G.R. No.
194884 October 22, 2014 immediately went back to the guard house and relayed what he saw to Danilo
IMASEN PHILIPPINE MANUFACTURING
CORPORATION, Petitioner,
vs.
RAMONCHITO T. ALCON and JOANN S. PAPA, Respondents.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari1 the challenge to the June
9, 2010 decision2 and the December 22, 2010 resolution3 of the Court of
Appeals (CA) in CA-G.R. SP No. 110327. This CA decision nullified the
December 24, 2008 decision4 of the National Labor Relations Commission
(NLRC) in NLRC CA No. 043915-05 (NLRC CASE No. RAB IV-12-1661-
02-L). The NLRC ruling, in turn, affirmed the December 10, 2004
decision5 of the Labor Arbiter (LA), dismissing the illegal dismissal complaint
filed by respondents Ramonchito T. Alcon and Joann S. Papa (collectively
referred to as respondents).
The Factual Antecedents
Petitioner Imasen Philippine Manufacturing Corporation is a domestic
corporation engaged in the manufacture of auto seat-recliners and slide-
adjusters. It hired the respondents as manual welders in 2001.
On October 5, 2002, the respondents reported for work on the second shift
from 8:00 pm to 5:00 am of the following day. At around 12:40 am, Cyrus A.
Altiche, Imasens security guard on duty, went to patrol and inspect the
production plants premises. When Altiche reached Imasens Press Area, he
heard the sound of a running industrial fan. Intending to turn the fan off, he
followed the sound that led him to the plants "Tool and Die" section.
At the "Tool and Die" section, Altiche saw the respondents having sexual
intercourse on the floor, using a piece of carton as mattress. Altiche
S. Ogana, another security guard on duty.
On Altiches request, Ogana madea follow-up inspection. Ogana went to the
"Tool and Die" section and saw several employees, including the respondents,
already leaving the area. He noticed, however, that Alcon picked up the carton
that Altiche claimed the respondents used as mattress during their sexual act,
and returned it to the place where the cartons were kept. Altiche then
submitted a handwritten report6 of the incident to Imasens Finance and
Administration Manager.
On October 14, 2002, Imasen issued the respondents separate interoffice
memoranda7 informing them of Altichesreport on the October 5, 2002
incident and directing them to submit their individual explanation. The
respondents complied with the directive; they claimed that they were merely
sleeping in the "Tool and Die" section at the time of the incident. They also
claimed that other employees were near the area, making the commission of
the act charged impossible.
On October 22, 2002, Imasen issued the respondents another interoffice
memorandum8 directing them to appear atthe formal hearing of the
administrative charge against them. The hearing was conducted on October
30, 2002,9 presided by a mediator and attended by the representatives of
Imasen, the respondents, Altiche and Ogana. Altiche and Ogana reiterated the
narrations in Altiches handwritten report.
On December 4, 2002, Imasen issued the respondents separate interoffice
memoranda10 terminating their services. It found the respondents guilty of the
act charged which it considered as "gross misconduct contrary to the existing
policies, rules and regulations of the company."
On December 5, 2002, the respondents filed before the LA the
Complaint11 for illegal dismissal. The respondents maintained their version of
the incident.
In the December 10, 2004 decision,12 the LA dismissed the respondents
complaint for lack of merit. The LA found the respondents dismissal valid,
i.e., for the just cause of gross misconduct and with due process. The LA gave
weight to Altiches account of the incident, which Ogana corroborated, over
the respondentsmere denial of the incident and the unsubstantiated
explanation that other employees were present near the "Tool and Die"
section, making the sexual act impossible. The LA additionally pointed out
that the respondents did not show any ill motive or intent on the part of
Altiche and Ogano sufficient to render their accounts of the incident
suspicious.
The NLRCs ruling
In its December 24, 2008 decision,13 the NLRC dismissed the respondents
appeal14 for lack of merit. In affirming the LAs ruling, the NLRC declared
that Imasen substantially and convincingly proved just cause for dismissing
the respondents and complied with the required due process.
The respondents filed before the CA a petition for certiorari15 after the NLRC
denied their motion for reconsideration16 in its May 29, 2009 resolution.17
The CAs ruling
In its June 9, 2010 decision,18 the CA nullified the NLRCs ruling. The CA
agreed with the labor tribunals findings regarding the infraction charged
engaging in sexual intercourse on October 5, 2002 inside company premises
and Imasens observance of due process in dismissing the respondents from
employment.
