TIP to attach a verified
statement of the material dates to its petition with the CA, as required by the Rules of Court33 and
Supreme Court Revised Circular No. 1-88.34

We clarify in this regard that the review the TIP filed with the appellate court was not a special civil
action for certiorari under Rule 65 of the Rules of Court; it was an appeal to the CA through a petition
for review under Rule 43. This is consistent with our ruling in Luzon Development Bank v.
Association of Luzon Development Bank Employees35 that decisions of voluntary arbitrators or panel
of voluntary arbitrators should be appealable to the CA. The CA correctly treated the petition of TIP
as an appeal filed under Rule 43 which, parenthetically, also requires a statement of material dates
in the petition.36 The rationale for the requirement is to enable the appellate court to determine
whether the petition was filed within the period fixed in the rules.37

The CA reviewed the material dates contained in the petition and concluded that the petition "was
filed within the fifteen (15)-day period from receipt of the voluntary arbitrator's denial of its motion for
reconsideration x x x ." Proceeding from this premise and in the exercise of the discretion granted it
by the Rules in considering technical deficiencies, the CA concluded that the petition "could be given
due course."38 We respect the CA’s exercise of its discretion as it was exercised within the limits
allowed by the Rules; the material data on the filing of the petition are reflected in the petition. The
CA was therefore properly guided in considering whether the petition had been timely filed.
Consequently, we declare that the CA committed no reversible error when it gave due course to the
petition.

The Substantive Issues

a. The Sale of Papers

The first substantive issue is on the sale of test papers to students. We find it unfortunate that the
tribunals below failed to recognize the appropriate TIP rule that should govern the situation. Thus,
Memorandums Nos. P-22, P-25, and P-66 have all been invoked. To clear the air, Memorandum No.
P-22 is an issuance on August 4, 1988 on the subject: Mimeographed Examinations whose relevant
terms provide:39

There have been complaints received by this office that a number of teachers have been abusing
the use of printed test materials to the detriment of the students:

1. A certain teacher uses the same printed matter in all of his classes and charges each
student P1.00. This printed test material is only one page.

2. Some teachers are having printed examinations for which they charge the students
exhorbitantly.
 xxx

To correct these practices we have several suggestions:

xxx

3. Faculty members who have no other recourse but to print their examinations should ask
for the permission of their Faculty Coordinator, Department Head or Dean before they sell
such examination papers to students.

4. The cost of the stenciled examination paper should be determined by the Faculty
Coordinator, Department Head and Dean by presenting the official receipts or the cost of
printing. More or less, the cost per page should be for Newsprint paper – P0.40 and
Whitewove paper – P0.60.

For your guidance and strict compliance effective this semester SY 1988-89.

We quote this Memorandum in full because it indicates the concern that the school sought to
address in coming out with a regulation, which concern is exactly the cause for the students’
complaints. The Memorandum stresses, too, that an approval process had been in place as early as
1989.

Memorandum No. P-25 issued in 2000-2001 is on the subject of PHOTOCOPY CENTER, "created
with the major task of servicing students on their handout requirements" and "shall be limited to
required handout instructional materials assigned by faculty members and will not include other
photocopy needs of the students."40 Apparently, this Memorandum addresses its own objectionable
practice and is very specific on the concern it addresses – handout instructional materials.

Memorandum No. P-66 issued on April 23, 1993 is on the subject of "UNAUTHORIZED
BOOKBINDING OF REPORTS AND PROJECTS, MIMEOGRAPHING OR PHOTOCOPYING OF
TEST QUESTIONNAIRES, HANDOUTS, OR ANY PRINTED MATERIAL." Significantly, this
Memorandum specifically provides that "Faculty members who intend to use mimeographed or
photocopied test questionnaires should first refer these to their respective department officers. If
approved, they should not sell these more than the cost of the prevailing price of photocopies which
are between ₱0.25 to ₱0.35 centavos per page. x x x 2. Any faculty member found violating the
school’s policies shall be subject to disciplinary action, either suspension or dismissal, depending on
the gravity of the offense."

Under these regulatory measures, it appears clearly that Memorandum No. P-22, while specifically
on the subject of Mimeographed Examinations, is not the current TIP issuance on the matter.
Memorandum No. P-66 is the latest issuance and the one that specifies the requirements and
penalizes violations. On the other hand, Memorandum No. P-25 appears to be an issuance with little
relevance on the present dispute because it deals with instructional materials and by its own terms
does not cover "other photocopy needs of the students." An additional reason for its irrelevance, of
course, is the existence of at least two issuances that deal specifically with examination papers.

Salon never denied that she had charged her students the cost of their examination papers without
the approval of the proper school authorities pursuant to Memorandums Nos. P-22 and P-66. The
rationale behind the school policy of closely regulating the cost and sale of examination papers is to
free the students from avoidable financial burdens, and to prevent the abuse of the use of printed
examination papers by the teachers, as expressly stated in Memorandum No. P-22. It is of no
moment that Salon kept within the price range set by the school for the cost per page of the
examination paper. Her transgressions spring from her failure to secure prior approval of her use of
photocopied exam papers, and of the attendant cost. These transgressions link up directly with the
students’ allegations that they had to return and could not write on the exam papers they paid for – a
possible indicator of the intent to abuse.41

Salon's guilt is not erased or mitigated by her excuse that she had no choice but to secure
reimbursement from the students for the cost of the examination papers that the school should
provide but does not. The school does not deny that the teachers have to be reimbursed, but at the
same time it imposes measures to avoid abuses. Unless there is a showing of patent
unreasonableness (and we find none in this case), these measures have to be complied with. In
saying this, we do not thereby indicate our approval of the school practice of not providing test
papers as part of services to students covered by their matriculation fees. Tests are the traditional
and the accepted mode of measuring students’ performance and should be part and parcel of the
basic services that a school should offer. Charging their costs to students at the time of the
examination renders the students’ capacity to take the examinations dependent on their finances at
examination time. However, these are policy questions outside the scope of our present inquiry, as
the substantive reasonableness of the school’s policies and issuances is not a question directly
before us, nor are these issuances patently unreasonable. Thus, they do not enter the picture at all
in the determination of Salon’s guilt and penalty.

b. Grade Tampering

Salon admitted that she changed the grade of Manalo from one of "failure" (5.0) to "dropped" (6.0) at
the behest of a colleague, the mother of Manalo, to save the son from being harmed by his father for
his failing grade. Salon thought she was doing the family of Manalo a favor, but her act produced the
opposite result because the father himself lodged a complaint against her for grade tampering;42 as
suspected all along, the father was not satisfied with a grade of 6.0 for his son.

As in the case of unauthorized selling of examination papers, Salon's guilt is not erased or mitigated
by the fact that she meant well, or that she tried to rectify her indiscretion after realizing that she
violated the grading system of the school.43 Two differences exist between the examination paper
selling violation and the present one. First, her examination paper violation is largely a
transgression against a school regulation. The present one goes beyond a school violation; it is a
violation against the Manual of Regulation for Private Schools whose Section 79 provides: 44

Sec. 79. Basis for Grading. The final grade or rating given to a pupil or student in a subject should be
based on his scholastic record. Any addition or diminution to the grade x x x shall not be allowed.

Second, the present violation involves elements of falsification and dishonesty. Knowing fully what
Manalo deserved, Salon gave him a grade of 6.0 instead of a failing grade. In the process, she
changed – in short, falsified – her own records by changing the submitted record and the supporting
documents. Viewed in any light, this is Serious Misconduct under Article 282(a) of the Labor Code,
and a just cause for termination of employment.

Be that as it may, the mother of Manalo, being a teacher herself, should have been questioned or
investigated for urging Salon to give her son a passing grade. What Mrs. Manalo did was in itself
highly irregular and should have been subjected to disciplinary action, in the interest of fairness.

The Due Process Issue

Salon claims that her right to due process was violated because her investigation was a "hoax,"45 a
gripe session where the complaining students were allowed to engage in a spontaneous barrage of
malicious allegations against her, and where she was not afforded an opportunity to defend herself
and to be represented by a counsel of her own choice or by a union representation. She adds that
she was not given any notice before her termination.

The records of the case belie these claims.

Salon was given the opportunity to show cause why she should not be dismissed. First, in a
Memorandum dated October 30, 200346 issued by Ms. Royer, Assistant Faculty Coordinator of the
HSSD, Salon was asked to explain why no disciplinary action should be taken against her for "selling
photocopied examination papers." She was also furnished a copy of the complaint of the father of
Manalo regarding her "tampering" the grade of Manalo.47 Salon submitted her explanations to the
two documents consisting of (a) her letter dated October 31, 2004 addressed to Ms. Royer, where
she admitted photocopying the examination papers and charging her students ₱0.50 a page;48and
(b) her letter dated November 14, 2000 addressed to TIP President Dr. Teresita U. Quirino, where
she admitted changing the grade of Manalo.49

Second. An investigation was conducted by a committee created by the TIP, which submitted a
report/recommendation dated November 20, 2000, confirming the unauthorized selling of
examination papers and the tampering of the grade of Manalo. The committee recommended
Salon's dismissal.50

Third. In a memorandum dated December 4, 2000,51 Dr. Quirino advised Salon that her position as
Faculty Member is terminated effective 30 days from receipt of the memorandum.52 This was her
notice of termination – the 2nd notice that statutory due process requires in a dismissal situation.

Thus, not only was Salon notified in writing about the charges against her, she was given a
reasonable opportunity to explain her side; she was also called to an investigation where, again, she
had the opportunity to explain why she should not be dismissed. She was only dismissed after the
conclusion of the investigation and after she had been given a second notice in writing that she was
being terminated as a faculty member of the school. In short, she has nothing to complain about in
terms of the process she underwent that led to her dismissal.

The Penalty

In the same breath that she justifies her actions, Salon entreats this Court to impose on her a
penalty less harsh than dismissal if she will be held accountable for her misdeeds.53 She points out
in this regard that it was the first time that she was charged of an offense, and that she had been
with the school for more than ten (10) years already, and there was no bad faith or malicious
intention on her part.54

We do not find these entreaties sufficiently compelling or convincing as Salon is no ordinary

employee. She is a teacher from whom a lot is expected; she is expected to be an exemplar of
uprightness, integrity and decency, not only in the school, but also in the larger community. She is a
role model for her students; in fact, as she claims, she stands in loco parenti to them. She is looked
up to and is accorded genuine respect by almost everyone as a person tasked with the heavy
responsibility of molding and guiding the young into what they should be – productive and law-
abiding citizens.

What Salon committed is a corrupt act, no less, that we cannot allow to pass without giving a wrong
signal to all who look up to teachers, and to this Court, as the models who should lead the way and
set the example in fostering a culture of uprightness among the young and in the larger community.
From the personal perspective, Salon demonstrated, through her infractions, that she is not fit to
continue undertaking the serious task and the heavy responsibility of a teacher. She failed in a
teacher’s most basic task – in honestly rating the performance of students. Her failings lost her the
trust and confidence of her employer, and even of her students.

Under the circumstances, our conclusion can only be for Salon’s dismissal for two counts of valid
causes – i.e., for serious violation of TIP’s Memorandum No. P-66, for unauthorized selling of
examination papers, and for serious misconduct, for falsifying Manalo’s grade and violating the
grading rules under the Manual of Regulations for Private Schools.

The affirmation of the penalties the CA imposed brings into focus the appellate court’s award of
separation pay in consideration of her more than 10 years of service with TIP.55 Given the finding of
guilt and the penalty imposed, no basis exists to support and justify this award. No court, not even
this Court, can make an award that is not based on law.56 Neither can this award be justified even if
viewed as a discretionary financial assistance, since this kind of award can be imposed only where
the cause for dismissal is not serious misconduct or a cause reflecting on the employee’s moral
character.57 The dismissal we affirm is precisely for serious misconduct. The causes cited reflect as
well on Salon’s moral character. Hence, we delete any award of separation pay/financial assistance
that the appellate court decreed.

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. We hereby
AFFIRM the amended decision of the Court of Appeals promulgated on May 22, 2003, but DELETE
the award of separation pay. Costs against the petitioners.

SO ORDERED.

G.R. No. 143511 November 15, 2010

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner,

vs.
JOEY B. TEVES, Respondent.

DECISION

PERALTA, J.:

For review on certiorari are the Decision1 dated April 24, 2000 and the Resolution2 dated May 31,
2000 of the Court of Appeals (CA) in CA- G.R. SP No. 50852, affirming the Decision of the National
Labor Relations Commission (NLRC) which ordered the reinstatement of respondent Joey B. Teves
to his former position without loss of seniority rights and other privileges appurtenant thereto with full
backwages until actually reinstated.

The antecedent facts are as follows:

Respondent was employed by petitioner Philippine Long Distance Telephone Company in 1981 as
Clerk II until his termination from service on June 1, 1992. Petitioner terminated respondent through
an Inter-Office Memorandum3dated May 29, 1992 on account of his three (3) unauthorized leaves of
absence committed within three (3) years in violation of petitioner’s rules and regulations.

Respondent was absent from August 23 to September 3, 1990 as his wife gave birth on August 25
but was only discharged from the hospital on September 2, 1990 due to complications; since they
had no household help, he had to attend to his wife's needs in the hospital, as well as the needs of
their four kids, including bringing them to school. Respondent called up through a third party to
inform petitioner that he would go on an extended leave. Upon his reporting for work on September
4, 1990, he wrote petitioner a letter4 confirming his leave of absence without pay for that period and
stating the reasons thereof, with his wife's medical certificate attached. Dissatisfied, petitioner
required respondent to submit further explanation which the latter did reiterating his previous
explanation. However, in petitioner's Inter-Office Memorandum5 dated October 3, 1990, it found
respondent’s explanation to be unacceptable and unmeritorious for the latter's failure to call, notify or
request petitioner for such leave; thus, petitioner suspended respondent from work without pay for
20 days, effective October 8, 1990.

Respondent was absent from May 29 to June 12, 1991. He was sent a Memorandum6 reminding him
of the July 2, 1990 Memorandum requiring written application prior to a leave of absence without pay
and was directed to report for work on June 13, 1991 at ten o'clock in the evening lest he be meted a
disciplinary action. Respondent reported for work on even date, and was required to explain in
writing why no disciplinary action should be taken against him for his unauthorized leave of absence.
In a Memorandum7 dated June 17, 1991, respondent explained that his absences were due to the
fact that his eldest and youngest daughter were sick and had to be confined at the nearby clinic; and
the medical certificate confirming said confinement was to follow. Further, respondent alleged that
he had relayed said message to an officemate, Luis V. Marquez, who unfortunately did not also
report for work. As petitioner found respondent’s explanation insufficient, respondent was suspended
without pay for 45 days effective July 17, 1991.

Eight months thereafter, respondent availed of a seven-day leave of absence and extended such
leave to complete his annual vacation leave, which was to end on February 11, 1992. However,
respondent failed to report for work from February 11 to February 19, 1992. Petitioner then sent him
a Memorandum8 dated February 19, 1992, directing him to report for duty within 72 hours, otherwise,
his services would be terminated for abandonment of work. Respondent reported for duty and was
served another Memorandum requiring him to explain in writing why no disciplinary action should be
taken against him for his unauthorized absences. In his explanation, respondent stated that he
incurred said absences because he had many accounts in the office which were already due and
demandable and thought of prolonging such payment by absenting himself. He further stated that he
realized that what he did was wrong and only worsened his situation and asked for another chance.
Petitioner found such explanation totally unacceptable. Thus, in an Inter-Office Memorandum9 dated
May 29, 1992 addressed to respondent, the latter was terminated from service effective June 1,
1992 due to his third unauthorized absence within a three-year period.

On March 9, 1993, respondent filed a Complaint for illegal suspension, illegal dismissal, payment of
two Christmas bonuses and monthly rice subsidy. Petitioner filed its Position Paper.

On May 13, 1994, Labor Arbiter (LA) Benigno C. Villarente, Jr. rendered his Decision,10 the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered declaring that the dismissal of complainant is LEGAL.
Conformably with the preceding discussions, however, respondent is hereby directed to extend
complainant financial assistance in the amount of TWENTY THOUSAND PESOS (₱20,000.00).

Complainant's claims for bonuses and rice subsidy have not been substantiated and are, therefore,
hereby DISMISSED. 11

In his decision, the LA found that (1) respondent had committed his third unauthorized absence
within a three-year period and did not offer an acceptable reason therefor; (2) respondent's repeated
unauthorized absences displayed his irresponsibility and lackluster attitude towards work; (3) the
reasons for his absences which related to the need to attend to his family cannot mitigate his
apparent neglect of duty to his employer; and (4) his absences were in violation of petitioner's rules
and regulations. The LA found that respondent was not denied due process, since he was notified of
all his infractions and was allowed each time to submit his explanation. The LA awarded financial
assistance to respondent as a measure of compassionate justice taking into consideration
respondent's 11 years of service and since the infraction committed did not amount to a serious
misconduct nor did it involve moral turpitude.

Respondent interposed an appeal with the NLRC.

On January 30, 1997, the NLRC rendered its Decision12 reversing the LA’s Decision, the decretal
portion of which reads:

WHEREFORE, the instant appeal is hereby given due course. The appealed decision is hereby SET
ASIDE. Respondent is hereby declared guilty of illegally terminating complainant Joey B. Teves'
employment. As such, respondent Philippine Long Distance Telephone Company is hereby ordered
to reinstate complainant to his former position without loss of seniority rights and other privileges
appurtenant thereto with full backwages until actually reinstated. Respondents are likewise ordered
to pay complainant's unpaid wages for the period covering 15-31 May 1992, 13th month pay,
Christmas Bonuses, accrued rice subsidy of one (1) sack a month, or its money equivalent of
₱350.00 at the time of his dismissal.13

In reversing the LA, the NLRC found that respondent's absences from August 23 to September 3,
1990 was brought to petitioner's attention when respondent called through a third party that
respondent would go on an extended leave. Moreover, the reason for his prolonged absence, i.e.,
the unforeseen complications of his wife's condition after giving birth, supported by a medical
certificate, was an eventuality that needed to be attended to with priority which should have been
accorded credence and favorably considered; and that dismissing such explanation and placing
respondent under suspension, when his leave of absence was without pay, merely exacerbated his
family's plight.

The NLRC found that respondent's failure to verify whether his message for petitioner through a co-
employee that his (respondent) two daughters were sick and confined at a nearby clinic was duly
delivered constituted a neglect of duty. However, the NLRC took into consideration respondent's
reason for such absence and stated that certain leniency should have been accorded respondent
and that his suspension for 45 days was too harsh for the said offense.

While the NLRC found the reason offered by respondent for his absences from February 11 to 19,
1992 unacceptable and unreasonable, respondent should have only been penalized accordingly.
The NLRC found that respondent's dismissal from service was illegal, since he had been heavily
punished for each and every offense imputed to him and that in his eleven years of service, this was
the first time that he was falsely charged.
The NLRC found that petitioner failed to controvert respondent's claims for unpaid salary from May
15 to 31, 1990, 13th month pay and Christmas bonuses and rice subsidy for one month or its money
equivalent.

Petitioner's motion for reconsideration was denied by the NLRC in a Resolution14 dated February 26,
1997.

On May 29, 1997, petitioner filed before us a Petition for Certiorari with prayer for the issuance of a
temporary restraining order and/or injunction assailing the January 30, 1997 Decision and February
26, 1997 Resolution of the NLRC. Respondent filed his Comment thereto. Petitioner then filed a
Reply.

On November 12, 1997, respondent filed a Manifestation15 stating that he had already been
reinstated by petitioner effective November 10, 199716 in compliance with the NLRC Decision.

Subsequently, in a Resolution17 dated December 9, 1998, we referred the petition to the CA in

accordance with the St. Martin Funeral Home v. National Labor Relations Commission18 ruling.

On April 24, 2000, the CA rendered its assailed Decision, which affirmed and reiterated the NLRC
decision.

The CA found that (1) petitioner complied with the two-notice requirement which was essential to
respondent's right to due process; (2) respondent was given a notice to explain in writing why no
disciplinary action should be meted on him for his unauthorized absences from February 11 to 19,
1992; and (3) when respondent’s explanation proved unacceptable to petitioner, respondent was
sent another notice informing him of his termination by reason of three unauthorized absences within
a three-year period, a conduct which was circumscribed in petitioner's rules and regulations.
Notwithstanding compliance with the requirement of due process, the CA affirmed the illegality of
respondent's dismissal finding that respondent's comportment cannot be characterized as grave so
as to constitute grave misconduct; that his first two leaves of absence were satisfactorily justified;
and that he should not have been suspended from service by reason of such absences. However,
the CA found that respondent’s failure to report for work on February 11 to 19, 1992 appeared to be
the only unauthorized and unjustified leave of absence during his 11 years of stay with petitioner,
and it did not merit the harsh penalty of dismissal.

Petitioner filed a motion for reconsideration, but was denied by the CA in a Resolution dated May 31,
2000.

Hence, this petition. Petitioner raises the following arguments in its Memorandum.

A.

IT IS ALREADY SETTLED THAT RESPONDENT'S PREVIOUS ABSENCES WERE

UNJUSTIFIED AND UNAUTHORIZED IN LIGHT OF HIS VOLUNTARY ACCEPTANCE AND
COMPLIANCE WITH THE SUSPENSIONS IMPOSED IN CONNECTION WITH SAID
ABSENCES. HENCE, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
RULING THAT RESPONDENT MERELY COMMITTED ONE INSTANCE OF
UNAUTHORIZED ABSENCE.

B.
 THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR AND ABUSE OF
DISCRETION IN FINDING THAT RESPONDENT WAS ILLEGALLY DISMISSED
CONSIDERING THAT:

1. THE TERMINATION OF RESPONDENT'S SERVICES IS JUSTIFIED APPLYING

THE TOTALITY OF INFRACTIONS DOCTRINE.

2. THERE IS SUBSTANTIAL AND UNDISPUTED EVIDENCE ESTABLISHING

THAT RESPONDENT IS AN ABSENTEE EMPLOYEE WHO HAS A PROPENSITY
TO SIMPLY DISAPPEAR WITHOUT EVEN GIVING HIS EMPLOYER THE
COURTESY OF A PRIOR NOTICE.19

Petitioner contends that the CA erred when it found that (1) what was involved in this case was
merely one instance of an unauthorized leave of absence as all of respondent's absences where
he was previously sanctioned were unauthorized; (2) the imposition of the penalty of suspension to
respondent was justified and he had long been estopped from questioning the same; (3) respondent
was suspended not so much for the reason behind the absences, but because of the manner by
which he incurred the absence, i.e., by not informing petitioner causing undue prejudice to the
company's operations; (4) respondent had a propensity to simply disappear without giving petitioner
the courtesy of a prior notice; and (5) respondent never questioned the suspensions meted on him,
but instead voluntarily complied with the suspensions without protest.

Petitioner argues that respondent's past infractions could be used as supporting justification to a
subsequent similar offense which would merit respondent's dismissal; that the CA erred when it did
not apply the totality of infractions doctrine but limited respondent's offenses to just one offense; and
that respondent's acts of absenting himself without prior notice, despite previous disciplinary actions,
should be considered in its totality and not in isolation from one another.

Petitioner contends that the management's right to prescribe rules and regulations cannot be denied
and that the employer may justly discharge from employment an employee who violates company
rules and regulations. Petitioner avers that respondent’s length of service in the company cannot
work in his favor, but should be taken against him.

The issue for resolution is whether or not sufficient ground exists for respondent's dismissal from
service.

Respondent was terminated from employment by reason of his third unauthorized absence from
February 11 to 19, 1992. Respondent absented himself because he had many accounts in the office
which were already due and demandable, and he thought that absenting himself from work would
prolong the payment of his financial obligations; and that he realized that his action was wrong which
worsened his situation and asked for another chance. Such explanation was found by petitioner to
be unacceptable; thus, respondent was terminated effective June 1, 1992 for committing three
unauthorized absences within a three-year period. Petitioner found respondent to have committed
the other two incidents of unauthorized absences from August 23 to September 3, 1990 and from
May 29 to June 12, 1991.

The LA found that respondent’s dismissal was legal. However, the NLRC found that the two previous
incidents of respondent’s alleged unauthorized absences were justified, and that while his absence
from February 11 to 19, 1992 was unacceptable and unreasonable, he should have been penalized
therefor accordingly, but not with dismissal from service. The CA affirmed the NLRC’s findings and
concluded that respondent’s absences from February 11 to 19, 1992 was his first and only
unauthorized absences during his 11 years of stay, and it did not merit the harsh penalty of
dismissal.

Petitioner claims that respondent is an absentee employee who has a propensity to simply
disappear without giving his employer the courtesy of prior notice; and that respondent was not
sanctioned for the reasons given for his absences, but because of his failure to inform or give prior
notice to petitioner.

We find partial merit in this argument.

Respondent’s first alleged unauthorized absences were from August 23 to September 3, 1990,
wherein he went on leave without pay. In his letter dated September 4, 1990 addressed to petitioner,
which he submitted upon reporting for work, as well as in his response dated September 10, 1990 to
petitioner's memorandum dated September 7, 1990, respondent explained that his absences were
due to the fact that his wife gave birth on August 25, but was only discharged from the hospital on
September 2, 1990 due to complications; and that since they had no household help, he had to
attend to his wife's needs in the hospital, as well as the needs of their four kids, including bringing
them to school. Petitioner found the explanation unacceptable and unmeritorious as he did not
bother to call, notify or request for a leave of absence; thus, respondent was suspended from service
without pay equivalent to 20 days.

Respondent’s second alleged unauthorized absences were from May 29 to June 12, 1991. When
asked to explain his absences during the said period, respondent explained that his eldest and
youngest daughters were sick and were confined at a nearby clinic; and that he relayed such
emergency and the fact that he would not be able to report for work to a co-employee, Luis V.
Marquez, who unfortunately did not also report for work. Petitioner noted respondent's negligence in
failing to notify it of his intention to go on leave, or to verify whether the request for leave, allegedly
through a third party, had been approved. Petitioner suspended respondent for 45 days.

Notably, the alleged two prior incidents of respondent’s unauthorized absences above-mentioned
were due to a family emergency or sickness. Respondent’s explanations should have been given a
kind consideration by petitioner. An employee cannot anticipate when sickness or emergencies in
the family may happen, thus, he may not be able to give prior notice or seek prior approval of his
absence, but could only do so after the occurrence of the incident.

However, respondent had shown that he had given petitioner prior notice of his absences from
August 23 to September 3, 1990. As the NLRC found, petitioner admitted that "on August 23, 1990,
he (respondent) called up through a third party to inform PLDT that he would go on an extended
leave." Such admission was even reiterated in petitioner’s petition for certiorari filed with us. Notably,
when respondent returned for work on September 4, 1990, he immediately submitted a letter to
petitioner explaining his absence and attaching a medical certificate thereto to attest to the reason of
his absence. Thus, the suspension imposed on him was not proper.

As to respondent's second unauthorized absence, while respondent had relayed his inability to
report for work on May 29, 1991 to a co-employee, who unfortunately did not also report for work, he
was negligent in not verifying whether his notice of absence had reached petitioner, and the duration
of his absence. In fact, in petitioner's Inter-Office Memorandum dated June 12, 1991 sent to
respondent, the former asked the latter to report for duty on June 13, 1991 as he had been absent
since May 29, to which respondent complied. While respondent offered a justifiable reason for his
absences from May 29 to June 12, 1990, i.e., his two daughters were sick and confined at a nearby
clinic, however, we find that he failed to give petitioner prior notice of his absence, thus, such
absence was properly considered as unauthorized.
Thus, respondent’s absence from February 11 to 19, 1991 which was made to prolong payment of
his demandable financial obligations in the office, and which absence was found by both the NLRC
and the CA to be unjustified, was respondent’s second unauthorized absence. We find that
respondent's termination for committing three unauthorized absences within a three-year period had
no basis; thus, there was no valid cause for respondent's dismissal.

Even assuming that respondent's absenteeism constitutes willful disobedience, such offense does
not warrant respondent's dismissal.20 Not every case of insubordination or willful disobedience by an
employee reasonably deserves the penalty of dismissal.21 There must be a reasonable
proportionality between the offense and the penalty.22

Petitioner's claim that the alleged previous infractions may be used as supporting justification to a
subsequent similar offense, which would merit dismissal, finds no application in this case.
Respondent's absence from August 23 to September 3, 1990 was justified and not unauthorized as
there was prior notice. His absence from May 29 to June 12, 1991, although found to be
unauthorized, was not at all unjustified. Thus, his absence during the period from February 11 to 19,
1991, being the only unauthorized and unjustified absence and his second unauthorized absence,
should not merit the penalty of dismissal.

While management has the prerogative to discipline its employees and to impose appropriate
penalties on erring workers, pursuant to company rules and regulations, however, such
management prerogatives must be exercised in good faith for the advancement of the employer’s
interest and not for the purpose of defeating or circumventing the rights of the employees under
special laws and valid agreements.23 The Court is wont to reiterate that while an employer has its
own interest to protect, and pursuant thereto, it may terminate an employee for a just cause, such
prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. Its
implementation should be tempered with compassion and understanding. The employer should bear
in mind that, in the execution of said prerogative, what is at stake is not only the employee’s position,
but his very livelihood, his very breadbasket. 24
1avv phi 1

Dismissal is the ultimate penalty that can be meted to an employee.25 Even where a worker has
committed an infraction, a penalty less punitive may suffice, whatever missteps maybe committed by
labor ought not to be visited with a consequence so severe.26 This is not only the law’s concern for
the workingman. There is, in addition, his or her family to consider. Unemployment brings untold
hardships and sorrows upon those dependent on the wage-earner.27

Petitioner contends that respondent's length of service in the company cannot work in his favor but,
if to be considered at all, should even be taken against him relying on the case of Philippine Airlines,
Inc. (PAL) v. NLRC.28PAL has no application in this case as it involves a case of a supervisor
occupying a position of responsibility, who used trip passes which were falsified to reflect higher
priority and space classification than what she and her husband were entitled to on vacation travel in
violation of the company policy which served as PAL's basis for losing its trust and confidence on the
employee. We considered the infraction committed, together with her twenty years of employment in
the company, as reflecting her regrettable lack of loyalty to the company, which loyalty she should
have strengthened instead of betrayed. In contrast, the instant infraction committed by respondent
during his eleven-year stay with petitioner did not involve the betrayal of petitioner's trust and
confidence. Moreover, there was no basis for respondent's termination, on the ground that he had
committed his third unauthorized absence within the three-year period as discussed earlier in the
decision.

Considering that respondent was illegally dismissed from service, he is entitled to be reinstated,
without loss of seniority rights and the payment of backwages from the time respondent’s
compensation was withheld from him until his reinstatement on November 12, 1997. However, since
we find that respondent's absence from February 11 to 19, 1992 was unjustified and unauthorized,
thus, his suspension for thirty days would be in order. Hence, the amount equivalent to the thirty-day
suspension, which respondent should have served for his absence on February 11 to 19, 1992,
should be deducted from the backwages to be awarded to him.

WHEREFORE, the Decision dated April 24, 2000 and the Resolution dated May 31, 2000 of the
Court of Appeals in CA-G.R. SP No. 50852, are hereby AFFIRMED with MODIFICATION that the
amount equivalent to respondent’s thirty-day suspension is deducted from the award of backwages
from the time his compensation was withheld up to his reinstatement on November 12, 1997.

SO ORDERED.

G.R. NO. 160339 March 14, 2008

OSCAR P. GARCIA and ALEX V. MORALES, Petitioners,

vs.
MALAYAN INSURANCE CO., INC. and NATIONAL LABOR RELATIONS
COMMISSION,* Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court of Oscar P.
Garcia and Alex V. Morales (petitioners), assailing the March 13, 2003 Decision1 of the Court of
Appeals (CA), which

upheld the validity of the termination of their employment; and the October 9, 2003 CA
Resolution2 which denied their motion for reconsideration.

The facts are of record.

Petitioners were employed as risk inspectors by Malayan Insurance Company, Inc. (private
respondent). They were also officers of the Malayan Employees Association-FFW (MEA-FFW).

On December 29, 1999, private respondent issued to petitioner Garcia an Inter-Office

Memorandum3 giving him 24 hours to explain his involvement in the theft of company property,
consisting of diskettes, logbooks and other documents of the Risk Analysis Section, and to return the
same. Private respondent also issued to petitioner Morales a similar memorandum but with
additional instruction for his preventive suspension for 30 days pending investigation.4

In their separate written explanations, petitioners denied their involvement in the theft and countered
that the filing of the charges against them was a form of harassment against their union MEA-FFW,
which was in a deadlock with respondent in the ongoing negotiations over the terms of their
collective bargaining agreement.5

After the conduct of an informal administrative hearing,6 private respondent notified petitioner Garcia,
through a letter dated February 28, 2000, of the termination of his employment, thus:

After a painstaking evaluation of the pieces of documentary and testimonial evidence presented, the
Investigating Committee concluded that there is reason to believe that you participated in the theft of
the subject Company properties when you:

1) Took possession of the subject diskettes and logbooks without any permission from the
company;

2) Instigated the commission of the said unlawful act; and

3) Refused to deliver said Company properties upon demand by Management.

The above acts constitute serious misconduct and a violation of the Company’s Code of Ethics
which, under Article 282 of the Labor Code, as amended, justify your dismissal from the Company.
In view thereof, we regret to inform you that you are considered dismissed from your employment
effective immediately.7

Petitioner Morales was also served a similar notice of termination but on the following grounds:

After a painstaking evaluation of the pieces of documentary and testimonial evidence presented, the
Investigating Committee concluded that there is reason to believe that you participated in the theft of
the subject Company properties when you:

1) Conspired with Mr. Garcia in attempting to cover-up the loss of the subject diskettes and
logbook; and

2) Deliberately withheld information from the Company regarding the whereabouts of said
Company properties .

A review of your 201 File likewise revealed that you have been previously suspended for tampering
receipts which you presented for reimbursement by the Company. You will therefore realize that
when it comes to dishonesty, you are not a first offender.

The above recent acts constitute serious misconduct and violation of the Company’s Code of Ethics
which, under Article 282 of the Labor Code, as amended, justify your dismissal from the Company.
In view thereof, we regret to inform you that you are considered dismissed from your employment
effective immediately.8

Petitioners filed before the Labor Arbiter (LA) a Complaint for illegal dismissal, illegal suspension,
unfair labor practice, damages and attorney’s fees.9 The LA dismissed their Complaint in a
Decision10

dated November 20, 2000.

Petitioners appealed to the National Labor Relations Commission (NLRC), which issued a
Resolution11 dated November 29, 2001, affirming the November 20, 2000 LA Decision. The NLRC
also denied petitioners’ Motion for Reconsideration in a Resolution12 dated February 28, 2002.

Petitioners filed a Petition for Certiorari with the CA, which dismissed it in the March 13, 2003
Decision13 assailed herein. Petitioners’ Motion for Reconsideration was also denied by the CA in its
October 9, 2003 Resolution.

Hence, the present petition, which raises the following issues:

The Honorable public respondent court seriously erred and committed grave abuse of
discretion, amounting to lack and/or excess of jurisdiction, in denying the petition for
certiorari a quo and, in effect, affirming the assailed resolutions of public respondent NLRC,
dismissing the complaint for unfair labor practice, illegal suspension, illegal dismissal,
damages and attorney's fees x x x.

II

While the public respondent court is totally correct in declaring that "factual findings of the
NLRC, particularly when it coincide with those of the Labor Arbiter, are accorded respect,
even finality," it erred, however in applying said doctrinal ruling in the instant case, x x x.

III

The public respondent court seriously erred in not finding that the public respondent NLRC
and the Labor Arbiter a quo seriously erred and committed grave abuse of discretion in
rendering the assailed resolution, as clearly private respondent company acted with bad faith
in terminating the services of herein petitioners.

IV

The public respondent court committed grave abuse of discretion amounting to lack and/or
excess of jurisdiction in denying petitioners' motion for reconsideration without resolving the
legal issues raised.14

Resolution of the foregoing issues entails an inquiry into the facts, a re-evaluation of the credibility of
the witnesses and a recalibration of the evidence presented. Ordinarily, the Court does not
undertake these functions, for it defers to the expertise of the CA, NLRC and LA, and accords great
weight to their factual findings, especially when these are unanimous. Thus, only their errors of law
are reviewable by the Court in a petition for review on certiorari under Rule 45.

However, under extraordinary circumstances, the Court delves into the factual assessment of the
forums below when it is shown that (1) the findings are not supported by evidence; (2) when the
inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of
fact are conflicting; (6) when in making its findings, the CA went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings
are contrary to the trial court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition as well as in the
petitioner's reply briefs are not disputed by the respondent; and (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the evidence on record.15

To determine whether any of these extraordinary circumstances obtains in the present case, a
preliminary assessment of the evidence upon which the CA, NLRC and LA based their factual
findings cannot be avoided.

The LA declared the dismissal of petitioners valid in view of substantial evidence that petitioner
Garcia was involved in the theft of private respondent's confidential records and that petitioner
Morales participated in the cover-up thereof:

In the case at bar, this Office finds that there is substantial evidence to justify the dismissal of
[petitioners]. The testimonies of [Jovita] Umila, [Philip] de Guzman and [Romeo] Corral are such
"relevant evidence as a reasonable mind might accept as adequate to justify (the) conclusion" that
[petitioners] are guilty of serious misconduct which is duly recognized under the law as valid cause
for the dismissal of an employee. Their statements explain the questioned incident in its entirety from
the inception of wrongdoing (Umila), to the denial of knowledge of the whereabouts of the subject
lost records (Corral), to the subsequent admission of possession of the missing diskettes and
logbooks (Umila), up to the attempt to cover-up their misconduct (De Guzman). [Petitioners] failed to
adduce any evidence that would taint the credibility of said witnesses. It goes against the usual grain
of logic and normal human conduct for a witness to testify against a co-Union member or co-
employee, absent any clear evil or ill-motive on his/her part, thus demonstrating that said witness is
moved only by the desire to tell the truth and clear his conscience. There being nothing to indicate
that the witnesses were moved by dubious or improper motives to testify falsely, their testimonies
should be accorded full faith and credit.

Tellingly, [petitioner] Garcia never denied, much less refuted, Umila's positive testimony that he
(Garcia) admitted that he has in his possession the missing diskettes and logbooks. The same holds
true as regards [petitioner] Morales who likewise never denied, much less refuted, De Guzman's first
person testimony of his (Morales') complicity in the cover-up of the wrongdoing of [petitioner]
Garcia.16

The NLRC sustained the findings of the LA. It held that the LA correctly relied on the affidavits of
Umila and De Guzman whose detailed account of how petitioners committed serious misconduct
was never refuted

by the latter.17 The NLRC found these witnesses credible because they were not shown to hold any
"grudge against [petitioners], much more because said witnesses are ordinary members of the union
while those being charged are union officers, hence, with moral ascendancy over them."18

While the CA did not elaborate on its view, it bound itself by the concurrent factual findings of the LA
and NLRC for it found them to be supported by evidence.19

Impugning the stand of the CA, petitioners argue that the affidavits of Umila and De Guzman have
no probative value for neither had direct knowledge of the taking of private respondent's properties:
first, Umila merely stated that on December 24, 1998, petitioner Garcia and another employee, Jun
Bato, asked about these properties and that she told them that said properties were on top of her
office table; and second, De Guzman merely described how these properties were recovered.20

Perusal of the affidavits in question does not bear out petitioners' claim. Umila also stated that when
she confronted petitioner Garcia about the lost properties, the latter admitted having them in his
possession.21 De Guzman's statement detailed the effort to bring said properties back into the
premises of private respondent and to make it appear that these were merely misplaced.22 Thus,
without going into the veracity of the statements in said affidavits, the Court cannot agree that no
direct evidence was presented on the theft of the properties or the cover-up thereof.

However, it is noted that while the participation of petitioner Garcia in said theft and cover-up is
detailed in said affidavit, the same cannot be said of the connection of Morales to said incidents. To
recall, petitioner Morales was dismissed for conspiring in the cover-up of the theft. However, it
appears that the only evidence of petitioner Morales's involvement in the cover-up is the statement
of De Guzman that it was said petitioner who instructed him to get a parcel from a third person. The
statement of De Guzman on this particular matter is reproduced below:

3. Noon Disyembre 29, 1999 bandang alas-kuwatro kuwarenta y singko ng hapon (4:45 p.m.), ako
ay kasalukuyang naghuhugas ng mga plato sa Comfort Room ng 5th floor ng ETY Building nang ako
ay lapitan ni Alex Morales ng Risk Analysis Department at inutusang pumunta sa Farmacia Rubi,
dito rin sa Quintin Paredes, Binondo para kunin ang isang bagay sa lalaking may bigote.23

By no means can it be extrapolated from the foregoing statement that petitioner Morales knew the
contents of the parcel - whether or not these were the stolen company properties - or the purpose for
getting the parcel from a third party. In fact, the succeeding paragraphs in the statement disclose
that it was that third party who instructed De Guzman to call petitioner Garcia, who, in turn, disclosed
the nature of the contents of the parcel and gave out instruction on what steps to take to bring said
parcel back into the office building and to make it appear that it was just misplaced. Nowhere does it
appear that petitioner Morales had knowledge of what was to happen or had participation in it. It is
difficult then to connect petitioner Morales to the theft or the attempt to cover it up merely on the
basis of his having instructed De Guzman to get a parcel from another person.

Therefore, on the specific culpability of petitioner Morales, the Court finds the affidavit of De Guzman
so lacking in crucial detail that the same cannot serve as basis for the finding that said petitioner
conspired in the theft

of private respondent's properties or the cover up thereof.24 The Court reverses the factual findings
of the CA, NLRC and LA, for the evidence on which their findings were based was too tenuous to
justify the termination of petitioner Morales's employment.