The CA, however, disagreed with the conclusion that the respondents sexual
intercourse inside company premises constituted serious misconduct that the
Labor Code considers sufficient tojustify the penalty of dismissal. The CA
pointed out that the respondents act, while provoked by "reckless passion in
an inviting environment and time," was not done with wrongful intent or with
the grave or aggravated character that the law requires. To the CA, the penalty
of dismissal is not commensurate to the respondents act, considering
especially that the respondents had not committed any infraction in the past.
Accordingly, the CA reduced the respondents penalty to a threemonth
suspension and ordered Imasen to: (1) reinstate the respondents to their former
position without loss of seniority rights and other privileges; and (2) pay the
respondents backwages from December 4, 2002 until actual reinstatement,
less the wages corresponding to the three-month suspension.
Imasen filed the present petition after the CA denied its motion for
Reconsideration19 in the CAs December 22, 2010 resolution.20
The Petition
Imasen argues in this petition that the act of engaging in sexual intercourse
inside company premises during work hours is serious misconduct by
whatever standard it is measured. According to Imasen, the respondents
infraction is an affront to its core values and high ethical work standards, and
justifies the dismissal. When the CA reduced the penalty from dismissal to
three-month suspension, Imasen points out that the CA, in effect, substituted
its own judgment with its (Imasens) own legally protected management
prerogative.
Lastly, Imasen questions the CAs award of backwages in the respondents
favor. Imasen argues that the respondents would virtually gain from their
infraction as they would be paid eight years worth of wages without having
rendered any service; eight (8) years, in fact, far exceeds their actual period of
service prior to their dismissal.
The Case for the Respondents
The respondents argue in their comment21 that the elements of serious
misconduct that justifies an employees dismissal are absent in this case,
adopting thereby the CAs ruling. Hence, to the respondents, the CA correctly
reversed the NLRCs ruling; the CA, in deciding the case, took a wholistic
consideration of all the attendant facts, i.e., the time, the place, the persons
involved, and the surrounding circumstances before, during, and after the
sexual intercourse, and not merely the infraction committed.
The Issue
The sole issue for this Courts resolution is whether the respondents
infraction engaging in sexual intercourse inside company premises during
work hours amounts to serious misconduct within the terms of Article 282
(now Article 296) of the Labor Code justifying their dismissal.
The Courts Ruling
We GRANT the petition.
We find that the CA reversibly erred when it nullified the NLRCs decision
for grave abuse of discretion the NLRCs decision.
Preliminary considerations: tenurial security vis--vis management
prerogative
The law and jurisprudence guaranteeto every employee security of tenure.
This textual and the ensuing jurisprudential commitment to the cause and
welfare of the working class proceed from the social justice principles of the
Constitution that the Court zealously implements out of its concern for those
with less in life. Thus, the Court will not hesitate to strike down as invalid any
employer act that attempts to undermine workers tenurial security. All these
the State undertakes under Article 279 (now Article 293)22 of the Labor Code
which bar an employer from terminating the services of an employee, except
for just or authorized cause and upon observance of due process.
In protecting the rights of the workers, the law, however, does not authorize
the oppression or self-destruction of the employer.23 The constitutional
commitment to the policy of social justice cannot be understood to mean that
every labor dispute shall automatically be decided in favor of labor.24 The
constitutional and legal protection equally recognize the employers right and
prerogative to manage its operation according to reasonable standards and
norms of fair play.
Accordingly, except as limited by special law, an employer is free to regulate,
according to his own judgment and discretion, all aspects of employment,
including hiring, work assignments, working methods, time, place and manner
of work, tools to beused, processes to be followed, supervision of workers,
working regulations, transfer of employees, worker supervision, layoff of
workers and the discipline, dismissal and recall of workers.25 As a general
proposition, an employer has free reign over every aspect of its business,
including the dismissal of his employees as long as the exercise of its
management prerogativeis done reasonably, in good faith, and in a manner not
otherwise intended to defeat or circumvent the rights of workers.
In these lights, the Courts task inthe present petition is to balance the
conflicting rights of the respondents to security of tenure, on one hand, and of
Imasen to dismiss erring employees pursuant to the legitimate exercise of its
management prerogative, on the other.