Nonetheless, no bad faith can be attributed to private respondent in dismissing petitioner Morales
despite such scant evidence. Its error in the assessment of the available evidence cannot be
equated with bad faith as there is no evidence that it was animated by malice or ill motive. Hence, its
action in dismissing petitioner Morales may have been illegal, but did not amount to unfair labor
practice.

Moving on to the other issues pertaining to petitioner Garcia, he insists that, contrary to the
observation of the CA, he controverted the affidavits presented by private respondent, not only by
denying the averments therein, but also by presenting counter evidence consisting of an entry in the
guard's logbook and the affidavit of the guard-on-duty, Joey Limbo.25 Petitioner explains that it took
time for him to present these documents, because private respondent had tried to conceal them and
was compelled to present the same before the LA26 only when he (petitioner Garcia) demanded to
see them.27

The Court is not convinced that by said logbook entry and affidavit of Joey Limbo, petitioner Garcia
effectively controverted the existing evidence against him. The logbook entry merely reports that De
Guzman recovered the stolen properties from the fifth floor of the office building.28 The
affidavit of Joey Limbo merely repeated the logbook entry.29 That these documents do not disclose
any further detail is understandable, for as explained by De Guzman himself in his affidavit, he
merely reported the recovery of the stolen properties to Joey Limbo and did not elaborate on the
circumstances thereof, but when he was confronted by private respondent the following day, it was
then that he divulged the details leading to the recovery of said properties.30

Verily, the Court finds no indication that the CA misappreciated the evidence when it affirmed the
findings of the NLRC and LA against petitioner Garcia.

Finally, petitioners complain that they were denied due process when they were not furnished a copy
of the evidence against them or the minutes of the investigation.31

It is oft repeated that in administrative proceedings, due process is served by the mere fact that each
party is afforded an opportunity to air its side,32 not necessarily through verbal argumentation, but
also through pleadings in which the parties may explain their side of the controversy. 33 It is of record
that petitioners were informed of the charges against them and were given the opportunity to present
their defense, not just in the administrative investigation, but also in the proceedings before the LA
and NLRC. The requirements of due process were more than adequately satisfied.

In fine, the Court sees no compelling reason to disturb the concurrent factual findings of the CA,
NLRC and LA that petitioner Garcia was involved in the theft of respondent's properties and in the
attempt to cover up said act for the same are supported by substantial evidence.

However, the Court finds scant evidence to connect petitioner Morales to the theft or its cover-up
and therefore declares that the CA committed a grievous error in upholding his dismissal.

WHEREFORE, the petition is PARTLY GRANTED. The assailed March 13, 2003 Decision and
October 9, 2003 Resolution of the Court of Appeals are AFFIRMED insofar as they sustained the
dismissal of the complaint of petitioner Oscar Garcia; and REVERSED and SET ASIDE insofar as
they sustained the dismissal of the complaint of petitioner Alex Morales. The complaint for the illegal
dismissal of Alex Morales is GRANTED. His immediate reinstatement with backwages is ordered.

No costs.

SO ORDERED.

G.R. No. 173151 March 28, 2008

EDUARDO BUGHAW, JR., Petitioner,

vs.
TREASURE ISLAND INDUSTRIAL CORPORATION, Respondent.

DECISION

CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court, filed by petitioner Eduardo Bughaw, Jr., seeking to reverse and set aside the Decision,1 dated
14 June 2005 and the Resolution,2 dated 8 May 2006 of the Court of Appeals in CA-G.R. SP No.
85498. The appellate court reversed the Decision dated 28 August 2003 and Resolution dated 27
February 2004 of the National Labor Relations Commission (NLRC) in NLRC Case No. V-000231-02
that found the petitioner to be illegally dismissed from employment by respondent Treasure Island
Industrial Corporation. The dispositive portion of the assailed appellate court’s Decision thus reads:

WHEREFORE, discussion considered, the decision dated August 28, 2003 of the National Labor
Relations Commission, Fourth Division, Cebu City, in NLRC Case No. V-000231-02 (RAB VII-06-
1171-01), is hereby VACATED and SET ASIDE en toto.

The award of money claims to [herein petitioner] is NULLIFIED and RECALLED.3

The factual and procedural antecedents of the instant Petition are as follows:

Sometime in March 1986, petitioner was employed as production worker by respondent.

Respondent was receiving information that many of its employees were using prohibited drugs
during working hours and within the company premises.4

On 5 June 2001, one of its employees, Erlito Loberanes (Loberanes) was caught in flagrante delicto
by the police officers while in possession of shabu. Loberanes was arrested and sent to jail. In the
course of police investigation, Loberanes admitted the commission of the crime. He implicated
petitioner in the crime by claiming that part of the money used for buying the illegal drugs was given
by the latter, and the illegal drugs purchased were for their consumption for the rest of the month.5

In view of Loberanes’s statement, respondent, on 29 June 2001, served a Memo for Explanation6 to
petitioner requiring him to explain within 120 hours why no disciplinary action should be imposed
against him for his alleged involvement in illegal drug activities. Petitioner was further directed to
appear at the office of respondent’s legal counsel on 16 June 2001 at 9:00 o’clock in the morning for
the hearing on the matter. For the meantime, petitioner was placed under preventive suspension for
the period of 30 days effective upon receipt of the Notice.

Notwithstanding said Memo, petitioner failed to appear before the respondent’s legal counsel on the
scheduled hearing date and to explain his side on the matter.

On 19 July 2001, respondent, through legal counsel, sent a second letter7 to petitioner directing him
to attend another administrative hearing scheduled on 23 July 2001 at 11:00 o’clock in the morning
at said legal counsel’s office but petitioner once again failed to show up.

Consequently, respondent, in a third letter8 dated 21 August 2001 addressed to petitioner,

terminated the latter’s employment retroactive to 11 June 2001 for using illegal drugs within
company premises during working hours, and for refusal to attend the administrative hearing and
submit written explanation on the charges hurled against him.

On 20 July 2001, petitioner filed a complaint9 for illegal dismissal against respondent and its
President, Emmanuel Ong, before the Labor Arbiter. Petitioner alleged that he had been working for
the respondent for 15 years and he was very conscientious with his job. He was suspended for 30
days on 11 June 2001 based on the unfounded allegation of his co-worker that he used illegal drugs
within company premises. When petitioner reported back to work after the expiration of his
suspension, he was no longer allowed by respondent to enter the work premises and was told not to
report back to work.
On 8 January 2002, the Labor Arbiter rendered a Decision10 in favor of petitioner since the
respondent failed to present substantial evidence to establish the charge leveled against the
petitioner. Apart from Loberanes’s statements on petitioner’s alleged illegal drug use, no other
corroborating proof was offered by respondent to justify petitioner’s dismissal. Further, respondent
failed to comply with due process when it immediately suspended petitioner and eventually
dismissed him from employment. Petitioner’s immediate suspension was not justified since no
evidence was submitted by the respondent to establish that petitioner’s continued employment
pending investigation poses a serious and imminent threat to respondent’s life or property or to the
life or property of petitioner’s co-workers. Finally, the Labor Arbiter observed that the notices of
hearing sent by respondent to petitioner were not duly received by the latter. The Labor Arbiter was
not swayed by respondent’s explanation that the reason therefor was that petitioner refused to
receive said notices. The Labor Arbiter thus ruled:

WHEREFORE, premises considered, judgment is hereby rendered ordering [herein respondent] to

pay [herein petitioner] the following:

1. Separation pay ₱ 74,100.00

2. Backwages ₱ 27,550.00

3. Unpaid wages ₱ 4,940.00

Total
₱ 106,590.00

The case against respondent Emmanuel Ong is dismissed for lack of merit.11

On appeal, the NLRC affirmed the Labor Arbiter’s Decision in its Decision dated 28 August 2003.
The NLRC decreed that respondent failed to accord due process to petitioner when it dismissed him
from employment. The use of illegal drugs can be a valid ground for terminating employment only if it
is proven true. An accusation of illegal drug use, standing alone, without any proof or evidence
presented in support thereof, would just remain an accusation.12

The Motion for Reconsideration filed by respondent was denied by the NLRC in a Resolution13 dated
27 February 2004.

Resolving respondent’s Petition for Certiorari, the Court of Appeals reversed the Decisions of the
Labor Arbiter and NLRC on the grounds of patent misappreciation of evidence and misapplication of
law. The appellate court found that petitioner was afforded the opportunity to explain and defend
himself from the accusations against him when respondents gave him notices of hearing, but
petitioner repeatedly ignored them, opting instead to file an illegal dismissal case against respondent
before the Labor Arbiter. The essence of due process in administrative proceedings is simply an
opportunity to explain one’s side or to seek reconsideration of the action or ruling complained of.
Due process is not violated where one is given the opportunity to be heard but he chooses not to
explain his side.14

Similarly ill-fated was petitioner’s Motion for Reconsideration which was denied by the Court of
Appeals in its Resolution15 dated 8 May 2006.

Hence, this instant Petition for Review on Certiorari16 under Rule 45 of the Revised Rules of
Court filed by petitioner impugning the foregoing Court of Appeals Decision and Resolution, and
raising the sole issue of:
WHETHER OR NOT PETITIONER WAS ILLEGALLY DISMISSED FROM EMPLOYMENT.

Time and again we reiterate the established rule that in the exercise of the Supreme Court’s power
of review, the Court is not a trier of facts17 and does not routinely undertake the reexamination of the
evidence presented by the contending parties during the trial of the case considering that the
findings of facts of labor officials who are deemed to have acquired expertise in matters within their
respective jurisdiction are generally accorded not only respect, but even finality, and are binding
upon this Court,18 when supported by substantial evidence.19

The Labor Arbiter and the NLRC both ruled that petitioner was illegally dismissed from employment
and ordered the payment of his unpaid wages, backwages, and separation pay, while the Court of
Appeals found otherwise. The Labor Arbiter and the NLRC, on one hand, and the Court of Appeals,
on the other, arrived at divergent conclusions although they considered the very same evidences
submitted by the parties. It is, thus, incumbent upon us to determine whether there is substantial
evidence to support the finding of the Labor Arbiter and the NLRC that petitioner was illegally
dismissed. Substantial evidence is such amount of relevant evidence which a reasonable mind might
accept as adequate to support a conclusion, even if other equally reasonable minds might
conceivably opine otherwise.20

Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold, the
substantive and the procedural aspects. Not only must the dismissal be for a just21 or authorized
cause,22 the rudimentary requirements of due process - notice and hearing23 – must, likewise, be
observed before an employee may be dismissed. Without the concurrence of the two, the
termination would, in the eyes of the law, be illegal,24 for employment is a property right of which one
cannot be deprived of without due process.25

Hence, the two (2) facets of a valid termination of employment are: (a) the legality of the act of
dismissal, i.e., the dismissal must be under any of the just causes provided under Article 282 of the
Labor Code; and (b) the legality of the manner of dismissal, which means that there must be
observance of the requirements of due process, otherwise known as the two-notice rule.26

Article 282 of the Labor Code enumerates the just causes for terminating the services of an
employee:

ART. 282. Termination by employer. - An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or his
duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and

(e) Other causes analogous to the foregoing.

The charge of drug abuse inside the company’s premises and during working hours against
petitioner constitutes serious misconduct, which is one of the just causes for termination. Misconduct
is improper or wrong conduct. It is the transgression of some established and definite rule of action,
a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not merely
an error in judgment. The misconduct to be serious within the meaning of the Act must be of such a
grave and aggravated character and not merely trivial or unimportant. Such misconduct, however
serious, must nevertheless, in connection with the work of the employee, constitute just cause for his
separation.27 This Court took judicial notice of scientific findings that drug abuse can damage the
mental faculties of the user. It is beyond question therefore that any employee under the influence of
drugs cannot possibly continue doing his duties without posing a serious threat to the lives and
property of his co-workers and even his employer.

Loberanes’s statements given to police during investigation is evidence which can be considered by
the respondent against the petitioner. Petitioner failed to controvert Loberanes’ claim that he too was
using illegal drugs. Records reveal that respondent gave petitioner a first notice dated 11 June 2001,
giving him 120 hours within which to explain and defend himself from the charge against him and to
attend the administrative hearing scheduled on 16 June 2001. There is no dispute that petitioner
received said notice as evidenced by his signature appearing on the lower left portion of a copy
thereof together with the date and time of his receipt.28 He also admitted receipt of the first notice in
his Memorandum before this Court.29 Despite his receipt of the notice, however, petitioner did not
submit any written explanation on the charge against him, even after the lapse of the 120-day period
given him. Neither did petitioner appear in the scheduled administrative hearing to personally
present his side. Thus, the respondent cannot be faulted for considering only the evidence at hand,
which was Loberanes’ statement, and conclude therefrom that there was just cause for petitioner’s
termination.

We thus quote with approval the disquisition of the Court of Appeals:

The [NLRC] did not find substantial evidence in order to establish the charge leveled against [herein
petitioner] claiming that the statement of Loberanes is legally infirm as it was an admission made
under custodial investigation; and there has been no corroborating evidence. In administrative
proceedings, technical rules of procedure and evidence are not strictly applied and administrative
due process cannot be fully equated with due process in its strict judicial sense. Xxx It is sufficient
that [herein petitioner] was implicated in the use of illegal drugs and, more importantly, there is no
counter-statement from [herein petitioner] despite opportunities granted to him submit to an
investigation.30

It was by petitioner’s own omission and inaction that he was not able to present evidence to refute
the charge against him.

Now we proceed to judge whether the manner of petitioner’s dismissal was legal; stated otherwise,
whether petitioner was accorded procedural due process.

In Pastor Austria v. National Labor Relations Commission,31 the Court underscored the significance
of the two-notice rule in dismissing an employee:

The first notice, which may be considered as the proper charge, serves to apprise the employee of
the particular acts or omissions for which his dismissal is sought. The second notice on the other
hand seeks to inform the employee of the employer’s decision to dismiss him. This decision,
however, must come only after the employee is given a reasonable period from receipt of the first
notice within which to answer the charge and ample opportunity to be heard and defend himself with
the assistance of a representative if he so desires. This is in consonance with the express provision
of the law on the protection to labor and the broader dictates of procedural due process. Non-
compliance therewith is fatal because these requirements are conditions sine qua non before
dismissal may be validly effected. (Emphases supplied.)

While there is no dispute that respondent fully complied with the first-notice requirement apprising
petitioner of the cause of his impending termination and giving him the opportunity to explain his
side, we find that it failed to satisfy the need for a second notice informing petitioner that he was
being dismissed from employment.

We cannot give credence to respondent’s allegation that the petitioner refused to receive the third
letter dated 21 August 2001 which served as the notice of termination. There is nothing on record
that would indicate that respondent even attempted to serve or tender the notice of termination to
petitioner. No affidavit of service was appended to the said notice attesting to the reason for failure
1avv phi 1

of service upon its intended recipient. Neither was there any note to that effect by the server written
on the notice itself.

The law mandates that it is incumbent upon the employer to prove the validity of the termination of
employment.32Failure to discharge this evidentiary burden would necessarily mean that the dismissal
was not justified and, therefore, illegal.33 Unsubstantiated claims as to alleged compliance with the
mandatory provisions of law cannot be favored by this Court. In case of doubt, such cases should be
resolved in favor of labor, pursuant to the social justice policy of our labor laws and Constitution.34

The burden therefore is on respondent to present clear and unmistakable proof that petitioner was
duly served a copy of the notice of termination but he refused receipt. Bare and vague allegations as
to the manner of service and the circumstances surrounding the same would not suffice. A mere
copy of the notice of termination allegedly sent by respondent to petitioner, without proof of receipt,
or in the very least, actual service thereof upon petitioner, does not constitute substantial evidence. It
was unilaterally prepared by the petitioner and, thus, evidently self-serving and insufficient to
convince even an unreasonable mind.

We cannot overemphasize the importance of the requirement on the notice of termination, for we
have ruled in a number of cases35 that non-compliance therewith is tantamount to deprivation of the
employee’s right to due process.

This is not the first time that the Court affirmed that there was just cause for dismissal, but held the
employer liable for non-compliance with the procedural due process. In Agabon v. National Labor
Relations Commission,36 we found that the dismissal of the employees therein was for valid and just
cause because their abandonment of their work was firmly established. Nonetheless, the employer
therein was held liable because it was proven that it did not comply with the twin procedural
requirements of notice and hearing for a legal dismissal. However, in lieu of payment of backwages,
we ordered the employer to pay indemnity to the dismissed employees in the form of nominal
damages, thus:

The violation of the petitioners’ right to statutory due process by the private respondent warrants the
payment of indemnity in the form of nominal damages. The amount of such damages is addressed
to the sound discretion of the court, taking into account the relevant circumstances…. We believe
this form of damages would serve to deter employers from future violations of the statutory due
process rights of employees. At the very least, it provides a vindication or recognition of this
fundamental right granted to the latter under the Labor Code and its Implementing Rules.37

The above ruling was further clarified in Jaka Food Processing Corporation v. Pacot.38
In Jaka, the employees were terminated because the corporation was financially distressed.
However, the employer failed to comply with Article 283 of the Labor Code which requires the
employer to serve a written notice upon the employees and the Department of Labor and
Employment (DOLE) at least one month before the intended date of termination. We first
distinguished the case from Agabon, to wit:

The difference between Agabon and the instant case is that in the former, the dismissal was based
on a just cause under Article 282 of the Labor Code while in the present case, respondents were
dismissed due to retrenchment, which is one of the authorized causes under Article 283 of the same
Code.

xxxx

A dismissal for just cause under Article 282 implies that the employee concerned has committed, or
is guilty of, some violation against the employer, i.e., the employee has committed some serious
misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected his
duties. Thus, it can be said that the employee himself initiated the dismissal process.

On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply
delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by
the employer’s exercise of his management prerogative, i.e., when the employer opts to install labor
saving devices, when he decides to cease business operations or when, as in this case, he
undertakes to implement a retrenchment program.39

Then we elucidated on our ruling in Agabon in this wise:

Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but
the employer failed to comply with the notice requirement, the sanction to be imposed upon him
should be tempered because the dismissal process was, in effect, initiated by an act imputable to
the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the
employer failed to comply with the notice requirement, the sanction should be stiffer because the
dismissal process was initiated by the employer’s exercise of his management prerogative.40

The Agabon doctrine enunciates the rule that if the dismissal was for just cause but procedural due
process was not observed, the dismissal should be upheld. Where the dismissal is for just cause, as
in the instant case, the lack of statutory due process should not nullify the dismissal or render it
illegal or ineffectual. However, the employer should indemnify the employee for the violation of his
right to procedural due process. The indemnity to be imposed should be stiffer to discourage the
abhorrent practice of "dismiss now, pay later," which we sought to deter in the Serrano41ruling. In
Agabon42 the nominal damages awarded was ₱30,000.00.

Conformably, the award of backwages by the Labor Arbiter and the NLRC should be deleted and,
instead, private respondent should be indemnified in the amount of ₱30,000.00 as nominal
damages.43

WHEREFORE, premises considered, the instant Petition is DENIED. The Court of Appeals Decision
dated 14 June 2005 is hereby AFFIRMED WITH MODIFICATION in the sense that while there was
a valid ground for dismissal, the procedural requirements for termination as mandated by law and
jurisprudence were not observed. Respondent Treasure Island Corporation is ORDERED to pay the
amount of ₱30,000.00 as nominal damages. No costs.

SO ORDERED.
G.R. No. 159302 February 6, 2008

CITIBANK, N.A., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and ROSITA TAN PARAGAS, respondents.

DECISION

CARPIO MORALES, J.:

Subject of this petition for review is the National Labor Relations Commission (NLRC) Resolution
dated October 24, 2001 granting the MOTION FOR PARTIAL RECONSIDERATION of respondent
Rosita Tan Paragas (Rosita) relative to her appeal in an illegal dismissal case, which the Court of
Appeals affirmed in toto by Decision of January 24, 2003 and Resolution of July 29, 2003.1

Rosita was found by Labor Arbiter Geobel Bartolabac to be an employee of petitioner Citibank, N.A.
for around eighteen (18) years from August 8, 1979 to September 4, 1997. At the time her
employment was terminated by petitioner for serious misconduct, willful disobedience, gross and
habitual neglect of duties and gross inefficiency, she was occupying the position of filing clerk.

The relevant facts pertaining to respondent’s employment history may be gleaned from the following
salient portions of the labor arbiter’s Decision of June 29, 1998:

On 8 August 1979, complainant Paragas joined respondent Citibank as Secretary to the

Premises Administration (up to 1981): Corporate Teller (1981-1982): Secretary to Assistant
Vice Presidents Ed Katigbak and Z.P. Molina (up to 1987); Secretary to Vice-President-Legal
Counsel, Atty. Renato J. Fernandez (up [to] 1988); Secretary to the Employer/Employee
Relations Officer, Atty. Beatriz Alo and later to the Public Affairs Director Vice President,
Maximo J. Edralin, Jr. When the latter retired in 1992, complainant was assigned to Cash
Management Services as Remittance Processor.