Managements right to dismiss an employee; serious misconduct as just cause
for the dismissal
The just causes for dismissing an employee are provided under Article
28226 (now Article 296)27 of the Labor Code. Under Article 282(a), serious
misconduct by the employee justifies the employer in terminating his or her
employment.
Misconduct is defined as an improper or wrong conduct. It is a 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 in
judgment.28 To constitute a valid cause for the dismissal within the text and
meaning of Article 282 of the Labor Code, the employees misconduct must
be serious, i.e., of such grave and aggravated character and not merely trivial
or unimportant.29
Additionally, the misconduct must be related to the performance of the
employees duties showing him tobe unfit to continue working for the
employer.30 Further, and equally important and required, the act or conduct
must have been performed with wrongful intent.31
To summarize, for misconduct or improper behavior to be a just cause for
dismissal, the following elements must concur: (a) the misconduct must be
serious; (b) it must relate to the performance of the employees duties showing
that the employee has become unfit to continue working for the
employer;32 and (c) it must have been performed with wrongful intent.
The respondents infraction amounts to serious misconduct within the terms of
Article 282 (now Article296) of the Labor Code justifying their dismissal
Dismissal situations (on the ground of serious misconduct) involving sexual
acts, particularly sexual intercourse committed by employees inside company
premises and during workhours, are not usual violations33 and are not found in
abundance under jurisprudence. Thus, in resolving the present petition, we are
largely guided by the principles we discussed above, as applied to the totality
of the circumstances that surrounded the petitioners dismissal.
In other words, we view the petitioners act from the prism of the elements
that must concur for an act to constitute serious misconduct, analyzed and
understood within the context of the overall circumstances of the case. In
taking this approach, weare guided, too, by the jurisdictional limitations that a
Rule 45 review of the CAs Rule 65 decision in labor cases imposes on our
discretion.34
In addressing the situation that we are faced with in this petition, we
determine whether Imasen validly exercised its prerogative as employer to
dismiss the respondents-employees who, within company premises and during
work hours, engaged in sexual intercourse. As framed within our limited Rule
45 jurisdiction, the question that we ask is: whether the NLRC committed
grave abuse of discretion in finding that the respondents act amounted to
what Article 282 of the Labor Code textually considers as serious misconduct
to warrant their dismissal.
After due consideration, we find the NLRC legally correct and well within its
jurisdiction when it affirmed the validity of the respondents dismissal on the
ground of serious misconduct.
Sexual acts and intimacies between two consenting adults belong, as a
principled ideal, to the realm of purely private relations.1wphi1 Whether
aroused by lust or inflamed by sincere affection, sexual acts should be carried
out at such place, time and circumstance that, by the generally accepted norms
of conduct, will not offend public decency nor disturb the generally held or
accepted social morals. Under these parameters, sexual acts between two
consenting adults do not have a place in the work environment.
Indisputably, the respondents engaged in sexual intercourse inside company
premisesand during work hours. These circumstances, by themselves, are
already punishablemisconduct. Added to these considerations, however, is the
implication that the respondents did not only disregard company rules but
flaunted their disregard in a manner that could reflect adversely on the status
of ethics and morality in the company.
Additionally, the respondents engaged in sexual intercourse in an area where
co-employees or other company personnel have ready and available access.
The respondents likewise committed their act at a time when the employees
were expected to be and had, in fact, been at their respective posts, and when
they themselves were supposed to be, as all other employees had in fact been,
working.
Under these factual premises and inthe context of legal parameters we
discussed, we cannot help but consider the respondents misconduct to be of
grave and aggravated character so that the company was justified in imposing
the highest penalty available dismissal. Their infraction transgressed the
bounds of sociallyand morally accepted human public behavior, and at the
same time showedbrazen disregard for the respect that their employer
expected of them as employees. By their misconduct, the respondents, in
effect, issued an open invitation for othersto commit the same infraction, with
like disregard for their employers rules, for the respect owed to their
employer, and for their co-employees sensitivities. Taken together, these
considerations reveal a depraved disposition that the Court cannot but
consider as a valid cause for dismissal. In ruling as we do now, we considered
the balancing between the respondents tenurial rights and the petitioners
interests the need to defend their management prerogative and to maintain as
well a high standard of ethics and morality in the workplace. Unfortunately for
the respondents, in this balancing under the circumstances ofthe case, we have
to rule against their tenurial rights in favor of the employers management
rights.
All told, the respondents misconduct,under the circumstances of this case, fell
within the terms of Article 282 (now Article 296) of the Labor Code.
Consequently, we reverse the CAs decision for its failure to recognize that no
grave abuse of discretion attended the NLRCs decision to support the
respondents dismissal for serious misconduct.
WHEREFORE, in light of these considerations, we hereby GRANT the
petition. We REVERSE the decision dated June 9, 2010 and the resolution
dated December 22, 2010 of the Court of Appeals in CA-G.R. SP No. 110327
and REINSTATE the decision dated December 24, 2008 of the National
Labor Relations Commission in NLRC CA No. 043915-05 (NLRC Case No.
RAB IV-12-1661-02-L).
SO ORDERED.

THIRD DIVISION
G.R. No. 193789, September 19, 2012
ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V. CRUZ,
ROSEMARIE P. PIMENTEL, AND ROWENA B. BARDAJE,
PETITIONERS, VS. BIOMEDICA HEALTH CARE, INC. AND
CARINA KAREN J. MOTOL, RESPONDENTS.
DECISION
VELASCO JR., J.:
The Case
This Petition for Review on Certiorari under Rule 45 seeks to annul the June
25, 2010[1] Decision and September 20, 2010[2] Resolution of the Court of
Appeals (CA) in CA-G.R. SP No. 108205, finding that petitioners were
validly dismissed. The CA Decision overturned the Decision dated November
21, 2008[3] of the National Labor Relations Commission (NLRC) and
reinstated the Decision dated March 31, 2008[4] of Labor Arbiter Ligerio V.
Ancheta.
The Facts
Respondent Biomedica Health Care, Inc. (Biomedica) was, during the
material period, engaged in the distribution of medical equipment. Respondent
Carina Karen J. Motol (Motol) was then its President.
Petitioners were former employees of Biomedica holding the following
positions:
Alex Q. Naranjo (Naranjo) - Liaison Officer
Ronald Allan V. Cruz (Cruz) - Service Engineer
Rowena B. Bardaje (Bardaje) - Administration Clerk
Donnalyn De Guzman (De Guzman) - Sales Representative
Rosemarie P. Pimentel (Pimentel) - Accounting Clerk[5]
On November 7, 2006, which happened to be Motols birthday, petitioners
with two (2) other employees, Alberto Angeles (Angeles) and Rodolfo
Casimiro (Casimiro)were all absent for various personal reasons. De
Guzman was allegedly absent due to loose bowel movement,[6] Pimentel for
an ophthalmology check-up,[7] Bardaje due to migraine,[8] Cruz for not feeling
well,[9] and Naranjo because he had to attend a meeting at his childs
school.[10] Notably, these are the same employees who filed a letter-complaint
dated October 31, 2006[11] addressed to Director Lourdes M. Transmonte,
National Director, National Capital Region-Department of Labor and
Employment (DOLE) against Biomedica for lack of salary increases, failure to
remit Social Security System and Pag-IBIG contributions, and violation of the
minimum wage law, among other grievances. Per available records, the
complaint has not been acted upon.
Later that day, petitioners reported for work after receiving text messages for
them to proceed to Biomedica. They were, however, refused entry and told to
start looking for another workplace.[12]
The next day, November 8, 2006, petitioners allegedly came in for work but
were not allowed to enter the premises.[13] Motol purportedly informed
petitioners, using foul language, to just find other employment.
Correspondingly, on November 9, 2006, Biomedica issued a notice of
preventive suspension and notices to explain within 24 hours (Notices)[14] to
petitioners. In the Notices, Biomedica accused the petitioners of having
conducted an illegal strike and were accordingly directed to explain why they
should not be held guilty of and dismissed for violating the company policy
against illegal strikes under Article XI, Category Four, Sections 6, 8, 12, 18
and 25 of the Company Policy. The individual notice reads:
Subject: Notice of Preventive Suspension
& Notice to explain within 24 hours
Effective upon receipt hereof, you are placed under preventive suspension for
willfully organizing and/or engaging in illegal strike on November 7, 2006.