Sometime in the early part of 1993, as a result of the reorganization, respondent bank
declared certain officers and employees, or their positions/functions, redundant. Among
these affected was complainant Paragas. However, to accommodate the union officers’
request, complainant’s employment was not terminated but was assigned to Records
Management Unit of the Quality Assurance Division as bank statement retriever, a filing clerk
job described by complainant as "non-brainer job."

In the latter part of July 1994, complainant was assigned to file Universal Account Opening
Forms (UAOF) in file boxes and retrieving such UAOFs from the file boxes upon internal
customers’ request from time to time. In the same month, she was also assigned to process
or develop microfilms. However, on 20 February 1995, she complained that the processing
of microfilms was proving to be harmful to her health. Thus, the job was reassigned to
another clerk. Accordingly, beginning 21 February 1995, complainant’s job in the bank was
to file and retrieve UAOFs. x x x
 xxxx

On 11 December 1996, complainant was assigned to undertake the special project of

reorganizing the UAOF’s from 13 December 1996 to 15 May 1997. The work to be done are
as follows:

a. Review of existing files in order to verify misfiles

b. Pull-out of misfiles and file them in their proper places

c. Interfile new/incoming UAOFs received for the day

d. Add new file boxes and make an allowance of at least ¾ inch for each file box for
incoming UAOFs and for future explasion [sic]

e. Labelling of all file boxes and Corporate UAOFs and their actual contents

f. Transfer of the UAOFs from the Citicenter basement to the new compactors at the
third floor

g. Submit a status report (accomplishment for the week) every Monday

On 10 January 1997, AVP Narciso Ferrera issued a Memo to complainant calling her
attention on the following, to wit:

10 January 1997

TO Rosita T. Paragas

CC: Randy J. Uson

SUBJECT: REORGANIZATION OF THE UNIVERSAL ACCOUNT OPENING

FORMS (UAOF’s)

In connection with the Reorganization of the Universal Account Opening Forms

(UAOF’s), I would like to call your attention on the following, viz:

a. Various misfiling on the reorganized UAOF file I had the reorganized file counter-
checked by your co-employees and they came out with the following misfiling, e.g.

1. Belo, Jose; Belo, Matilde, Belo William interfiled with BELLO

2. BARRAGER, RAYMOND misfiled with BARANGAN and BARANUELO

Box (BARBARO)

3. EUGENIO BARAOIDANs interfiled with BARNUEVO AND BARRAMEDA

4. VICTOR AGIUS filed with the AGUIRREs

5. Several AGUILAs interfiled with File box ALF-ALI

 6. LETICIA AMANSEC filed with AMAR and AMARGO

7. Several BARON interfiled between BARROGA AND BARRON

8. AMANDA CAMELLO interfiled between CAMERO and CAMERON

9. PETER CARSON interfiled between CARR and CARRAD

They went thru 9 files boxes only and found 9 misfiles. This level of errors is not
acceptable. Remember a misfiled document is considered LOST and you will have to
go through the file one by one to be able to retrieve it.

b. Submission of a weekly status report every Monday. As per our

agreement, report every Monday effective January 6, 1997. As of February
10, 1997; I have not received a single report from you.

c. Trimming/cutting of edges of attached documents like xerox copies of Ids,

Passports, Drivers license, etc. I would like to reiterate my previous
instructions to do away with the trimming and cutting of attached documents
as it only consumes valuable time and will prolong the reorganization
process. We started the reorganization last December 13, 1996 and as today
10 February 1997, you are still in letter C for a total of 163 file boxes. There
are still 348 file boxes to reorganize

d. Accumulation of incoming newly received UAOFs. I have noticed that you

have accumulated two (2) boxes full of personal UAOFs at the basement and
at the third floor. Arce and Sammy are complaining on the retrieval of these
files. It is taking them more time and efforts. In the monthly meeting we had
last December, 1996, interfiling incoming UAOFs is your responsibility.

In view of the above, please concentrate on the filing process and stop trimming the
attachments. Our goal in the reorganization of the UAOFs is ACCURATE FILING so
that these documents could be located when requested. I hope you exhaust all
means and efforts to finish the project within the given time frame.

Please be guided accordingly.

(Sgd.) Narciso M. Ferrera

Assistant Vice President

Again, on 2 April 1997, complainant received another memo from AVP Ferrera called her
attention (a) to the same nine (9) cases misfiled UAOF’s in Annex 16, (b) to three (3) other
cases of misfiled UAOFs (c) her persistent failure to submit weekly report on the progress of
her work under the Special Project, and (d) that despite the lapse of three (3) months, she
was still in letter D (or UAOFs covering clients whose surnames begin with letter D).

As she failed to complete the project on 30 May 1997, complainant was given another 30
days to complete it. However, by the end of June 1997, her accomplishment was only 30%
of the total work to be done.
 On 25 July 1997, AVP Ferrera directed complainant to explain in writing why her
employment should not be terminated on the ground of serious misconduct, willful
disobedience, gross and habitual neglect of her duties and gross inefficiency.
Correspondingly, complainant was placed under Preventive suspension. Complainant
submitted her written explanation on 31 July 1997.

On 29 August 1997, an administrative conference took place with the complainant, her
counsel and the Union President in attendance.

Finally, on 4 September 1997, the respondent bank thru AVP Ferrera notified complainant
that her written explanation and those which she ventilated during the administrative
conference held on 29 August 1997 were found self-serving, and consequently, terminating
her employment on the ground of serious misconduct, willful disobedience, gross and
habitual neglect of duties and gross inefficiency.2

Following the termination of her services, respondent filed a complaint for illegal dismissal, praying
for reinstatement, backwages, damages and attorney’s fees.3 By the aforementioned Decision of
June 29, 1998, the labor arbiter dismissed the complaint for lack of merit, finding that her dismissal
on the ground of work inefficiency was valid.

On appeal, the NLRC, by Resolution of October 24, 2000, affirmed the decision of the labor arbiter
with the modification that respondent should be paid separation pay "as a form of equitable relief" in
view of her length of service with petitioner.

Respondent filed a MOTION FOR PARTIAL RECONSIDERATION of the NLRC Resolution. She no
longer challenged her dismissal on the ground of work inefficiency, but prayed that petitioner be
ordered to pay her the "Provident Fund" benefits under its retirement plan for which she claimed to
be qualified pursuant to petitioner’s "Working Together" Manual, specifically the provision on page
12.5 thereof which states:

Should you (employee) resign or be discharged for reasons other than misconduct prior
to your earliest retirement date, you will be paid a percentage of your share in the Fund
according to the following schedule:

Completed Years of Vesting

Continuous Service
20 or more years 100%
19 years 95%
18 years 90%
xxxx x x x x4

(Emphasis and underscoring supplied)

Respondent, claiming that the labor arbiter upheld her dismissal on the ground of merely "work
inefficiency" and not for any misconduct on her part, asserted that she is entitled to 90% of the
retirement benefits.

Petitioner did not move to reconsider the NLRC October 24, 2000 Resolution.
Finding that respondent’s dismissal was "for causes other than misconduct," the NLRC, by the
above-mentioned October 24, 2001 Resolution granted respondent’s motion for partial
reconsideration.5 Petitioner moved to reconsider this Resolution, but the same was denied by the
NLRC.

Petitioner thereupon filed a petition for certiorari with the Court of Appeals to set aside and nullify the
October 24, 2001 NLRC Resolution. The appellate court, by Decision dated January 24, 2003,
dismissed petitioner’s petition for lack of merit and affirmed in toto the challenged NLRC Resolution.
Its motion for reconsideration having been denied by the appellate court by Resolution of July 29,
2003, the present petition6 was filed, petitioner asserting as follows:

1. The NLRC has no authority to pass upon and resolve issues and grant claims not pleaded
and proved before the Labor Arbiter.

2. The NLRC acted without authority or without or in excess of jurisdiction when it granted
the entirely new/subsequent claim (for payment of retirement benefits) of Paragas.

3. In any case, (a) the actuations of Paragas narrated in petitioner’s motion for
reconsideration [of the NLRC Resolution dated October 24, 2001] for which petitioner had
dismissed her on the ground of Serious Misconduct, among other grounds and (b) the
decision of the Labor Arbiter dismissing Paragas’ complaint for illegal dismissal for lack of
merit, which the NLRC affirmed, show that Paragas is not entitled to her new claim for
retirement benefits; for as Paragas herself has shown in her motion for partial
reconsideration, under the Retirement Plan of the bank a bank employee who has been
dismissed for misconduct is not entitled to retirement benefit.

4. In any event, even assuming that Paragas was entitled to retirement benefit, her claim
therefor is already time-barred.

5. Thus, the Court of Appeals erred when it dismissed petitioner’s petition in CA-G.R. No. SP
69642.7

The petition is impressed with merit.

That respondent did not expressly claim retirement benefits in the proceedings before the labor
arbiter is not disputed. Indeed, she admits that the first time she explicitly prayed for such benefits
was in her Motion for Partial Reconsideration filed with the NLRC. She argues, nonetheless, that the
grant thereof by the NLRC was warranted based on the principle that rules of procedure and
evidence should not be applied rigidly and technically in labor cases. Moreover, she alleges that her
claim for retirement benefits was implicit in her general prayer in her position paper for "such other
reliefs as may be just and equitable."

While it is established that technical rules of procedure may be relaxed in labor cases, Mañebo v.
NLRC8 instructs

We wish, however, to stress some points. Firstly, while it is true that the Rules of the NLRC
must be liberally construed and that the NLRC is not bound by the technicalities of law and
procedure, the Labor Arbiters and the NLRC itself must not be the first to arbitrarily
disregard specific provisions of the Rules which are precisely intended to assist the
parties in obtaining just, expeditious, and inexpensive settlement of labor
disputes. One such provision is Section 3, Rule V of the New Rules of Procedure of the
NLRC which requires the submission of verified position papers within fifteen days from the
 date of the last conference, with proof of service thereof on the other parties. The position
papers "shall cover only those claims and causes of action raised in the complaint excluding
those that may have been amicably settled, and shall be accompanied by all supporting
documents including the affidavits of their respective witnesses which shall take the place of
the latter’s testimony." After the submission thereof, the parties "shall…not be allowed to
allege facts, or present evidence to prove facts, not referred to and any cause or causes of
action not included in the complaint or position papers, affidavits and other
documents." (Emphasis and underscoring supplied)

Respondent indeed prayed for "other just and equitable relief," but the same may not be interpreted
so broadly as to include even those which are not warranted by the factual premises alleged by a
party. Thus the January 24, 2003 Decision of the Court of Appeals correctly stated: "It has been
ruled in this jurisdiction that the general prayer for ‘other reliefs’ is applicable to such other reliefs
which are warranted by the law and facts alleged by the respondent in her basic pleadings and not
on a newly created issue."9 (Underscoring supplied) Particularly in People v. Lacson,10 this Court
held:

x x x Case law has it that a prayer for equitable relief is of no avail, unless the petition
states facts which will authorize the court to grant such relief. A court cannot set itself in
motion, nor has it power to decide questions except as presented by the parties in their
pleadings. Anything that is resolved or decided beyond them is coram non judice and void.
(Emphasis supplied)

Respondent’s assertion that she mentioned the matter regarding the Provident Fund even prior to
her Motion for Partial Reconsideration – on page 14 of her position paper and again on pages 2 and
7 of her "Notice of Appeal and Appeal Memorandum" – is unavailing.

Her "Notice of Appeal and Appeal Memorandum" was filed after she had already submitted her
position paper. Thus, any mention of the Provident Fund therein would fail to adhere to the above-
ruling in Mañebo, the thrust of which was precisely that all facts, evidence, and causes of action
should already be proffered in the position papers and the supporting documents thereto, not in any
later pleading.

As to respondent’s position paper, there was only the mere mention of "Provident A & C," with the
corresponding amount of P1,086,335.43, among the actual damages that she was allegedly
suffering from her continued severance from employment.11 Respondent made no attempt to define
what this "Provident A & C" was, nor offer any substantiation for including it to be among her actual
damages. She did not even hint how "Provident A & C" had a bearing on retirement benefits. Thus,
while respondent did refer to the Provident Fund in her position paper, such reference was too
vague to be a basis for any court or administrative body to grant her retirement benefits.

Respondent justifies her failure to claim for retirement benefits before the labor arbiter by alleging
that it would be inconsistent with her prayer for reinstatement. Respondent, however, could have
easily claimed such benefits as an alternative relief.

In any event, respondent is not entitled to retirement benefits as this Court finds that she was validly
dismissed for serious misconduct and not merely for work inefficiency.

While findings of fact in administrative decisions such as those rendered by the NLRC are to be
accorded not only great weight and respect, but even finality, the rule only applies for as long as
these findings are supported by substantial evidence.12 In the present case, the NLRC
was absolutely silent on why it did not give credence to petitioner’s evidence on respondent’s
misconduct. It was content merely to state that "the separation is not for reasons of misconduct but
for other grounds"13 without any substantiation and in total disregard of the evidence proffered by
petitioner. Colegio de San Juan de Letran-Calamba v. Villas14 instructs:

Likewise, findings of fact of administrative agencies and quasi-judicial bodies which have
acquired expertise because their jurisdiction is confined to specific matters, are generally
accorded not only great respect but even finality. They are binding upon this Court unless
there is a showing of grave abuse of discretion or where it is clearly shown that they
were arrived at arbitrarily or in utter disregard of the evidence on record. (Emphasis
and underscoring supplied)

True, the NLRC adopted the findings of the labor arbiter, but the labor arbiter did not expressly
rule on the issue of respondent’s alleged misconduct – which is not surprising, for a ruling
thereon was not then strictly necessary. At that stage, the main issue which had to be resolved was
only whether respondent’s dismissal was valid, and not whether she was qualified for retirement
benefits. Only when respondent raised the claim of retirement benefits did it become crucial to
determine whether she was validly dismissed on the specific ground of serious misconduct, not only
on the ground of poor work performance.

As reflected above, this Court, after a review of the NLRC finding that respondent did not commit
serious misconduct, finds otherwise.

While the labor arbiter did not explicitly rule that respondent committed serious misconduct, his
decision leads to that conclusion, for the documentary evidence which it cites as basis to prove her
work inefficiency shows, upon close examination, also her commission of serious misconduct.

In support of its ruling that respondent’s dismissal was valid, the labor arbiter relied on the
performance appraisals of respondent from July to December 1994, from January to June 1995,
and from July to December 1996, all of which were submitted by petitioner’s Assistant Vice-
President, Narciso M. Ferrera. The labor arbiter noted that Ferrera’s evaluation of respondent
was not lacking in objectivity.

These performance appraisals, however, did not merely show that respondent was not able to meet
performance targets. More relevantly, they also consistently noted significant behavioral and
attitudinal problems in respondent. In particular, respondent was found to be very
argumentative;15 she had difficulty working with others;16 she was hard to deal with;17 and she never
ceased being the subject of complaints from co-workers.18

Moreover, beyond the documents referred to in the labor arbiter’s decision, there are other pieces of
evidence on record which further establish that respondent was validly dismissed not only for work
inefficiency but for serious misconduct. The Court sees no reason why these should not be accorded
credibility along with those cited by the labor arbiter.

The assessment of respondent’s performance by Randy Uson, another superior of respondent, was
given weight by the labor arbiter who noted that Uson was "described as [a] very professional and
fair person by complainant [herein-respondent] herself."19 Significantly, Uson later commented on
respondent’s behavior as follows:

"Less tangible but none the less real, are the common concerns raised by her peers and
supervisor, on the stress and tension created when Rose is around. The conscious
effort to ‘get out of her way’ and avoid conflict, hinders productivity and efficiency and
 has adversely affected the morale of the entire unit. x x x"20 (Emphasis and underscoring
supplied)

More. For the appraisal period from June to December 1995, respondent’s performance appraisal
report stated that her attitude towards her work, the bank, and superiors needed reformation.21 The
report for January to June 1996 made the same observation,22 indicating that there was no
improvement on her part.

The performance appraisal report of respondent for the period of January to June 1997, besides
stating that she was still "hard to deal with," described her as "belligerent," one who had "a negative
presence which affects the morale of the entire unit," and who "pick[ed] fights with peers and other
employees even without provocation."23

The evaluation of respondent cited above finds corroboration in her admission that "she may have
been tactless and insolent in dealing with her superior but it does not allegedly warrant the supreme
penalty of dismissal."24

Finally, even the NLRC, its later ruling that respondent was not guilty of misconduct notwithstanding,
was aware that the problem with respondent was not merely her poor work output, but her
unreasonable behavior and unpleasant deportment. Thus, as its Resolution of October 24, 2000
drew to a close, it stated that petitioner was "correct" in invoking Cathedral School of Technology v.
NLRC,25 specifically the following portion of this Court’s decision therein:

An evaluative review of the records of this case nonetheless supports a finding of a just
cause for termination. The reason for which private respondent’s services were terminated,
namely, her unreasonable behavior and unpleasant deportment in dealing with the
people she closely works with in the course of her employment, is analogous to the other
"just causes" enumerated under the Labor Code. (Emphasis supplied)

It bears noting that petitioner cited Cathedral School of Technology in its Comment/Reply to
Complainant-Appellant’s Appeal Memorandum precisely to show that its dismissal of complainant on
the ground of "gross inefficiency and unreasonable behavior" (emphasis supplied) was correctly
upheld by the labor arbiter.26

When an employee, despite repeated warnings from the employer, obstinately refuses to curtail a
bellicose inclination such that it erodes the morale of co-employees, the same may be a ground for
dismissal for serious misconduct.

As this Court held in National Service Corp. v. Leogardo, Jr.,27 "[a] series of irregularities when put
together may constitute serious misconduct, which under Article 283 of the Labor Code, is a just
cause for termination." And as it held in Asian Design and Manufacturing Corporation v. Deputy
Minister of Labor, acts destructive of the morale of one’s co-employees may be considered serious
misconduct.28

It is respondent’s obstinate refusal to reform herself which ultimately persuades this Court to find that
her dismissal on the ground of serious misconduct was valid. Clearly, the following statement of
Jaime R. Paraiso, head of petitioner’s Records Management Unit, quoted with approval both by the
labor arbiter and the NLRC, relates not only to respondent’s inefficiency but also to her admittedly
tactless and insolent dealings with her superior.

While we all have strengths and good points we also have weaknesses and shortcomings.
However, the first step towards self-improvement is acknowledging and accepting
 one’s weaknesses and shortcomings. This is followed by a resolve to change for the
better, in turn followed by appropriate action. These elements are not evident in the
responses given [by respondent to the performance appraisal report] and there is no
clear indication of a desire for self-improvement or any plans in that direction. There
continues to be a need to address this situation.29 (Emphasis supplied)

Having been validly dismissed on the ground of serious misconduct, respondent is thus disqualified
from receiving her retirement benefits pursuant to the provision of petitioner’s "Working Together"
Manual quoted earlier.

WHEREFORE, the petition is GRANTED. The Court of Appeals Decision of January 24, 2003 and
Resolution of July 29, 2003 are SET ASIDE. The NLRC Resolution dated October 24, 2001 granting
private respondent’s MOTION FOR PARTIAL RECONSIDERATION is thus VACATED.

SO ORDERED.

G.R. No. 163270 September 11, 2009

EDUARDO M. TOMADA, SR., Petitioner,

vs.
RFM CORPORATION-BAKERY FLOUR DIVISION and JOSE MARIA CONCEPCION
III, Respondents.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 assailing the Decision2 promulgated on 23 December 2003 as well as
the Resolution3promulgated on 19 April 2004 of the Court of Appeals (appellate court) in CA-G.R. SP
Nos. 69901 and 70069. The appellate court dismissed the petition filed by Eduardo M. Tomada, Sr.
(Tomada) and partially granted the petition filed by RFM Corporation-Bakery Flour Division and Jose
Maria Concepcion III (respondents). The appellate court affirmed the decision of the National Labor
Relations Commission (NLRC) with the modification that RFM Corporation should pay Tomada
₱127,660 as separation pay.