Your said illegal act-in conspiracy with your other co-employees, paralyzed
the company operation on that day and resulted to undue damage and
prejudice to the company and is direct violation of Article XI, Category Four
Section 6, 8, 12, 18 & 25 of our Company Policy, which if found guilty, you
will be meted a penalty of dismissal.
Please explain in writing within 24 hours from receipt hereof why you should
not be held guilty of violating the company policy considering further that you
committed and timed such act during the birthday of our Company president.
On November 15, 2006, petitioners were required to proceed to the Biomedica
office where they were each served their Notices.[15] Only Angeles and
Casimiro submitted their written explanation for their absence wherein they
alleged that petitioners forced them to go on a mass leave while asking
Biomedica for forgiveness for their actions.
On November 20, 2006, petitioners filed a Complaint with the NLRC for
constructive dismissal and nonpayment of salaries, overtime pay, 13th month
pay as well as non-remittance of SSS, Pag-IBIG and Philhealth contributions
as well as loan payments. The case was docketed as Case No. 00-09597-06.
Thereafter, Biomedica served Notices of Termination on petitioners. All dated
November 29, 2006,[16] the notices uniformly stated:
We regret to inform you that since you did not submit the written letter of
explanation as requested in your preventive suspension notice dated
November 9, 2006, under Article XI, Category Four, Section 6, 8, 12, 18 and
25 you are hereby dismissed from service effective immediately.
On March 31, 2008, the Labor Arbiter issued a Decision,[17] the dispositive
portion of which reads:
WHEREFORE, the foregoing premises considered, judgment is hereby
rendered dismissing for lack of merit the instant complaint for illegal
dismissal.
However, the respondents are hereby ORDERED, jointly and severally, to pay
the complainants the following:
Unpaid salary for the period 08-15 November 2006;
Pro-rated 13th month pay for 2006; and
Service Incentive Leave for 2006 (except for complainant Bardaje).
From the monetary award given to complainant Naranjo, the amount of
PhP4,750.00 shall be deducted.
From the monetary award given to complainant Pimentel, the amount of
PhP4,500.00 shall be deducted.
A detailed computation of the monetary awards, as of the date of this
Decision, is embodied in Annex A which is hereby made an integral part
hereof.
SO ORDERED.[18]
The Labor Arbiter found that, indeed, petitioners engaged in a mass leave akin
to a strike. He added that, assuming that petitioners were not aware of the
company policies on illegal strikes, such mass leave can sufficiently be
deemed as serious misconduct under Art. 282 of the Labor Code. Thus, the
Labor Arbiter concluded that petitioners were validly dismissed.
Petitioners appealed the Labor Arbiters Decision to the NLRC which
rendered a modificatory Decision dated November 21, 2008.[19] Unlike the
Labor Arbiter, the NLRC found and so declared petitioners to have been
illegally dismissed and disposed as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered
modifying the assailed Decision dated April 11, 2008 [sic];[20]
(a) DECLARING the Complainants to have been illegally dismissed for lack
of just cause;
(b) ORDERING Respondents to pay separation pay in lieu of reinstatement
and payment of backwages computed on the basis of one (1) month pay
for every year of service up to the date of complainants illegal dismissal;
(c) ORDERING the respondents to pay complainant De Guzman and Cruz
their unpaid commission on the basis of their sale for year 2005-2006;
(d) Sustaining the monetary award as stated in the Decision dated April 11,
2008;
(e) ORDERING the respondents to pay attorneys fees in the amount of 10%
of the total award of monetary claims.
All other claims and counterclaims are dismissed for lack of factual and legal
basis.
SO ORDERED.[21]
Thereafter, Biomedica moved but was denied reconsideration per the NLRCs
Resolution dated January 30, 2009.[22]
From the Decision and Resolution of the NLRC, Biomedica appealed the case
to the CA which rendered the assailed Decision dated June 25, 2010, the
dispositive portion of which reads:
WHEREFORE, premises considered, the assailed Decision and Resolution
of public respondent National Labor Relations Commission (NLRC) dated
November 21, 2008 and January 30, 2009 respectively in NLRC NCR CN 00-
11-09597-06 are hereby ANNULLED and SET ASIDE. Decision of the labor
arbiter is hereby REINSTATED.