The Facts

The appellate court narrated the facts as follows:

On February 24, 1998, [Tomada] filed a complaint for illegal dismissal against RFM Corporation
Bakery Flour Division and Jose Ma. Concepcion, Jr.
The case was subsequently assigned to Labor Arbiter Daniel C. Cueto who required both parties to
submit their respective position papers. In his position paper, [Tomada] alleged:

"x x x xxx xxx

2. That I have worked with the said company since March 9, 1979 and my latest salary
therein is ₱491.00 per day;

3. That the company dismissed me from work because I was allegedly sleeping on my job
during my working time and in the process, I failed to detect the fire which was taking place
inside my work area;

4. That I was not sleeping however and was never negligent in my job;

5. That on November 22, 1997, there was no certified operator manning the third floor of the
flour mill. What was present there was only a trainee;

6. Since there was no certified operator in the third floor, I was forced to go up to the said
area whenever there was trouble even if my assigned area was only at the second floor
where I was head spoutman;

7. At about 9:00 in the evening of November 22, 1997, the B3A Plan Sifter at the 3rd Floor
choked up. I was therefore forced to go up to the said area to assist the trainee (Fernando
Filarea) to attend to the said trouble;

8. After attending to the choke-up, I went up to the Fourth Floor to inspect the cyclone if it
had trouble also;

9. After seeing that the cyclone was in good condition, I went down to the second floor but
felt the call of nature so I entered the screen room from where I could proceed to the comfort
room;

10. That at the screen room, I tried to fight the urge to relieve myself and it was at this point
in time when Ver Ignacio, the duty shift miller arrived and told me that there was a fire at the
bran grinder;

11. That I assisted in putting out said fire but Ver Ignacio eventually charged me with
sleeping on my job which resulted to my dismissal on January 26, 1998;

12. That as I have explained earlier, I was not sleeping on my job. I was not also negligent. If
ever I was not at the vicinity of the bran grinder at the time of the fire, it was because I
attended to a trouble at the 3rd floor and inspected the 4th floor due to the lack of available
personnel therein;

13. That under the circumstances, it is clear that my dismissal was illegal."

For their part, RFM and Jose Ma. Concepcion made the following allegations in their position paper:

1. The complainant was a former employee of the respondent, assigned to the position
headspoutman of the Flour Milling Department at the time of his termination;
2. As headspoutman of the Flour Milling Department, the complainant was assigned at the
second floor and is in-charge of the bran grinding machine on the same floor;

3. Sometime on November 22, 1997, at about 9:00 in the evening, Aries Lazaro, a
contractual employee assigned at the Semolina Tipping, noticed the thick smoke coming
from the bran;

4. That when he made an investigation, the said employee noticed that smoke was coming
from the bran grinding machine and the bran being grounded inside the machine was
already smoldering;

5. That immediately, Aries Lazaro went down to the ground floor to seek assistance and
found Heronico Mancilla;

6. Together, they went back upstairs to the second floor to try to contain the fire;

7. It was then that Heronico Mancilla instructed Aries Lazaro to go down and call Virgilio F.
Ignacio, the Shift Miller on duty;

8. That Virgilio F. Ignacio hurriedly ran upstairs and found that the fire was already growing
rapidly;

9. That immediately, Virgilio F. Ignacio went down to the ground floor panel board to shut
down mills II and IA;

10. That when Virgilio F. Ignacio returned to the bran grinding machine at the second floor,
he found Heronico Mancilla, Fernando Felarca and a number of flour packers were already
trying to stop the fire with the use of fire extinguishers;

11. Realizing that the packing area and the screen room were still operating, Virgilio F.
Ignacio ran to the panel board of the packing area to shut down the machine and then to the
screen room, likewise with the intention of shutting off the screen room machine;

12. That it was in the screen room, an air-conditioned room, where Virgilio F. Ignacio found
the complainant [Tomada] who was supposed to be at the second floor watching and
monitoring the machine thereat, soundly asleep on top of two (2) units of automatic voltage
regulators (AVR);

13. That it was only after Virgilio F. Ignacio woke the complainant up did the latter proceed to
the bran grinding machine room on the second floor;

14. The following day, November 23, 1997, Virgilio F. Ignacio submitted a memorandum
report of the incident, a copy of which is hereto attached as Annex ‘1’;

15. That same day, a memorandum was likewise issued to the complainant, requiring him to
explain within 48 hours why no disciplinary action should be taken against him for violating
company rules and regulations, a copy of the memorandum is hereto attached as Annex ‘2’;

16. In compliance [with] the aforesaid memorandum, the complainant submitted his written
explanation dated November 27, 1997, a copy of which is hereto attached as Annex ‘3’;
 17. In a memorandum dated December 4, 1997, the complainant was served notice that his
case was set for administrative investigation on December 6, 1997 and that he was directed
to attend the said investigation, a copy of the memorandum is hereto attached as Annex ‘4’;

18. The investigation and hearings were set three (3) times where the complainant was
apprised of the nature and the cause of the charges against him; afforded the opportunity of
confronting the witness against him; and full opportunity to present his side duly assisted by
a representative of his own choice;

19. After hearing, investigation and evaluation of complainant’s case, management found
him guilty of violating company rules and regulations #32, that of sleeping on company time
outside of work area with adverse effect or damage, and his services were terminated. A
copy of the Memorandum dated February 21, 1998 is hereto attached as Annex ‘5.’

Both parties filed their respective Reply to the Position Papers and Rejoinder to Reply. Thereafter,
the case was submitted for decision.4

The Labor Arbiter’s Ruling

In his Decision dated 4 May 2000, the Labor Arbiter dismissed Tomada’s case for lack of merit. The
Labor Arbiter found that Tomada was grossly remiss in performing his assigned duties and his
separation from work was justified. The Labor Arbiter further stated that:

Precisely, personnel rules and regulations are promulgated as a vital component in sound personnel
administration and for as long as the rules and regulations are reasonable in character and in
application, this Office should not interfere in the matter of its exercise. Such is part and parcel of the
duly recognized prerogatives of management in instilling discipline to its employees that should not
be interferred [sic] into by this Tribunal.

In the case at bar, since the rules and regulations upon which [Tomada’s] dismissal was based are
reasonable in application and it appearing that [Tomada] by his conduct shown violated the rules
against sleeping on company time that caused damage and/or adverse effect to the respondent’s
operation his conduct is considered serious and thus cannot be taken lightly by this Office
considering the unfavorable and serious impact on respondent’s business which also deserves legal
protection against erring personnel like in the case of [Tomada].

[Tomada’s] act amounted to dereliction of duty and gross negligence which is a legal ground to
dismiss him for cause.

[Tomada], it appears, was given the opportunity to explain his side but sadly, it was not convincing to
us based on the factual milieu of the case.

WHEREFORE, instant case is dismissed for lack of merit.

SO ORDERED.5

The Ruling of the NLRC

Tomada filed an appeal before the NLRC. In its Decision promulgated on 22 October 2001, the
NLRC also dismissed Tomada’s appeal for lack of merit. The NLRC reiterated the Labor Arbiter’s
findings that Tomada was not only absent from his area of responsibility at the time the fire started in
the second floor, but Tomada was also sleeping in the screen room. The NLRC, however, modified
the Labor Arbiter’s decision when it decreed that Tomada should receive separation pay, equivalent
to one-half month’s pay for every year of service with a fraction of six months considered as one
whole year, since the cause of Tomada’s dismissal was not reflective of his moral character.

On 12 December 2001, the NLRC resolved to deny Tomada’s Motion for Reconsideration for lack of
merit.6

The Decision of the Appellate Court

Tomada, as well as respondents, assailed the NLRC’s decision and resolution before the appellate
court. Tomada imputed grave abuse of discretion upon the NLRC in sustaining the validity of his
dismissal from employment. On the other hand, respondents questioned the NLRC’s grant of
separation pay to Tomada, as well as Jose Maria Concepcion III’s joint liability with RFM
Corporation.

The appellate court ruled that Tomada’s dismissal from employment was valid. RFM Corporation
entrusted Tomada with the responsibility involving a delicate matter, that of the care, custody and
operation of the bran grinding machine for the duration of his duty. The nature of Tomada’s
infraction, leaving his post and sleeping while on duty, rendered Tomada unworthy of the trust and
confidence demanded by his position. The appellate court agreed with the NLRC’s award of
separation pay to Tomada. The appellate court considered Tomada’s service to RFM Corporation for
20 years, as well as his commission of only one, yet very serious, violation of company rules.
However, the appellate court modified the NLRC’s ruling regarding Jose Maria Concepcion III’s
liability. The award of separation pay may only be enforced against RFM Corporation because of the
corporation’s separate juridical personality. A stockholder or an officer of a corporation cannot be
made personally liable for corporate liabilities in the absence of malice or bad faith. The dispositive
portion of the appellate court’s decision reads as follows:

WHEREFORE, the petition filed by Eduardo Tomada, Sr. is hereby DISMISSED and the petition
filed by petitioners RFM and Jose Ma. Concepcion is PARTIALLY GRANTED. Accordingly, the
assailed decision of public respondent dated October 22, 2001 is hereby AFFIRMED with
modification that petitioner RFM Corporation – Bakery, Flour Division is hereby ordered to pay
Eduardo M. Tomada, Sr. his separation pay in the amount of ₱127,660.00

SO ORDERED.7

The appellate court denied both parties’ respective motions for reconsideration in a Resolution
promulgated on 19 April 2004.8

All parties filed their respective petitions for review before this Court. On 13 March 2006, we issued a
Resolution denying respondents’ petition, docketed as G.R. Nos. 163263-64, for failure to file the
required reply. Respondents, however, filed the requisite comment to the present petition. On 23
June 2008, this Court resolved to deconsolidate the present petition from G.R. Nos. 163263-64 in
view of our 13 March 2006 Resolution.

The Issues

Tomada raises the following grounds for allowance of his petition:

 1. The appellate court committed a serious error of law in imposing the penalty of dismissal
upon Tomada despite the fact that respondents did not sustain any damage on account of
Tomada’s supposed negligence.

2. The appellate court’s ruling that Tomada was negligent in his job is a patent nullity and
should be reversed.9

The Ruling of the Court

The petition has no merit. We see no reason to overturn the factual findings of the Labor Arbiter,
which were subsequently approved by the NLRC and the appellate court. The present case adheres
to the rule that factual findings of quasi-judicial and administrative bodies are accorded great respect
and even finality by the courts. Tomada failed to show that the factual findings were arbitrarily made
and disregarded evidence on record.

Serious Misconduct as a Just Cause for Dismissal

Tomada’s acts constitute serious misconduct, one of the five enumerated causes for termination by
employer in Article 282 of the Labor Code.

Art. 282. Termination by employer. — An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work;

xxxx

By sleeping on the job and leaving his work area without prior authorization, Tomada did not merely
disregard company rules. Tomada, in effect, issued an open invitation for others to violate those
same company rules. Indeed, considering the presence of trainees in the building and Tomada’s
acts, Tomada failed to live up to his company’s reasonable expectations. Tomada’s offenses cannot
be excused upon a plea of being a "first offense," or have not resulted in prejudice to the company in
any way. No employer may rationally be expected to continue in employment a person whose lack of
morals, respect and loyalty to his employer, regard for his employer’s rules, and appreciation of the
dignity and responsibility of his office, has so plainly and completely been bared.10

Misconduct is improper or wrong conduct. It is the transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent
and not mere error of judgment. The misconduct to be serious must be of grave and aggravated
character and not merely trivial or unimportant. Such misconduct, however serious, must
nevertheless be in connection with the employee’s work to constitute just cause for his separation.
Thus, for misconduct or improper behavior to be a just cause for dismissal, (1) it must be serious; (2)
it must relate to the performance of the employee’s duties; and (3) it must show that the employee
has become unfit to continue working for the employer. Indeed, an employer may not be compelled
to continue to employ such person whose continuance in the service would be patently inimical to
his employer’s interest.11
1avv phi 1

The present case fulfills the requisites mentioned above. The Labor Arbiter established the following
facts:
 1. That the fire incident occurred in the second floor of the building which is specifically within
the area of jurisdiction of [Tomada].

2. That at the time of the occurrence of the fire, [Tomada] was on duty but he was not in his
area of work/jurisdiction and that his absence in his area was without any approval of the
supervisory authorities and/or incurred for an urgent nature which are official in character. It
is not shown that [Tomada] is authorized to trouble shoot or conduct inspection beyond his
area of jurisdiction.

3. That [Tomada] no less admitted that he entered the screenroom on November 22, 1997,
the night when the incident occurred. The screenroom does not appear to be within the area
of work jurisdiction of [Tomada]. It is the place where [Tomada] was located by supervisor
Ver Ignacio when the fire was already taking place.

4. The official fire incident (Annex 1, respondent’s position paper) of supervisor Ignacio that
he saw [Tomada] "soundly sleeping atop two (2) units of AVR at screenroom," was not
effectively rebutted by [Tomada] other than his bare denial. The fact however remains
undisputed that it was at the screenroom where [Tomada] was caught by Supervisor Ver
Ignacio at the very time when the fire broke out in [Tomada’s] actual area of work wherein he
was supposed to be working during the time of the incident. There is no showing that
Supervisor Ignacio’s report was motivated by personal ill-will or motive as to create a
suspicion or belief that his report was personally motivated to oust [Tomada] from his job.

5. [Tomada’s] allegation that he was attending to some trouble shooting works at the third
and fourth floors was not established by concrete and convincing evidence. On the contrary,
the logbook entries presented by the respondent (Annex "2," Reply (respondent)), do not
indicate any trouble shooting work to be undertaken in the said sections of the third and
fourth floors.12

It has been shown that Tomada, in the normal and routine exercise of his functions, was directly
responsible for a significant portion of respondents’ property. By his acts, Tomada is guilty of serious
misconduct, such that he is not entitled to financial assistance or separation pay. Indeed, the Labor
Arbiter even categorized Tomada’s acts under "dereliction of duty and gross negligence."

Although his nearly two decades of service might generally be considered for some form of financial
assistance to shield him from the effects of his termination, Tomada’s acts reflect a regrettable lack
of concern for his employer. If length of service justifies the mitigation of the penalty of dismissal,
then this Court would be awarding disloyalty, distorting in the process the meaning of social justice
and undermining the efforts of labor to cleanse its ranks of undesirables.13

WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 23 December 2003
as well as the Resolution promulgated on 19 April 2004 of the Court of Appeals in CA-G.R. SP Nos.
69901 and 70069 with the MODIFICATION that the grant of separation pay to Eduardo M. Tomada,
Sr. is DISALLOWED.

SO ORDERED.
G.R. No. 164016 March 15, 2010

RENO FOODS, INC., and/or VICENTE KHU, Petitioners,

vs.
Nagkakaisang Lakas ng Manggagawa (NLM) - KATIPUNAN on behalf of its member, NENITA
CAPOR,Respondent.

DECISION

DEL CASTILLO, J.:

There is no legal or equitable justification for awarding financial assistance to an employee who was
dismissed for stealing company property. Social justice and equity are not magical formulas to erase
the unjust acts committed by the employee against his employer. While compassion for the poor is
desirable, it is not meant to coddle those who are unworthy of such consideration.

This Petition for Review on Certiorari1 assails the June 3, 2004 Decision2 of the Court of Appeals
(CA) in CA-G.R. SP No. 76789 which denied the petition for certiorari filed by the petitioners and
affirmed the award of financial assistance to respondent Nenita Capor.

Factual Antecedents

Petitioner Reno Foods, Inc. (Reno Foods) is a manufacturer of canned meat products of which
Vicente Khu is the president and is being sued in that capacity. Respondent Nenita Capor (Capor)
was an employee of Reno Foods until her dismissal on October 27, 1998.

It is a standard operating procedure of petitioner-company to subject all its employees to reasonable

search of their belongings upon leaving the company premises. On October 19, 1998, the guard on
duty found six Reno canned goods wrapped in nylon leggings inside Capor’s fabric clutch bag. The
only other contents of the bag were money bills and a small plastic medicine container.

Petitioners accorded Capor several opportunities to explain her side, often with the assistance of the
union officers of Nagkakaisang Lakas ng Manggagawa (NLM) – Katipunan. In fact, after petitioners
sent a Notice of Termination to Capor, she was given yet another opportunity for reconsideration
through a labor-management grievance conference held on November 17, 1999. Unfortunately,
petitioners did not find reason to change its earlier decision to terminate Capor’s employment with
the company.

On December 8, 1998, petitioners filed a complaint-affidavit against Capor for qualified theft in the
Office of the City Prosecutor, Malabon-Navotas Substation. On April 5, 1999, a Resolution3 was
issued finding probable cause for the crime charged. Consequently, an Information was filed against
Capor docketed as Criminal Case No. 207-58-MN.

Meanwhile, the Nagkakaisang Lakas ng Manggagawa (NLM) – Katipunan filed on behalf of Capor a
complaint4 for illegal dismissal and money claims against petitioners with the Head Arbitration Office
of the National Labor Relations Commission (NLRC) for the National Capital Region. The complaint
prayed that Capor be paid her full backwages as well as moral and exemplary damages. The
complaint was docketed as NLRC NCR Case No. 00-01-00183-99.

Ruling of the Labor Arbiter

In the proceedings before the Labor Arbiter, Capor alleged that she was unaware that her clutch bag
contained the pilfered canned products. She claimed that petitioners might have planted the
evidence against her so it could avoid payment of her retirement benefits, as she was set to retire in
about a year’s time.

After the submission of the parties’ respective position papers, the Labor Arbiter rendered his
Decision5 dated November 16, 1999 finding Capor guilty of serious misconduct which is a just cause
for termination.

The Labor Arbiter noted that Capor was caught trying to sneak out six cans of Reno products without
authority from the company. Under Article 232 of the Labor Code, an employer may terminate the
services of an employee for just cause, such as serious misconduct. In this case, the Labor Arbiter
found that theft of company property is tantamount to serious misconduct; as such, Capor is not
entitled to reinstatement and backwages, as well as moral and exemplary damages.

Moreover, the Labor Arbiter ruled that consistent with prevailing jurisprudence, an employee who
commits theft of company property may be validly terminated and consequently, the said employee
is not entitled to separation pay.6

Ruling of the National Labor Relations Commission

On appeal, the NLRC affirmed the factual findings and monetary awards of the Labor Arbiter but
added an award of financial assistance. The decretal portion of the September 20, 2002
Decision7 reads:

WHEREFORE, premises considered, the decision under review is hereby MODIFIED by granting an
award of financial assistance in the form of separation pay equivalent to one-half month pay for
every year of service. In all other respects the decision stands affirmed. All other claims of the
complainant are dismissed for lack of merit.8

Both parties moved for a reconsideration of the NLRC Decision. Petitioners asked that the award of
financial assistance be deleted, while Capor asked for a finding of illegal dismissal and for
reinstatement with full backwages.9

On February 28, 2003, the NLRC issued its Resolution10 denying both motions for reconsideration
for lack of merit.

Ruling of the Court of Appeals

Aggrieved, petitioners filed a Petition for Certiorari11 before the CA imputing grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the NLRC for awarding financial
assistance to Capor.

Citing Philippine Long Distance Telephone Company v. National Labor Relations

Commission,12 petitioners argued that theft of company property is a form of serious misconduct
under Article 282(a) of the Labor Code for which no financial assistance in the form of separation
pay should be allowed.

Unimpressed, the appellate court affirmed the NLRC’s award of financial assistance to Capor. It
stressed that the laborer’s welfare should be the primordial and paramount consideration when
carrying out and interpreting provisions of the Labor Code. It explained that the mandate laid down in
Philippine Long Distance Telephone Company v. National Labor Relations Commission 13 was not
absolute, but merely directory.

Hence, this petition.

Issue

The issue before us is whether the NLRC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in granting financial assistance to an employee who was validly dismissed for
theft of company property.

Our Ruling

We grant the petition.

Conviction in a criminal case is not necessary to find just cause for termination of employment.

On the date that the appellate court issued its Decision, Capor filed a Manifestation14 informing the
CA of her acquittal in the charge of qualified theft. The dispositive portion of said Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered acquitting Nenita Capor of the
crime charged against her in this case on the ground of reasonable doubt with costs de oficio.

Capor thus claims that her acquittal in the criminal case proves that petitioners failed to present
substantial evidence to justify her termination from the company. She therefore asks for a finding of
illegal dismissal and an award of separation pay equivalent to one month pay for every year of
service.

On the other hand, petitioners argue that the dismissal of a criminal action should not carry a
corresponding dismissal of the labor action since a criminal conviction is unnecessary in warranting
a valid dismissal for employment.

Petitioners further maintain that the ruling in Philippine Long Distance Telephone Company v.
National Labor Relations Commission15 regarding the disallowance of separation pay for those
dismissed due to serious misconduct or moral turpitude is mandatory. Petitioners likewise argue that
in Zenco Sales, Inc. v. National Labor Relations Commission,16 the Supreme Court found grave
abuse of discretion on the part of the NLRC when it ignored the principles laid down in the Philippine
Long Distance Telephone Company v. National Labor Relations Commission. Thus, petitioners pray
for the reversal of the CA Decision and reinstatement of the Labor Arbiter’s Decision dated
November 16, 1999.

Capor was acquitted in Criminal Case No. 207-58-MN based on reasonable doubt. In his Decision,
the trial judge entertained doubts regarding the guilt of Capor because of two circumstances: (1) an
ensuing labor dispute (though it omitted to state the parties involved), and (2) the upcoming
retirement of Capor. The trial judge made room for the possibility that these circumstances could
have motivated petitioners to plant evidence against Capor so as to avoid paying her retirement
benefits. The trial court did not categorically rule that the acts imputed to Capor did not occur. It did
not find petitioners’ version of the event as fabricated, baseless, or unreliable. It merely
acknowledged that seeds of doubt have been planted in the juror’s mind which, in a criminal case, is
enough to acquit an accused based on reasonable doubt. The pertinent portion of the trial court’s
Decision reads:
During the cross examination of the accused, she was confronted with a document that must be
related to a labor dispute. x x x The Court noted very clearly from the transcript of stenographic
notes that it must have been submitted to the NLRC. This is indicative of a labor dispute which,
although not claimed directly by the accused, could be one of the reasons why she insinuated that
evidence was planted against her in order to deprive her of the substantial benefits she will be
receiving when she retires from the company. Incidentally, this document was never included in the
written offer of evidence of the prosecution.

Doubt has, therefore, crept into the mind of the Court concerning the guilt of accused Nenita Capor
which in this jurisdiction is mandated to be resolved in favor of her innocence.

Pertinent to the foregoing doubt being entertained by this Court, the Court of Appeals citing People
v. Bacus, G.R. No. 60388, November 21, 1991: "the phrase ‘beyond reasonable doubt’ means not a
single iota of doubt remains present in the mind of a reasonable and unprejudiced man that a person
is guilty of a crime. Where doubt exists, even if only a shred, the Court must and should set the
accused free." (People v. Felix, CA-G.R. No. 10871, November 24, 1992)

WHEREFORE, premises considered, judgment is hereby rendered acquitting accused Nenita Capor
of the crime charged against her in this case on the ground of reasonable doubt, with costs de oficio.

SO ORDERED.17

In Nicolas v. National Labor Relations Commission,18 we held that a criminal conviction is not
necessary to find just cause for employment termination. Otherwise stated, an employee’s acquittal
in a criminal case, especially one that is grounded on the existence of reasonable doubt, will not
preclude a determination in a labor case that he is guilty of acts inimical to the employer’s interests.19

Criminal cases require proof beyond reasonable doubt while labor disputes require only substantial
evidence, which means such relevant evidence as a

reasonable mind might accept as adequate to justify a conclusion.20 The evidence in this case was
reviewed by the appellate court and two labor tribunals endowed with expertise on the matter – the
Labor Arbiter and the NLRC. They all found substantial evidence to conclude that Capor had been
validly dismissed for dishonesty or serious misconduct. It is settled that factual findings of quasi-
judicial agencies are generally accorded respect and finality so long as these are supported by
substantial evidence. In the instant case, we find no compelling reason to doubt the common
findings of the three reviewing bodies.

The award of separation pay is not warranted under the law and jurisprudence.

We find no justification for the award of separation pay to Capor. This award is a deviation from
established law and jurisprudence. 21

The law is clear. Separation pay is only warranted when the cause for termination is not attributable
to the employee’s fault, such as those provided in Articles 283 and 284 of the Labor Code, as well as
in cases of illegal dismissal in which reinstatement is no longer feasible.22 It is not allowed when an
employee is dismissed for just cause,23 such as serious misconduct.

Jurisprudence has classified theft of company property as a serious misconduct and denied the
award of separation pay to the erring employee.24 We see no reason why the same should not be
similarly applied in the case of Capor. She attempted to steal the property of her long-time employer.
For committing such misconduct, she is definitely not entitled to an award of separation pay.

It is true that there have been instances when the Court awarded financial assistance to employees
who were terminated for just causes, on grounds of equity and social justice. The same, however,
has been curbed and rationalized in Philippine Long Distance Telephone Company v. National Labor
Relations Commission.25 In that case, we recognized the harsh realities faced by employees that
forced them, despite their good intentions, to violate company policies, for which the employer can
rightfully terminate their employment. For these instances, the award of financial assistance was
allowed. But, in clear and unmistakable language, we also held that the award of financial assistance
shall not be given to validly terminated employees, whose offenses are iniquitous or reflective of
some depravity in their moral character. When the employee commits an act of dishonesty,
depravity, or iniquity, the grant of financial assistance is misplaced compassion. It is tantamount not
only to condoning a patently illegal or dishonest act, but an endorsement thereof. It will be an insult
to all the laborers who, despite their economic difficulties, strive to maintain good values and moral
conduct.

In fact, in the recent case of Toyota Motors Philippines, Corp. Workers Association (TMPCWA) v.
National Labor Relations Commission,26 we ruled that separation pay shall not be granted to all
employees who are dismissed on any of the four grounds provided in Article 282 of the Labor Code.
Such ruling was reiterated and further explained in Central Philippines Bandag Retreaders, Inc. v.
Diasnes:27

To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the award of
separation pay based on social justice when an employee’s dismissal is based on serious
misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust;
or commission of a crime against the person of the employer or his immediate family – grounds
under Art. 282 of the Labor Code that sanction dismissals of employees. They must be most
judicious and circumspect in awarding separation pay or financial assistance as the constitutional
policy to provide full protection to labor is not meant to be an instrument to oppress the employers.
The commitment of the Court to the cause of labor should not embarrass us from sustaining the
employers when they are right, as here. In fine, we should be more cautious in awarding financial
assistance to the undeserving and those who are unworthy of the liberality of the law. 1avv phi 1

We are not persuaded by Capor’s argument that despite the finding of theft, she should still be
granted separation pay in light of her long years of service with petitioners. We held in Central
Pangasinan Electric Cooperative, Inc. v. National Labor Relations Commission28 that:

Although long years of service might generally be considered for the award of separation benefits or
some form of financial assistance to mitigate the effects of termination, this case is not the
appropriate instance for generosity x x x. The fact that private respondent served petitioner for more
than twenty years with no negative record prior to his dismissal, in our view of this case, does not
call for such award of benefits, since his violation reflects a regrettable lack of loyalty and worse,
betrayal of the company. If an employee’s length of service is to be regarded as justification for
moderating the penalty of dismissal, such gesture will actually become a prize for disloyalty,
distorting the meaning of social justice and undermining the efforts of labor to clean its ranks of
undesirables.

Indeed, length of service and a previously clean employment record cannot simply erase the gravity
of the betrayal exhibited by a malfeasant employee.29 Length of service is not a bargaining chip that
can simply be stacked against the employer. After all, an employer-employee relationship is
symbiotic where both parties benefit from mutual loyalty and dedicated service. If an employer had
treated his employee well, has accorded him fairness and adequate compensation as determined by
law, it is only fair to expect a long-time employee to return such fairness with at least some respect
and honesty. Thus, it may be said that betrayal by a long-time employee is more insulting and
odious for a fair employer. As stated in another case:

x x x The fact that [the employer] did not suffer pecuniary damage will not obliterate respondent’s
betrayal of trust and confidence reposed by petitioner. Neither would his length of service justify his
dishonesty or mitigate his liability. His length of service even aggravates his offense. He should have
been more loyal to petitioner company from which he derived his family bread and butter for
seventeen years.30

While we sympathize with Capor’s plight, being of retirement age and having served petitioners for
39 years, we cannot award any financial assistance in her favor because it is not only against the
law but also a retrogressive public policy. We have already explained the folly of granting financial
assistance in the guise of compassion in the following pronouncements:

x x x Certainly, a dishonest employee cannot be rewarded with separation pay or any financial
benefit after his culpability is established in two decisions by competent labor tribunals, which
decisions appear to be well-supported by evidence. To hold otherwise, even in the name of
compassion, would be to send a wrong signal not only that "crime pays" but also that one can enrich
himself at the expense of another in the name of social justice. And courts as well as quasi-judicial
entities will be overrun by petitioners mouthing dubious pleas for misplaced social justice. Indeed,
before there can be an occasion for compassion and mercy, there must first be justice for all.
Otherwise, employees will be encouraged to steal and misappropriate in the expectation that
eventually, in the name of social justice and compassion, they will not be penalized but instead
financially rewarded. Verily, a contrary holding will merely encourage lawlessness, dishonesty, and
duplicity. These are not the values that society cherishes; these are the habits that it abhors.31

WHEREFORE, the petition is GRANTED. The assailed June 3, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 76789 affirming the September 20, 2002 Decision of the National Labor
Relations Commission is ANNULLED and SET ASIDE. The November 16, 1999 Decision of the
Labor Arbiter is REINSTATED and AFFIRMED.

SO ORDERED.

G.R. No. 165199 November 27, 2009

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner,

vs.
INOCENCIO B. BERBANO, JR., Respondent.

DECISION

CARPIO, J.:
 The Case

This is a petition for review1 of the Court of Appeals’ Decision2 dated 21 January 2004 and
Resolution dated 9 September 2004 in CA-G.R. SP No. 75125. The Court of Appeals reversed the
Decision3 dated 29 May 2002 and Resolution dated 29 October 2002 of the National Labor Relations
Commission (NLRC).

The Antecedent Facts

The facts, as summarized by the Labor Arbiter and adopted by the NLRC and the Court of Appeals,
are as follows:

In his position paper, complainant [Inocencio B. Berbano, Jr.] alleged that he was hired by the
respondent Philippine Long Distance [Telephone] Company (PLDT, for brevity) on June 1, 1988 as
Engineering Assistant. After his probationary period of three months, he was issued an appointment
letter with a status of a regular employee of respondent. After several promotions, complainant
finally held the position of Computer Assistant M-2 on June 16, 1993 in the Sampaloc Exchange
Department/Operation and Maintenance Center of the respondent. Although his function is
"Computer Assistant M-2," complainant further alleges that he performed the functions of a
Specialist for EWSD who was responsible for handling, operations and maintenance of the whole
EWSD Network handling network database, fault clearance, database modification alarm monitoring,
traffic routing, trunk administration, password and tariff administration and others.

Being trained as EW[S]D OMC Specialist, complainant claims that respondent expected him to have
"depth of understanding" in continuous painstaking research and study. Thus, he initiated a study of
"hi-tech EWSD Switching Equipment," a part of which is the software installation of various
subscriber service features and control operation. It is at this time that complainant tapped his
brother-in-law’s number (911-8234) without the latter’s knowledge and installed service features in it
for study. Such service features included:

1. Security Code

2. Conference Call Three (Three-way calling)

3. Abbreviated Dialing

4. Hot Line Delayed

5. Call Diversion Immediate

6. Call Diversion Don’t Answer

7. Call Hold

8. Non-Changeable

Later, on April 21, 1994, complainant learned that the phone number 911-8234 is under investigation
by the Quality Control Inspection Office due to the unauthorized installation of service features
thereto. Complainant admitted that he was responsible for such installation for purposes of study
and testing.
Formal investigation ensued on April 22, 1994 and subsequently, on July 6, 1994, complainant
received a Memorandum from the Department Head of the Sampaloc Exchange asking him to
explain within 72 hours upon receipt why an [a]dministrative [a]ction should not be taken against
complainant regarding the matter of the unauthorized installations mentioned at the phone number
911-8234.

On July 11, 1994, complainant submitted a written explanation claiming that the aforementioned
installation of service features was for purposes of study and research.

Finding unacceptable the complainant’s explanation, respondent PLDT dismissed complainant from
the service effective August 16, 1994.

On the other hand, respondent submits that upon discovery of the installation of service features to
the phone number 911-8234 without the authorization and approval of the respondent, and after
investigation, complainant readily admitted having programmed the said features and that this
installation was without prior authorization. Respondent’s position paper further avers that having
worked as [a] Computer Assistant, complainant took advantage of his position and his access to
respondent company’s computer to favor his brother-in-law’s telephone by irregularly providing it
with special features. Such special features included the following:

1. Push Button

2. Test Call Only

3. Malicious Call Identification

4. Non-chargeable (Calls to subscriber with this class of service are free of charge for the
caller)

5. Three-way Calling (Allows a third party to be linked to an existing call)

6. Call Hold

7. Abbreviated dialing 90 numbers

8. Hotline delay

9. Pin Code

10. Call Diversion Immediate

11. Call Diversion to Fixed Announcement

12. Traffic Restr. Class Act Auth. (Authorization to activate traffic restriction classes)

13. Call Diversion Don’t Answer (Authorization to enter a destination no. for call diversion on
no answer)

14. Traffic Restriction Class 1

 15. Abbreviated Dial Number Mod. Auth. (Authorization for subs controlled entry and and
modification of abbreviated nos.)

16. Call Diversion Immediate (Modification Authorization)

17. Hotline Delay Mod. Auth.(Modification Authorization)

Respondent also found complainant’s explanation that the installment was for testing purposes,
unmeritorious and unjustified considering that said special features were only deleted upon
discovery, two months after their installations. Further, testings, according to the respondent
company’s rules should only last for one day.4

On 28 September 1998, the Labor Arbiter5 rendered a Decision, the dispositive portion of which
reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering the reinstatement of the
complainant to his previous position of Computer Assistant M-2 without loss of seniority rights.
Furthermore, respondent is hereby ordered to pay to the complainant the amount of FIVE
HUNDRED THIRTY SEVEN THOUSAND FOUR HUNDRED TWENTY PESOS (₱537,420.00)
representing the backwages of the complainant from the time that he was terminated in August 1994
up to the present, minus any possible income earned elsewhere since complainant’s dismissal. The
equivalent ten (10%) percent attorney’s fees of the total award in the amount of ₱53,742.00 is also
granted.

SO ORDERED.6

On 29 May 2002, the NLRC rendered a Decision reversing that of the Labor Arbiter, with the
following dispositive portion:

WHEREFORE, premises considered, the assailed decision is hereby reversed and set aside.
Respondents are adjudged not guilty of illegal dismissal. Accordingly, the award of backwages and
attorney’s fees is hereby deleted from the decision.

SO ORDERED.7

On 15 August 2002, Berbano filed a Motion for Reconsideration, but this was denied by the NLRC in
its Resolution dated 29 October 2002.8

The Court of Appeals’ Ruling

Berbano filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Revised
Rules of Civil Procedure. On 21 January 2004, the Court of Appeals rendered judgment granting the
petition and reversing the NLRC decision. We quote the dispositive portion of the Court of Appeals’
decision below.

WHEREFORE, premises considered, the petition is GRANTED. The decision of the public
respondent NLRC promulgated on May 29, 2002 is REVERSED and SET ASIDE and the decision
dated September 28, 1998 of the Honorable Labor Arbiter Romulus S. Prota[s]io is hereby
REINSTATED in all respect. Private respondent PLDT is ordered to pay the backwages to which the
petitioner is entitled from January 15, 2003, the date of his dismissal, until his actual reinstatement.
SO ORDERED.9

PLDT filed a Motion for Reconsideration, but this was denied by the Court of Appeals in its
Resolution of 9 September 2004.10

Hence, this appeal.

The Issues

Petitioner PLDT raises the following issues for our consideration:

1. Whether the Court of Appeals erred in reversing the NLRC decision despite its finding that
respondent committed the infraction that caused his dismissal;

2. Whether the Court of Appeals erred in ordering petitioner to pay respondent backwages
and attorney’s fees;

3. Whether respondent Inocencio Berbano, Jr. was denied due process of law; and

4. Whether the Court of Appeals had jurisdiction over the Petition for Certiorari filed by
respondent.

The Court’s Ruling

We find the appeal without merit.

On whether the Court of Appeals had jurisdiction

over the Petition for Certiorari filed by respondent

We first consider the issue on jurisdiction raised by petitioner. Petitioner contends that the NLRC
Decision dated 29 May 2002 was received by respondent on 29 June 2002; hence, respondent had
only ten (10) days, or up to 09 July 2002, to file a motion for reconsideration of the NLRC decision.
Without a motion for reconsideration timely filed, the NLRC decision would become final and
executory, pursuant to Section 2, paragraphs (a), (b) and (c) of Rule VIII [now Section 14 of Rule VII]
of the New Rules of Procedure of the NLRC. Petitioner claims that when respondent filed a motion
for reconsideration of the NLRC decision on 15 August 2002, which was beyond the 10-day
reglementary period imposed by law, the decision was already final and executory. Consequently,
the Court of Appeals had no jurisdiction over the petition for certiorari (assailing the NLRC decision)
filed by respondent on 10 February 2003.

The New Rules of Procedure of the NLRC mandate that a motion for reconsideration of the NLRC
decision must be filed within 10 calendar days from receipt of said decision, otherwise, the decision
shall become final and executory.11 A motion for reconsideration of the NLRC decision must be filed
before the remedy of a petition for certiorari may be availed of, to enable the commission to pass
upon and correct its mistakes without the intervention of the courts.12 Failure to file a motion for
reconsideration of the decision is a procedural defect that generally warrants a dismissal of the
petition for certiorari.13 However, in Surima v. NLRC,14 we held that despite procedural lapses,
fundamental consideration of substantial justice may warrant this Court to decide a case on the
merits rather than dismiss it on a technicality. In so doing, we exercise our prerogative in labor cases
that no undue sympathy is to be accorded to any claim of procedural misstep, the idea being that our
power must be exercised according to justice and equity and substantial merits of the
controversy.15 In the instant case, we are persuaded that the rigid rules of procedure must give way
to the demands of substantial justice, and that the case must be decided on the merits. Moreover,
the petition filed with the Court of Appeals sought the issuance of a writ of certiorari which is a
prerogative writ, not demandable as a matter of right, but issued in the exercise of judicial
discretion.16 Thus, the Court of Appeals committed no error when it admitted the petition for certiorari
filed by respondent, and had jurisdiction over said petition.

On whether the Court of Appeals erred in reversing

the NLRC decision despite its finding that respondent
committed the infraction that caused his dismissal

Petitioner contends that the Court of Appeals erred when it found respondent to have committed an
infraction, i.e., programming and installing special features in his (respondent’s) brother-in-law’s
telephone line without prior authorization from petitioner, but nonetheless ruled that the infraction
was not serious enough to warrant respondent’s dismissal from service. Petitioner also asserts that,
contrary to respondent’s claim, due process was observed in the dismissal of respondent.

Well-settled is the rule that no employee shall be validly dismissed from employment without the
observance of substantive and procedural due process. The minimum standards of due process are
prescribed under Article 277(b) of the Labor Code of the Philippines (Labor Code) to wit:

Art. 277. Miscellaneous Provisions.—

xxx

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just and authorized cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the cause for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires, in accordance with company rules and regulations promulgated
pursuant to guidelines set by the Department of Labor and Employment. x x x

The above provision is implemented by Section 2, Rule XXIII of Book V of the Omnibus Rules
Implementing the Labor Code, which states:

Section 2. Standards of due process: requirements of notice.— In all cases of termination of

employment, the following standards of due process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the Code:

(a) A written notice served on the employee specifying the ground or grounds for termination,
and giving to said employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination. x x x.
Thus, dismissal from service of an employee is valid if the following requirements are complied with:
(a) substantive due process which requires that the ground for dismissal is one of the just or
authorized causes enumerated in the Labor Code, and (b) procedural due process which requires
that the employee be given an opportunity to be heard and defend himself.17 The employee must be
furnished two written notices — the first notice apprises the employee of the particular act or
omission for which his dismissal is sought, and the second notice informs the employee of the
employer’s decision to dismiss him.18

In this case, petitioner formally notified respondent of the complaint against him through an inter-
office memorandum dated 6 July 1994. The memorandum enumerated the service features
allegedly installed by respondent in his brother-in-law’s telephone line (911-8234), and stated the
acts of the respondent complained of, viz:

You readily admitted to QCI that subscriber of subject telephone is your brother-in-law and that you
installed the features claiming it was for testing purposes.

Records show that subject telephone was temporarily disconnected last March 24, 1994 for non-
payment, reconnect order was faxed to Data Control Unit of OMCC at 1:30PM. In the process of
reconnection at OMCC, subject telephone was found already working.19 1avvphi1

In the same memorandum, petitioner asked respondent to explain within 72 hours upon receipt
thereof why an administrative action should not be imposed against him.20 On 11 July 1994,
respondent submitted his "written explanation" or reply to the complaint against him.21 More than a
month thereafter, or on 9 August 1994, petitioner issued another inter-office memorandum informing
respondent that his act of installing special features in his brother-in-law’s telephone line without
authorization from petitioner constituted "gross misconduct" and was "grossly violative of existing
company rules and regulations," hence, warranting his termination from service.22 Clearly, petitioner
complied with the requirement of procedural due process.

As regards substantial due process, the grounds for termination of employment must be based on
just or authorized causes. Article 282 of the Labor Code enumerates the just causes for termination
of employment by the employer, to wit:

Art. 282. Termination by employer. —An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and

(e) Other causes analogous to the foregoing. (Emphasis supplied)

The notice of termination sent by petitioner to respondent indicated that the latter was dismissed
from service due to unauthorized installation of service features in his brother-in-law’s telephone line,
which allegedly constituted gross misconduct. Thus, we are left with the issue on whether the said
unauthorized act of the respondent constitutes a serious misconduct which warrants dismissal from
service under Article 282(a) of the Labor Code.