SO ORDERED.[23]
In its assailed Resolution dated September 20, 2010, the CA denied
petitioners Motion for Reconsideration. The CA ruled that, indeed,
petitioners staged a mass leave in violation of company policy. This fact,
coupled with their refusal to explain their actions, constituted serious
misconduct that would justify their dismissal.
Hence, the instant appeal.
The Issues
I.
The Court of Appeals, with all due respect, gravely erred in concluding facts
in the case which were neither rebutted nor proved as to its truthfulness.
II.
The Court of Appeals, with all due respect, gravely erred in ruling that grave
abuse of discretion was committed by the NLRC and by reason of the same, it
upheld the Decision of the Labor Arbiter stating that petitioners were not
illegally dismissed.
III.
The Court of Appeals, with all due respect, gravely erred in ruling that grave
abuse of discretion was committed by the NLRC and by reason of the same, it
upheld the Decision of the Labor Arbiter in relation to petitioners[] money
claims.[24]
The Courts Ruling
This petition is meritorious.
Petitioners were illegally dismissed
The fundamental law of the land guarantees security of tenure, thus:
Sec. 3. The State shall afford full protection to labor x x x.
x x x They shall be entitled to security of tenure, humane conditions of work
and a living wage.[25] x x x
On the other hand, the Labor Code promotes the right of the worker to
security of tenure protecting them against illegal dismissal:
ARTICLE 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.
It bears pointing out that in the dismissal of an employee, the law requires that
due process be observed. Such due process requirement is two-fold,
procedural and substantive, that is, the termination of employment must be
based on a just or authorized cause of dismissal and the dismissal must be
effected after due notice and hearing.[26] In the instant case, petitioners were
not afforded both procedural and substantive due process.
Petitioners were not afforded
procedural due process
Art. 277(b) of the Labor Code contains the procedural due process
requirements in the dismissal of an employee:
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.
On the other hand, Rule XIII, Book V, Sec. 2 I (a) of the Implementing Rules
and Regulations of the Labor Code 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. (Emphasis supplied.)
Thus, the Court elaborated in King of Kings Transport, Inc. v. Mamac[27] that
a mere general description of the charges against an employee by the
employer is insufficient to comply with the above provisions of the law:
x x x 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.
xxxx
x x x 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.
(Emphasis supplied.)
In the instant case, the notice specifying the grounds for termination dated
November 9, 2006 states:
Effective upon receipt hereof, you are placed under preventive suspension for
willfully organizing and/or engaging in illegal strike on November 7, 2006.
Your said illegal act-in conspiracy with your other co-employees, paralyzed
the company operation on that day and resulted to undue damage and
prejudice to the company and is direct violation of Article XI, Category
Four Section 6, 8, 12, 18 & 25 of our Company Policy, which if found
guilty, you will be meted a penalty of dismissal.
Please explain in writing within 24 hours from receipt hereof why you should
not be held guilty of violating the company policy considering further that you
committed and timed such act during the birthday of our Company
president.[28]
Clearly, petitioners were charged with conducting an illegal strike, not a mass
leave, without specifying the exact acts that the company considers as
constituting an illegal strike or violative of company policies. Such allegation
falls short of the requirement in King of Kings Transport, Inc. of a detailed
narration of the facts and circumstances that will serve as basis for the charge
against the employees. A bare mention of an illegal strike will not suffice.
Further, while Biomedica cites the provisions of the company policy which
petitioners purportedly violated, it failed to quote said provisions in the notice
so petitioners can be adequately informed of the nature of the charges against
them and intelligently file their explanation and defenses to said accusations.
The notice is bare of such description of the company policies. Moreover, it is
incumbent upon respondent company to show that petitioners were duly
informed of said company policies at the time of their employment and were
given copies of these policies. No such proof was presented by respondents.
There was even no mention at all that such requirement was met. Worse,
respondent Biomedica did not even quote or reproduce the company policies
referred to in the notice as pointed out by the CA stating:
It must be noted that the company policy which the petitioner was referring to
was not quoted or reproduced in the petition, a copy of which is not also
appended in the petition, as such we cannot determine the veracity of the
existence of said policy.[29]
Without a copy of the company policy being presented in the CA or the
contents of the pertinent policies being quoted in the pleadings, there is no
way by which one can determine whether or not there was, indeed, a violation
of said company policies.
Moreover, the period of 24 hours allotted to petitioners to answer the notice
was severely insufficient and in violation of the implementing rules of the
Labor Code. Under the implementing rule of Art. 277, an employee should be
given reasonable opportunity to file a response to the notice. King of Kings
Transport, Inc. elucidates in this wise:
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. 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.[30] (Emphasis supplied.)
Following King of Kings Transport, Inc., the notice sent out by Biomedica in
an attempt to comply with the first notice of the due process requirements of
the law was severely deficient.
In addition, Biomedica did not set the charges against petitioners for hearing
or conference in accordance with Sec. 2, Book V, Rule XIII of the
Implementing Rules and Regulations of the Labor Code and in line with
ruling in King of Kings Transport, Inc., where the Court explained:
(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.[31]
While petitioners did not submit any written explanation to the charges, it is
incumbent for Biomedica to set the matter for hearing or conference to hear
the defenses and receive evidence of the employees. More importantly,
Biomedica is duty-bound to exert efforts, during said hearing or conference, to
hammer out a settlement of its differences with petitioners. These
prescriptions Biomedica failed to satisfy.
Lastly, Biomedica again deviated from the dictated contents of a written
notice of termination as laid down in Sec. 2, Book V, Rule XIII of the
Implementing Rules that it should embody the facts and circumstances to
support the grounds justifying the termination. As amplified in King of Kings
Transport, Inc.:
(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.[32]
The November 26, 2006 Notice of Termination issued by Biomedica
miserably failed to satisfy the requisite contents of a valid notice of
termination, as it simply mentioned the failure of petitioners to submit their
respective written explanations without discussing the facts and circumstances
to support the alleged violations of Secs. 6, 8, 12, 18 and 25 of Category Four,
Art. XI of the alleged company rules.
All told, Biomedica made mincemeat of the due process requirements under
the Implementing Rules and the King of Kings Transport, Inc. ruling by
simply not following any of their dictates, to the extreme prejudice of
petitioners.
Petitioners were denied substantive due process
In any event, petitioners were also not afforded substantive due process, that
is, they were illegally dismissed.
The just causes for the dismissal of an employee are exclusively found in Art.
282(a) of the Labor Code, which states:
ARTICLE 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.
It was on this ground that the CA upheld the dismissal of petitioners from
their employment. Serious misconduct, as a justifying ground for the dismissal
of an employee, has been explained in Aliviado v. Procter & Gamble, Phils.,
Inc.:[33]
Misconduct has been defined as improper or wrong conduct; the
transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, unlawful in character implying 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.
To be a just cause for dismissal, such misconduct (a) must be serious; (b) must
relate to the performance of the employees duties; and (c) must show that the
employee has become unfit to continue working for the employer.
Clearly, to justify the dismissal of an employee on the ground of serious
misconduct, the employer must first establish that the employee is guilty of
improper conduct, that the employee violated an existing and valid company
rule or regulation, or that the employee is guilty of a wrongdoing. In the
instant case, Biomedica failed to even establish that petitioners indeed violated
company rules, failing to even present a copy of the rules and to prove that
petitioners were made aware of such regulations. In fact, from the records of
the case, Biomedica has failed to prove that petitioners are guilty of a
wrongdoing that is punishable with termination from employment. Art.
277(b) of the Labor Code states, The burden of proving that the termination
was for a valid or authorized cause shall rest on the employer. In the instant
case, Biomedica failed to overcome such burden. As will be shown,
petitioners absence on November 7, 2006 cannot be considered a mass leave,
much less a strike and, thus, cannot justify their dismissal from employment.
Petitioners did not stage a mass leave
The accusation is for engaging in a mass leave tantamount to an illegal strike.
The term Mass Leave has been left undefined by the Labor Code. Plainly,
the legislature intended that the terms ordinary sense be used. Mass is the procedure by which such leaves can be enjoyed. Absent such pertinent
defined as participated in, attended by, or affecting a large number of
individuals; having a large-scale character.[34] While the term Leave is petitioners of their respective leaves on November 7, 2006 was authorized,
defined as an authorized absence or vacation from duty or employment
usually with pay.[35]
Thus, the phrase mass leave may refer to a simultaneous availment of
authorized leave benefits by a large number of employees in a company.