Misconduct has been defined as improper or wrong conduct. It is the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error of judgment.23 Ordinary misconduct would not justify the
termination of services of the employee as the Labor Code is explicit that the misconduct must be
serious.24 To be serious, the misconduct must be of such grave and aggravated character and not
merely trivial and unimportant.25 Such misconduct, however serious, must nevertheless be in
connection with the employee’s work to constitute just cause for his separation.26 As amplified by
jurisprudence, misconduct, to be a just cause for dismissal, must (a) be serious; (b) relate to the
performance of the employee’s duties; and (c) show that the employee has become unfit to continue
working for the employer.27Moreover, in National Labor Relations Commission v. Salgarino,28 this
Court stressed that "[i]n order to constitute serious misconduct which will warrant the dismissal of an
employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or
conduct complained of has violated some established rules or policies. It is equally important and
required that the act or conduct must have been performed with wrongful intent."

We believe that the misconduct of respondent is not of serious nature as to warrant respondent’s
dismissal from service. The records of this case are bereft of any showing that the alleged
misconduct was performed by respondent with wrongful intent. On the contrary, respondent readily
admitted having installed the service features in his brother-in-law’s telephone line for purposes of
study and research which could have benefitted petitioner. Respondent explained the installation of
the service features in the "written explanation" he sent to petitioner as follows:

xxx

There had been a time on that period where I conducted special study on service features of EWSD.
It includes testing the integrity of its actual operation in all digital exchanges connected to our OMC.

During which [sic] I conducted my study of these features for Cubao there was no available test
number at OMC for code "911" and "912". So to complete my study I decided to use the number
9118234 at home temporarily and remove those features after the test.29

Moreover, as pointed out by the appellate court, respondent’s misconduct did not result in any
economic loss on the part of petitioner since the service features were not yet available in the market
at the time respondent caused its unauthorized installation.

We also note that respondent’s dedicated service to petitioner for almost six (6) years, prior to his
commission of the misconduct, is apparent from the records. His employment was untainted with
any irregularity. He had been promoted several times, and had been chosen by petitioner on several
occasions to attend various trainings to improve his craft. He conducted advance research based on
his training background and technical expertise, and had even compiled a service feature manual
which served as quick reference guide of his colleagues for inquiries regarding "subscriber operation
of special (or service) features."30

Based on the foregoing, we consider respondent’s offense to be a simple misconduct which does
not merit termination of his employment. The penalty of dismissal from service is not commensurate
to respondent’s offense. Although petitioner, as an employer, has the right to discipline its erring
employees, exercise of such right should be tempered with compassion and understanding. The
magnitude of the infraction committed by an employee must be weighed and equated with the
penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of
dismissal or termination from the service.31 The employer should bear in mind that in termination
cases, what is at stake is not simply the employee’s job or position but his very livelihood.

On whether the Court of Appeals erred in ordering

petitioner to pay respondent backwages and attorney’s fees

Since respondent was illegally dismissed, he is entitled to reinstatement without loss of seniority
rights, and to payment of backwages. Article 279 of the Labor Code, as amended by Section 34 of
Rep. Act No. 6715, provides as follows:

Art. 279. Security of Tenure. — In cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by this Title. An employee who
is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from him up to the time
of his actual reinstatement.

Thus, an illegally dismissed employee is entitled to the twin reliefs of (a) either reinstatement or
separation pay, if reinstatement is no longer viable, and (b) backwages.32 These reliefs are given to
alleviate the economic damage suffered by the illegally dismissed employee.33

Finally, we find no error in the award of attorney’s fees. In San Miguel Corporation v. Aballa,34 we
held that in actions for recovery of wages or where an employee was forced to litigate and thus incur
expenses to protect his rights and interests, a maximum of 10% of the total monetary award by way
of attorney’s fees is justifiable under Article 111 of the Labor Code;35 Section 8, Rule VIII of Book III
of the Omnibus Rules Implementing the Labor Code;36 and paragraph 7, Article 2208 of the Civil
Code.37 The award of attorney’s fees is proper and there need not be any showing that the employer
acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the
lawful wages were not paid accordingly.38

WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals’ Decision dated 21 January
2004 in CA-G.R. SP No. 75125.

SO ORDERED.

G.R. No. 182216 December 4, 2009

PLANTATION BAY RESORT and SPA and EFREN BELARMINO, Petitioners,

vs.
ROMEL S. DUBRICO, GODFREY D. NGUJO and JULIUS D. VILLAFLOR, Respondents.

DECISION

CARPIO MORALES, J.:

Via petition for review on certiorari, petitioners Plantation Bay Resort and Spa (Plantation Bay) and
Efren Belarmino (Belarmino) challenge the Court of Appeals August 30, 2007 Decision1 and March
3, 2008 Resolution2 dismissing their petition and affirming the March 24, 20063 and June 23,
20064 Resolutions of the National Labor Relations Commission (NLRC) in Case No. V-000366-2005
in favor of herein respondents.

Respondents are former employees of Plantation Bay located in Cebu, of which Belarmino is the
Manager. On several dates in September 2004, after Plantation Bay issued a series of memoranda
and conducted seminars5relative to its drug-free workplace policy,6 Plantation Bay, in compliance
with Republic Act No. 9165 (Comprehensive Dangerous Drugs Act of 2002), conducted surprise
random drug tests on its employees. The drug tests, said to have been carried out with the
assistance of the Philippine National Police-Scene of Crime Operations (SOCO), were administered
on about 122 employees by the Martell Medical Trade and Lab Services (Martell), a drug testing
laboratory. And confirmatory tests were conducted by the Philippine Drug Screening Laboratory, Inc.
(Phil. Drug), a Department of Health-accredited laboratory.

Respondent Romel Dubrico (Dubrico) failed to take the drug test conducted on September 14, 2004,
hence, he was issued a memorandum7 requiring him to appear in a mandatory conference on
September 20, 2004. Before the scheduled conference or on September 19, 2004, Dubrico
explained in writing8 his failure to undergo the drug test, he averring that, inter alia, the procedure for
the random drug testing was not followed such that he was not informed about his selection; and
that he was at the appointed time and place for the pre-test meeting but that the duty manager was
not around, hence, he left and failed to be tested.

Dubrico was later tested and found positive for use of methamphetamine hydrochloride (shabu).

Twenty other employees were found positive for use of shabu including herein respondents Godfrey
Ngujo (Ngujo) and Julius Villaflor (Villaflor).

In compliance with separate memoranda9 issued by the management of Plantation Bay, the
employees submitted their explanations on the result of the tests, which explanations were found
unsatisfactory, hence, Plantation Bay dismissed them including herein respondents.

Respondents Dubrico, Ngujo and Villaflor and three others thereupon filed on November 18, 2004
their respective complaints10 for illegal dismissal, questioning the conduct of the drug tests without
the presence of the DOLE Regional Director or his representative.

By Decision11 of April 18, 2005, Labor Arbiter Jose G. Gutierrez dismissed the employees’
complaints, holding that in testing positive for the use of shabu, they were guilty of serious
misconduct, hence, Plantation Bay validly terminated their employment; and that they were afforded
due process, they having been issued memoranda as to the mandatory investigation and given the
chance to, as they did refute the results of the drug tests by submitting results of recent drug tests.12

The Labor Arbiter discredited the drug test results presented by the employees as the tests were
taken more than 72 hours after the conduct of the random drug tests.

On appeal, the NLRC, by Decision of October 26, 2005, affirmed the Decision of the Labor Arbiter.
On respondents’ motion for reconsideration, it, however, by Resolution of March 24,
2006, reversed its October 26, 2005 Decision and declared that respondents were illegally
dismissed.
In finding for respondents, the NLRC held that the results of the confirmatory drug tests cannot be
given credence since they were conducted prior to the conduct by the employer of the drug tests. It
ratiocinated:

Considering the indubitable documentary evidence on record notably submitted by respondents

[petitioners herein] themselves, we agree with complainants that either or both drug tests and
confirmatory tests conducted on them were fabricated, farce or sham. For how could one
"confirm" some thing which was yet to be established or discovered? Needless to say, the
drug testing should always come ahead of the confirmatory testing, not the other way
around. We thus agree with complainants that if the drug tests against them were true, the
supposed confirmatory tests conducted on them were not based on their urine samples that were
the subject of the drug tests. Or that is the confirmatory tests were correct, these could not have
been gotten from their urine samples which were yet to undergo drug testing. At any rate, there is
not only doubt that on the version of respondents but also their conduct is highly suspicious based
on their own evidence. Thus, we now rule that respondents were not really into
drugs. (Emphasis and underscoring supplied) 1avvphi1

On the issue of due process, the NLRC abandoned its earlier statement that it was the SOCO which
conducted the drug tests, this time declaring that it was Martell which actually administered them. It
added that respondents were not given the opportunity to examine the evidence and confront the
witnesses against them through their counsel.

The NLRC accordingly reversed the Decision of the Labor Arbiter, disposing as follows:

WHEREFORE, the Appeal is DISMISSED, and the assailed Decision is AFFIRMED in toto.

SO ORDERED.13

Its motion for reconsideration having been denied by Resolution of June 23, 2006, Plantation Bay
appealed to the Court of Appeals, arguing that, inter alia, the veracity of the confirmatory tests was
raised by respondents only when they filed a belated Motion for Reconsideration of the NLRC
Decision, hence, the NLRC gravely abused its discretion when it reversed its findings based on such
new issue.

The appellate court affirmed the NLRC March 24, 2006 Resolution with modification by deleting the
award of damages. Hence, the present petition, petitioners reiterating the same issues raised in the
appellate court. Additionally, they maintain that in terminating the services of respondents, they
relied on the results of the random drug tests undertaken by an accredited and licensed drug testing
facility, and if the results turned out to be questionable or erroneous, they should not be made liable
therefor.

The petition is bereft of merit.

While it is a well-settled rule, also applicable in labor cases, that issues not raised below cannot be
raised for the first time on appeal,14 there are exceptions thereto among which are for reasons of
public policy or interest.

The NLRC did not err in considering the issue of the veracity of the confirmatory tests even if the
same was raised only in respondents’ Motion for Reconsideration of its Decision, it being crucial in
determining the validity of respondents’ dismissal from their employment.
Technical rules of procedure are not strictly adhered to in labor cases. In the interest of substantial
justice, new or additional evidence may be introduced on appeal before the NLRC. Such move is
proper, provided due process is observed, as was the case here, by giving the opposing party
sufficient opportunity to meet and rebut the new or additional evidence15 introduced.

The Constitution no less directs the State to afford full protection to labor. To achieve this goal,
technical rules of procedure shall be liberally construed in favor of the working class in accordance
with the demands of substantial justice.16

On the merits, the petition just the same fails. The importance of the confirmatory test is underscored
in Plantation Bay’s own "Policy and Procedures," in compliance with Republic Act No. 9165,
requiring that a confirmatory test must be conducted if an employee is found positive for drugs in the
Employee’s Prior Screening Test, and that both tests must arrive at the same positive result.17 1avvphil1

Records show the following timeline, based on the reports on respondents’ respective drug
tests18 administered by Martell and confirmatory tests19 undertaken by the Phil. Drug:

Name Drug Test Confirmatory Test

Romel Urine sample received on Issued on 09/29/04

Dubrico 09/29/04 at 5:14 p.m. at 3:57 p.m.
Godfrey Urine sample received on Issued on 09/29/04
Ngujo 09/29/04 at 5:24 p.m. at 3:57 p.m.

Julius Urine sample received on Issued on 09/29/04

Villaflor 09/29/04 at 5:32 p.m. at 4:15 p.m.

(Underscoring supplied)

As reflected in the above matrix, the confirmatory test results were released earlier than those of the
drug test, thereby casting doubts on the veracity of the confirmatory results.

Indeed, how can the presence of shabu be confirmed when the results of the initial screening were
not yet out? Plantation Bay’s arguments that it should not be made liable thereof and that the doubt
arising from the time of the conduct of the drug and confirmatory tests was the result of the big
volume of printouts being handled by Martell do not thus lie. It was Plantation Bay’s responsibility to
ensure that the tests would be properly administered, the results thereof being the bases in
terminating the employees’ services.

Time and again, we have ruled that where there is no showing of a clear, valid and legal cause
for termination of employment, the law considers the case a matter of illegal dismissal. The
burden is on the employer to prove that the termination of employment was for a valid and
legal cause. For an employee's dismissal to be valid, (a) the dismissal must be for a valid cause and
(b) the employee must be afforded due process.20 (Emphasis supplied)

In fine, as petitioners failed to indubitably prove that respondents were guilty of drug use in
contravention of its drug-free workplace policy amounting to serious misconduct, respondents are
deemed to have been illegally dismissed.
As to the appellate court’s deletion of the award of damages, the same is in order, there being no
clear showing that the termination of respondents’ services was actuated by bad faith.

WHEREFORE, the petition is DENIED.

SO ORDERED.

G.R. No. 182299 February 22, 2010

WILFREDO M. BARON, BARRY ANTHONY BARON, RAMIL CAYAGO, DOMINADOR GEMINO,

ARISTEO PUZON, BERNARD MANGSAT, MARIFE BALLESCA, CYNTHIA JUNATAS,
LOURDES RABAGO, JEFFERSON DELA ROSA and JOMAR M. DELA ROSA, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MAGIC SALES, INC. represented by JOSE
Y. SY,Respondents.

DECISION

VILLARAMA, JR., J.:

The present petition for review on certiorari seeks to annul the Decision1 dated August 31, 2007, as
well as the Resolution2 dated March 6, 2008, of the Court of Appeals in CA-G.R. SP No. 78925,
which affirmed the Decision3 of the National Labor Relations Commission (NLRC) in NLRC-NCR CA
No. 028180-01.

Respondent Magic Sales, Inc. (MSI) is a domestic corporation engaged in the business of trading
consumer goods such as soap, biscuits, candy, coffee, and juice drinks, among other things,4 while
respondent Jose Y. Sy is the company’s President and General Manager.5 On the other hand,
petitioners claim to be employees of MSI.6

It appears that on January 18, 2000, Sy ordered an inventory of the company’s stock after noticing a
steady increase in the company’s payables and a decline in its investments. Mr. Jovencio A. Daroya,
a Certified Public Accountant and the Corporate Finance Manager of MSI, was tasked to conduct a
thorough audit of the company’s business. Sy then informed petitioner Wilfredo Baron that he had to
be temporarily relieved of some of his duties as Operations Manager to allow the audit process to
take its course for reconciliation of documents.

In a memorandum dated February 18, 2000, the employees were instructed (1) to give all the
support needed by the audit team; (2) to surrender all keys and documents; (3) not to bring out
anything belonging to management; and (4) to undergo a search before leaving the
office.7 Petitioners, however, refused to cooperate in the audit process, and thereafter, refrained from
reporting for work.8 Nonetheless, the audit was completed, and an Internal Audit Report9was
submitted on April 29, 2000.
According to the audit team, there were several irregularities in the operations of MSI. The
accounting system designed by Baron was generally weak and compliance to procedures was not
strictly implemented. The team was also convinced that Baron abused his authority and took
advantage of the laxity of the system he designed. It likewise believed that Baron’s subordinates
were not honest enough to report the anomalies to the management; otherwise, the irregularities
could have been limited. The audit team further concluded that there was collusion between Baron
and his subordinates and that they benefited from the irregularities.10

Consequently, management informed petitioners of the charges against them, to wit: (1) serious
misconduct and willful disobedience to the company’s lawful orders; (2) fraud or willful breach of
trust reposed by the employer; and (3) abandonment or absence without official leave. Although
petitioners were required to explain and refute the charges, they neither rebutted the same nor
attended the investigation. Hence, MSI decided to terminate their services.11

Petitioners forthwith filed complaints12 with the NLRC Arbitration Branch against MSI and Sy for
illegal dismissal, 13th month pay, service incentive leave pay, moral and exemplary damages and
attorney’s fees.13 In their Joint Position Paper,14 petitioners principally argued that they were
dismissed whimsically and capriciously in a very oppressive manner, without valid cause and without
due process of law. They prayed that respondents be declared guilty of illegal dismissal and that
they be reinstated to their respective former positions without loss of seniority rights, with full back
wages and payment of damages. They also prayed for payment of their monetary claims.

For its part, MSI countered in its Consolidated Position Paper15 that the petitioners are not entitled to
the reliefs prayed for because they were validly dismissed. MSI insisted that Baron orchestrated the
massive irregularities and grand scale fraud. With the help of the other petitioners, they were able to
misappropriate company funds and goods. When petitioners sensed that their offenses would be
discovered during the audit, they suddenly abandoned their work. Furthermore, MSI insisted that
petitioners are guilty of insubordination by refusing to cooperate with the company and subject
themselves to audit to clear themselves. Worse, petitioners attempted to sabotage the audit by
locking their drawers and refusing to surrender the keys, stealing files and destroying documents
and other papers.

On January 22, 2001, Labor Arbiter Jose G. De Vera rendered judgment16 ordering respondents to
reinstate petitioners Aristeo Puzon, Dominador Gemino, Bernard Mangsat, Ramil Cayago, Barry
Anthony Baron, Cynthia Junatas, Marife Ballesca and Lourdes Rabago to their former positions with
all the rights, privileges, and benefits appurtenant thereto, plus full back wages from the date of
dismissal until finally reinstated. Respondents were further ordered to pay money claims and
attorney’s fees to petitioners. However, the complaints of Wilfredo Baron, Jefferson dela Rosa and
Jomar dela Rosa were dismissed for lack of merit.

Separate appeals to the NLRC were filed by both parties.17 Petitioners argued that the decision is not
in accord with law and jurisprudence and that they are appealing partially for the denial of their claim
for damages. On the other hand, respondents claimed that the Labor Arbiter erred in holding that: (1)
petitioners Gemino, Puzon, Barry Baron and Cayago were employees of MSI and that they were
illegally dismissed; (2) petitioners Ballesca, Junatas and Rabago were dismissed without just and
valid cause; and (3) respondent Sy is solidarily liable with MSI. Respondents also argued that the
Labor Arbiter erred in granting petitioners’ money claims.

On December 27, 2002, the NLRC rendered a Decision18 as follows:

WHEREFORE, judgment is hereby rendered:

 1. Treating the appeal of complainants Jomar de la Rosa and Jefferson dela Rosa as
withdrawn;

2. Dismissing the appeal of Wilfredo Baron for being without merit; and

3. Dismissing the complaints of Aristeo Puzon, Dominador Gemino, Bernard [Mangsat],

Ramil Cayago, Barry Anthony [Baron], Cynthia Junatas, Marife Ballesca and Lourdes
Rabago for being also without merit.

SO ORDERED.

According to the NLRC, there was enough evidence to show that there was conspiracy among the
employees of MSI. It found that massive irregularities were committed in the company and one (1) of
those involved was the operations manager himself. The audit revealed that it was Wilfredo Baron
who orchestrated the massive irregularities and grand scale fraud which, however, could no longer
be documented because of the theft of company files and deletion of computer files which he and
the other petitioners had access to. The NLRC found that petitioners anticipated that the audit would
eventually lead to their dismissal and prosecution in court. Hence, they abandoned their work and
filed cases at the start of the audit.19 The NLRC held that the acts of abandoning their jobs without
prior leave and of not surrendering all the keys and documents in their possession so that
management could thoroughly conduct its audit are enough reasons to justify their termination
pursuant to Article 282 of the Labor Code, as amended.

Petitioners filed a Motion for Reconsideration.20 The NLRC, however, was not persuaded, and
resolved to deny the motion in its Order dated May 7, 2003.21

Contending that the NLRC acted with grave abuse of discretion amounting to lack or in excess of
jurisdiction in rendering its Decision and Order, petitioners filed a Petition for Certiorari22 with the
Court of Appeals.

On August 31, 2007, the appellate court rendered a Decision,23 the dispositive portion of which
reads:

WHEREFORE, for lack of merit, the petition is DENIED due course and, accordingly, DISMISSED.
Consequently, the assailed decision of the National Labor Relations Commission is AFFIRMED.

SO ORDERED.

Later, the Court of Appeals denied petitioners’ motion for reconsideration24 in its Resolution25 dated
March 6, 2008.

Hence, the present petition.

The core issues in this controversy are: (1) Were petitioners validly dismissed on the grounds of
grave misconduct and loss of confidence? and (2) Were petitioners denied of their right to due
process when they were terminated from their employment?

At the outset, it must be stressed that the issues raise questions of fact which are not proper
subjects of a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended. It is axiomatic that in an appeal by certiorari, only questions of law may be
reviewed.26 Furthermore, factual findings of administrative agencies, when affirmed by the Court of
Appeals, are conclusive on the parties and not reviewable by this Court. This is so because of the
special knowledge and expertise gained by these quasi-judicial agencies from presiding over
matters falling within their jurisdiction, which is confined to specific matters. So long as these factual
findings are supported by substantial evidence, this Court will not disturb the same.27

In this case, the Labor Arbiter found that petitioners Aristeo Puzon, Dominador Gemino, Bernard
Mangsat, Ramil Cayago, Barry Anthony Baron, Cynthia Junatas, Marife Ballesca and Lourdes
Rabago were illegally dismissed. The NLRC disagreed with the Labor Arbiter and reversed the
latter’s findings. On appeal, the appellate court concurred with the findings of the NLRC. In view of
the discordance between the findings of the Labor Arbiter, on one hand, and the NLRC and the
Court of Appeals, on the other, there is a need for the Court to review the factual findings and the
conclusions based on the said findings. As this Court held in Diamond Motors Corporation v. Court
of Appeals:28

A disharmony between the factual findings of the Labor Arbiter and the National Labor Relations
Commission opens the door to a review thereof by this Court. Factual findings of administrative
agencies are not infallible and will be set aside when they fail the test of arbitrariness. Moreover,
when the findings of the National Labor Relations Commission contradict those of the labor arbiter,
this Court, in the exercise of its equity jurisdiction, may look into the records of the case and
reexamine the questioned findings.

The Constitution, statutes and jurisprudence uniformly mandate that no worker shall be dismissed
except for a just or valid cause provided by law, and only after due process is properly observed. In
a recent decision,29 this Court said that dismissals have two facets: first, the legality of the act of
dismissal, which constitutes substantive due process; and, second, the legality of the manner of
dismissal, which constitutes procedural due process.

The just causes for termination of employment are enumerated in Article 282 of the Labor Code, as
amended, viz.:

ART. 282. Termination by employer. – An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and

(e) Other causes analogous to the foregoing.

In the present case, respondents terminated petitioners from their employment based on the
following grounds: (1) serious misconduct and willful disobedience to the company’s lawful orders;
(2) fraud or willful breach of trust reposed by the employer; and (3) abandonment or absence without
official leave.
Misconduct has been defined as improper or wrong conduct. It is the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of
such grave and aggravated character and not merely trivial and unimportant. Such misconduct,
however serious, must nevertheless be in connection with the employee’s work to constitute just
cause for his separation.30

To our mind, respondents were able to prove substantially the existence of serious misconduct
committed by petitioners to justify their termination from employment. Daroya submitted a
report31 dated February 19, 2000 stating that in spite of management’s memorandum, the keys to the
office and filing cabinets were not surrendered. It was likewise stated in the report that Wilfredo
Baron pulled out some records without allowing a representative from the audit team to inspect
them. He noticed Wilfredo Baron deleting some files from the computer which could no longer be
retrieved. Moreover, Armida Que, a member of the audit team, saw petitioner Cynthia Junatas
carrying some documents, including a Daily Collection Report. When asked to present the
documents for inspection, Junatas refused and tore the document.

In addition, the audit team discovered that MSI incurred an inventory shortage of One Million Thirty
Thousand Two Hundred Fifty-Eight Pesos and Twenty-One Centavos (₱1,030,258.21). It found that
Wilfredo Baron, the operations manager, in conspiracy with the other petitioners, orchestrated
massive irregularities and grand scale fraud, which could no longer be documented because of theft
of company documents and deletion of computer files. Unmistakably, the unauthorized taking of
company documents and files, failure to pay unremitted collections, failure to surrender keys to the
filing cabinets despite earlier instructions, concealment of shortages, and failure to record inventory
transactions pursuant to a fraudulent scheme are acts of grave misconduct, which are sufficient
causes for petitioners’ dismissal from employment.

They are also grounds for loss of trust and confidence under Article 282 of the Labor Code, as
amended. For there to be a valid dismissal based on loss of trust and confidence, the breach of trust
must be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable
excuse.32 The basic premise for dismissal on the ground of loss of confidence is that the employees
concerned hold a position of trust and confidence. It is the breach of this trust that results in the
employer’s loss of confidence in the employee. In the instant case, we note that petitioners were
holding the following positions: Wilfredo Baron - operations manager, Jomar dela Rosa and
Jefferson dela Rosa - sales representatives, Cynthia Junatas and Marife Ballesca - accounting
clerks, and Lourdes Rabago - warehouse checker. Clearly, petitioners were holding positions
imbued with trust and confidence, which are deemed to have been reposed on them by virtue of the
nature of their work.

All given, we affirm the conclusion of the NLRC and appellate court that petitioners Wilfredo Baron,
Jomar dela Rosa, Jefferson dela Rosa, Cynthia Junatas, Marife Ballesca and Lourdes Rabago were
dismissed for just causes. Meanwhile, petitioners Aristeo Puzon, Dominador Gemino, Bernard
Mangsat, Barry Anthony Baron and Ramil Cayago failed to prove by substantial evidence the
existence of an employer-employee relationship between them and MSI. In fact, they admitted that
they were probationary employees of Superb Trading and Services, Inc. (STSI), and not of MSI. It
must also be stressed that the connection between MSI and STSI was not proven. Thus, having no
cause of action against MSI, the Court of Appeals correctly upheld the NLRC in dismissing their
complaints.

On the procedural aspect, petitioners claim that they were denied due process. We disagree.
In the dismissal of employees, it has been consistently held that the twin requirements of notice and
hearing are essential elements of due process. The employer must furnish the worker with two
written notices before termination of employment can be legally effected: (1) a notice apprising the
employee of the particular acts or omissions for which his dismissal is sought, and (2) a subsequent
notice informing the employee of the employer’s decision to dismiss him. With regard to the
requirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and
not that an actual hearing should always and indispensably be held.33

Likewise, there is no requirement that the notices of dismissal themselves be couched in the form
and language of judicial or quasi-judicial decisions. What is required is that the employer conduct a
formal investigation process, with notices duly served on the employees informing them of the fact of
investigation, and subsequently, if warranted, a separate notice of dismissal.34 Through the formal
investigatory process, the employee must be accorded the right to present his or her side, which
must be considered and weighed by the employer. The employee must be sufficiently apprised of
the nature of the charge, so as to be able to intelligently defend himself or herself against the
charges.1avv phi1

In this case, records show that respondents complied with the two-notice rule prescribed in Article
277(b) of the Labor Code, as amended. Petitioners were given all avenues to present their side and
disprove the allegations of respondents. Thus, we agree with the Court of Appeals when it held:

On various dates, two [2] separate notices were given the employees. In the first notice, the acts
imputed against them were enumerated with a call for an investigation, while the second notice
contained MSI’s decision terminating them after they failed to respond to the first notice. Thus, the
employees’ inaction is attributable to them. Due process is not violated where a person is given the
opportunity to be heard but chooses not to give his side of the case (Caurdanetaan Piece Workers
Union vs. Laguesma, 286 SCRA 401).35

Evidence shows that petitioners were properly notified of the charges against them. They received
letters36 signed by Jose Y. Sy instructing them to explain within seventy-two (72) hours from receipt
why they should not be dismissed for their offenses. They were likewise warned that failure to reply
would mean that they were waiving their right to present evidence in their favor. Furthermore,
petitioners were afforded the chance to defend themselves during the scheduled investigation on
April 12, 2000. Given the foregoing, it is clear that the required procedural due process for their
termination was strictly complied with. When parties have been given an opportunity to be heard and
to present their case, there is no denial of due process.37

WHEREFORE, the petition is DENIED. The Decision dated August 31, 2007 and the Resolution
dated March 6, 2008 of the Court of Appeals in CA-G.R. SP No. 78925
are AFFIRMED and UPHELD.

With costs against the petitioners.

SO ORDERED.
G.R. No. 172506 July 27, 2011

JERRY MAPILI, Petitioner,

vs.
PHILIPPINE RABBIT BUS LINES, INC./NATIVIDAD NISCE, Respondents.

DECISION

DEL CASTILLO, J.:

An employee’s propensity to commit repetitious infractions evinces wrongful intent, making him
undeserving of the compassion accorded by law to labor.

This Petition for Review on Certiorari1 assails the Decision2 dated January 16, 2006 and
Resolution3 dated April 6, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 89733, which
affirmed the Decision4 dated November 25, 2004 and Resolution5 dated February 28, 2005 of the
National Labor Relations Commission (NLRC) finding petitioner Jerry Mapili (petitioner) to have been
dismissed for cause.

Factual Antecedents

Respondent Natividad P. Nisce (Nisce) is the President of respondent Philippine Rabbit Bus Lines,
Inc. (PRBLI), an entity engaged in the transportation business. On April 7, 1993, PRBLI hired
petitioner as bus conductor with a salary of ₱510.00 per trip. On October 7, 2001, while on duty en
route from Manila to Alaminos, Pangasinan, petitioner was caught by PRBLI’s field inspector
extending a free ride to a lady passenger who boarded at Barangay Magtaking, Labrador,
Pangasinan. Upon order of the field inspector, the lady passenger, who happened to be the wife of
Julio Ricardo, petitioner’s co-employee and one of PRBLI’s drivers, was immediately issued a
passenger ticket for which she paid ₱50.00.6

On October 9, 2001, petitioner was preventively suspended and was directed to appear in an
administrative investigation.7 Thereafter, a formal hearing was conducted during which petitioner was
given an opportunity to present and explain his side. Consequently, through a memorandum8 dated
November 9, 2001, petitioner was terminated from employment for committing a serious irregularity
by extending a free ride to a passenger in violation of company rules. Notably, that was already the
third time that petitioner committed said violation.

On February 19, 2002, petitioner filed with the NLRC a Complaint9 for illegal dismissal against
PRBLI, Nisce, and Ricardo Paras (Paras), PRBLI’s General Manager.

Parties’ Respective Arguments

Petitioner alleged that his employment was terminated without cause and due process. He argued
that the infraction was only trivial. It was done without malice and resulted from his honest belief that
immediate family members of PRBLI’s employees are entitled to free ride. He argued that his two
previous violations of the same company regulation cannot be considered in the imposition of the
penalty of dismissal since those previous infractions were not too serious. The first involved a police
officer supposedly on official duty who refused to pay for a passenger ticket, while the second
involved a former employee of PRBLI who misrepresented himself to be a current employee by
virtue of a company ID duly presented. Moreover, he has already been penalized for these previous
violations and to consider them anew would be tantamount to penalizing him twice for the same
offense. Under these circumstances and considering further his length of service, petitioner
advanced that his violations are not sufficient to merit the penalty of dismissal. Petitioner thus prayed
that his dismissal be declared illegal and that he be awarded separation pay in lieu of reinstatement,
backwages, 13th month pay, damages, attorney’s fees and refund of cash bond in the amount of
₱5,000.00.

Respondents argued that petitioner’s admissions during the investigation that he indeed offered a
free ride out of gratitude to the wife of his co-employee and that it was his third offense, justified his
termination considering that his position is imbued with trust and confidence. They claimed that
petitioner’s failure to collect fares from the riding public, coupled with his past record of serious
offenses ranging from non-issuance, improper passenger tickets to collecting fares without issuing
tickets, and allowing passengers to board without fare coupons, for which different penalties have
been imposed against him, are grounds for valid dismissal. Respondents also argued that due
process was observed when petitioner was accorded a chance to defend himself in an investigation
conducted for that purpose. Respondents further disclaimed bad faith, malice, and liability to
petitioner’s money claims.

Ruling of the Labor Arbiter

In a Decision10 dated July 2, 2003, the Labor Arbiter held that petitioner had no intention to defraud
the company by his failure to issue a ticket to the wife of a co-employee as the same was done out
of gratitude and under the wrong impression that she is entitled to such privilege. Besides, the
amount of the fare was subsequently collected from and paid by the passenger. The Labor Arbiter
opined that petitioner’s actuations merited a less punitive penalty such as suspension of 30 days
which he already served during his preventive suspension. The Labor Arbiter also found that
petitioner was not denied due process since he was given the opportunity to present his side. As
regards Nisce and Paras, the Labor Arbiter held that they cannot be held personally liable for lack of
bad faith on their part. The dispositive portion of said Decision reads:

PREMISES CONSIDERED, judgment is hereby rendered declaring complainant Jerry B. Mapili to

have been illegally dismissed from employment. Respondent Philippine Rabbit Bus Lines, Inc. is
hereby ordered to reinstate complainant to his former position or to a similar one without loss of
seniority rights and pay him the following:

a.) Backwages amounting to Php271,320.00;

b.) 13th month pay of Php24,650.00;

c.) Php5,000.00 as refund of bond.

All in the total amount of Php300,970.00.

A detailed computation is attached as Annex ‘A’.

SO ORDERED.11

Ruling of the National Labor Relations Commission

The NLRC, in a Decision12 dated November 25, 2004 set aside the findings of the Labor Arbiter upon
appeal by respondents. It found that the non-issuance of a ticket to the lady passenger and failure to
collect money due to the company was a deliberate and intentional act of petitioner which prejudiced
the company’s interests. In ruling that petitioner’s dismissal was for just cause, the NLRC opined that
petitioner’s past record of committing several acts of misconduct and his propensity to commit
similar infractions do not merit the compassion of law. Thus, the NLRC disposed of the case as
follows:

WHEREFORE, premises considered, the decision under review is hereby, REVERSED and SET
ASIDE, and another entered in its stead, DISMISSING the complaint for lack of merit.

Respondents are, however, ordered to refund complainant’s cash bond in the amount of FIVE
THOUSAND PESOS (₱5,000.00), and his proportionate 13th month pay for the year 2001 in the
amount of ELEVEN THOUSAND THREE HUNDRED NINETY Pesos (₱11,390.00), or a total
amount of SIXTEEN THOUSAND THREE HUNDRED NINETY Pesos (₱16,390.00).

SO ORDERED.13

Petitioner filed his Motion for Reconsideration14 which was denied by the NLRC in a
Resolution15 dated February 28, 2005.

Ruling of the Court of Appeals

Petitioner filed with the CA a petition for certiorari.16 The CA, in its Decision17 dated January 16,
2006, however, found no grave abuse of discretion on the part of the NLRC in ruling that petitioner
was validly dismissed. The CA agreed that petitioner has a history of committing violations of
company rules, the last one being a repeat violation against extending free rides to passengers. This
infraction is considered as a grave offense and serious misconduct which merits the penalty of
dismissal. The CA also agreed that there was intent to cheat the company of its funds.

Petitioner’s Motion for Reconsideration18 was likewise denied in the CA Resolution19 dated April 6,
2006.

Hence, the instant petition.

Issues

Petitioner raised the following grounds:

I.

THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN NOT

HOLDING THAT DISMISSAL FROM EMPLOYMENT IS NOT [A COMMENSURATE]
PENALTY [FOR] THE INFRACTION COMMITTED AS A MERE ERROR IN JUDGMENT,
SUCH AS PETITIONER’S ACT OF EXTENDING A FREE BUS RIDE TO THE CO-
EMPLOYEE BUS DRIVER’S WIFE ON THE HONEST BELIEF THAT AN IMMEDIATE
FAMILY MEMBER OF AN EMPLOYEE IN THE COMPANY IS ENTITLED TO A FREE
RIDE;

II.

THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN EQUATING

AS PROOF RESPONDENTS’ MERE ALLEGATIONS OF VARIOUS PAST INFRACTIONS
AGAINST YOUR PETITIONER; and
 III.

THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN NOT

HOLDING THAT THE PAST TWO SIMILAR INFRACTIONS [FOR] WHICH AN
EMPLOYEE HAS ALREADY SUFFERED THE CORRESPONDING PENALTY OF
WARNING AND SUSPENSION, CANNOT BE USED AS X X X JUSTIFICATION[S] FOR
THE EMPLOYEE’S DISMISSAL FROM SERVICE.20

Petitioner asserts that the penalty of dismissal is grossly disproportionate to the infraction he
committed because his act of extending a free ride was not deliberate but was done on a wrong
assumption that immediate family members of company employees are entitled to free rides. He
insists that his past infractions, unsupported by proof, and his previous two offenses of not issuing
fare tickets to a police officer and former company employee cannot be used as bases for his
termination considering that his actuations for the latter offenses were justified under the
circumstances and that he was already penalized for all these past violations. It is petitioner’s view
that his infraction merits only a 30-day suspension, as imposed by the Labor Arbiter.

Our Ruling

We deny the petition.

Petitioner’s violation of company rules was intentional, willful, serious and a just cause for dismissal.

Petitioner assails the CA’s finding that petitioner’s non-issuance of a passenger ticket to the lady
passenger is a grave offense, that it was committed with deliberate intent and a repeat violation of a
company rule which merits dismissal. Petitioner insists that his infraction was merely trivial because
he was under the impression that immediate family members of employees are entitled to free ride.
Petitioner cites Section 13, Article VIII21 of the Collective Bargaining Agreement which provides:

Section 13. Free Ride and Passes - All employees covered by this Agreement shall be provided a
free ride in all units of Philippine Rabbit Bus Line, Inc. as presently practiced. However, members of
his/her immediate family shall be given passes upon request to the COMPANY.

Petitioner insists that his act of extending a free ride is in accordance with the aforequoted provision
and the fact that he may have overlooked the requirement of passes with respect to immediate
family members is not so serious as to characterize the offense he committed to have been
performed with malicious intent.

We are not persuaded.

The above provision is clear and unequivocal that free rides are available only to employees of
PRBLI. The benefit is not automatically extended to members of the employee’s immediate family as
passes must first be requested for them. Petitioner should be conversant of this provision
considering his previous infractions of this same provision for which he was duly penalized. Besides,
petitioner’s claim of good faith is belied by his testimony to the effect that he extended a free ride out
of gratitude to the wife of a co-employee who assisted him in his financial troubles. During the
administrative investigation conducted on October 15, 2001, petitioner narrated thus:

Q-9 Why on October 07 you [gave] a free ride to the wife of Driver Ricardo?

A-9 I did this because I want to pay my gratitude to her, sir.

 Q-10 What are your gratitude/s to the woman?

A-10 Many times she [helped] me in my problem especially in financial, sir.

Q-11 Why [do] you need to pay your gratitude [at] the expense of the company?

A-11 For what I have done compel [sic] myself to do. Napasubo lang po ako. I admit this is a
grave offense against the company. Whatever suspension that you may impose to [sic] me I
am ready to accept, sir.22

Based on this testimony, it is quite apparent that petitioner was aware that the infraction he
committed constituted a grave offense but he still persisted in committing the same out of gratitude
to the passenger. Hence, as correctly found by the CA, there was deliberate intent on the part of the
petitioner to commit the violation in order to repay a personal debt at the expense of the company.
Petitioner chose to violate company rules for his benefit without regard to his responsibilities to the
company. Also, if not for the inspector who discovered the incident, the company would have been
defrauded by the amount of fare.

It bears stressing that petitioner has been in the employ of PRBLI for more

than eight years already and is a member of the company’s labor union. As such, he ought to know
the specific company rules pertaining to his line of work as a bus conductor. For that matter, his
length of service has even aggravated the resulting consequences of his transgressions. In addition,
on April 8, 1994 and May 3, 1995, he committed similar infractions of extending free ride to a police
officer and a former employee, respectively. These had been brought to the attention of the
petitioner and for which the penalties of relief from duty and suspension were meted out upon
him.23 Hence, he ought to have known better than to repeat the same violation as he is presumed to
be thoroughly acquainted with the prohibitions and restrictions against extending free rides. We also
cannot agree with petitioner’s contention that his infraction was trivial. As a bus conductor whose
duties primarily include the collection of transportation fares, which is the lifeblood of the PRBLI,
petitioner should have exercised the required diligence in the performance thereof and his habitual
failure to exercise the same cannot be taken for granted. As correctly observed by the CA,
petitioner’s position is imbued with trust and confidence because it involves handling of money and
failure to collect the proper fare from the riding public constitutes a grave offense which justifies his
dismissal. Moreover, petitioner’s "series of irregularities when put together may constitute serious
misconduct."24

Petitioner’s record of offenses of the same nature as his present infraction justifies his dismissal.

Petitioner’s past infractions can be gleaned from his employment record of offenses which was
presented by the respondents. This piece of evidence was not disputed by petitioner. Hence,
petitioner cannot claim that the finding of his past company infractions was based merely on
allegations.

As petitioner’s employment record shows, this is not the first time that

petitioner refused to collect fares from passengers. In fact, this is already the third instance that he
failed to collect fares from the riding public. Although petitioner already suffered the corresponding
penalties for his past misconduct, those infractions are still relevant and may be considered in
assessing his liability for his present infraction.25 We thus held in Philippine Rabbit Bus Lines, Inc. v.
National Labor Relations Commission26that:
Nor can it be plausibly argued that because the offenses were already given the appropriate
sanctions, they cannot be taken against him. They are relevant in assessing private respondent’s
liability for the present violation for the purpose of determining the appropriate penalty. To sustain
private respondent’s argument that the past violation should not be considered is to disregard the
warnings previously issued to him. 1avv phi 1

As suspension may not anymore suffice as penalty for the violation done as shown by petitioner’s
disregard of previous warnings and propensity to commit the same infraction over the years of his
employment, and to deter other employees who may be wont to violate the same company policy,
petitioner’s termination from employment is only proper.

WHEREFORE, the petition is DENIED. The Decision dated January 16, 2006 and Resolution dated
April 6, 2006 of the Court of Appeals in CA-G.R. SP No. 89733 are AFFIRMED.

SO ORDERED.