It is undeniable that going on leave or absenting ones self from work for
personal reasons when they have leave benefits available is an employees
right. In Davao Integrated Port Stevedoring Services v. Abarquez,[36] the
Court acknowledged sick leave benefits as a legitimate economic benefit of an
employee, carrying a purpose that is at once legal as it is practical:
Sick leave benefits, like other economic benefits stipulated in the CBA such as
maternity leave and vacation leave benefits, among others, are by their nature,
intended to be replacements for regular income which otherwise would not be
earned because an employee is not working during the period of said leaves.
They are non-contributory in nature, in the sense that the employees
contribute nothing to the operation of the benefits. By their nature, upon
agreement of the parties, they are intended to alleviate the economic condition
of the workers.
In addition to sick leave, the company, as a policy or practice or as agreed to
in a CBA, grants vacation leave to employees. Lastly, even the Labor Code
grants a service incentive leave of 5 days to employees. Moreover, the
company or the CBA lays down the procedure in the availment of the vacation
leave, sick leave or service incentive leave.
In the factual milieu at bar, Biomedica did not submit a copy of the CBA or a
company memorandum or circular showing the authorized sick or vacation
leaves which petitioners can avail of. Neither is there any document to show
documentary evidence, the Court can only conclude that the availment of
valid and in accordance with the company or CBA rules on entitlement to and
availment of such leaves. The contention of Biomedica that the enjoyment of
said leaves is in reality an illegal strike does not hold water in the absence of
strong controverting proof to overturn the presumption that a person is
innocent of x x x wrong.[37] Thus, the individual leaves of absence taken by
the petitioners are not such absences that can be regarded as an illegal mass
action.
Moreover, a mass leave involves a large number of people or in this case,
workers.
Here, the five (5) petitioners were absent on November 7, 2006. The records
are bereft of any evidence to establish how many workers are employed in
Biomedica. There is no evidence on record that 5 employees constitute a
substantial number of employees of Biomedica. And, as earlier stated, it is
incumbent upon Biomedica to prove that petitioners were dismissed for just
causes, this includes the duty to prove that the leave was large-scale in
character and unauthorized. This, Biomedica failed to prove.
Having failed to show that there was a mass leave, the Court concludes that
there were only individual availment of their leaves by petitioners and they
cannot be held guilty of any wrongdoing, much less anything to justify their
dismissal from employment. On this ground alone, the petition must be
granted.
Petitioners did not go on strike

Granting for the sake of argument that the absence of the 5 petitioners on
November 7, 2006 is considered a mass leave, still, their actions cannot be
considered a strike.
Art. 212(o) of the Labor Code defines a strike as any temporary stoppage of
work by the concerted action of employees as a result of any industrial or
labor dispute.
Concerted is defined as mutually contrived or planned or performed in
unison.[38] In the case at bar, the 5 petitioners went on leave for various
reasons. Petitioners were in different places on November 7, 2006 to attend to
their personal needs or affairs. They did not go to the company premises to
petition Biomedica for their grievance. To demonstrate their good faith in
availing their leaves, petitions reported for work and were at the company
premises in the afternoon after they received text messages asking them to do
so. This shows that there was NO intent to go on strike. Unfortunately, they
were barred from entering the premises and were told to look for new
jobs. Surely the absence of petitioners in the morning of November 7, 2006
cannot in any way be construed as a concerted action, as their absences are
presumed to be for valid causes, in good faith, and in the exercise of their right
to avail themselves of CBA or company benefits. Moreover, Biomedica did
not prove that the individual absences can be considered as temporary
stoppage of work. Biomedicas allegation that the mass leave paralyzed the
company operation on that day has remained unproved. It is erroneous,
therefore, to liken the alleged mass leave to an illegal strike much less to
terminate petitioners services for it.
Notably, the CA still ruled that petitioners went on strike as evidenced by the
explanation letters of Angeles and Casimiro sent by Biomedica. They stated
in the letters that they, along with petitioners, agreed to go on leave on the
birthday on Motol to stress their demands against the company.
These statements do not deserve much weight and credit.
Sec. 11(c) of the 2011 NLRC Rules of Procedure relevantly provides:
SECTION 11. SUBMISSION OF POSITION PAPER AND REPLY. x x x
xxxx
c) The position papers of the parties shall cover only those claims and causes
of action stated in the complaint or amended complaint, accompanied by all
supporting documents, including the affidavits of witnesses, which shall take
the place of their direct testimony, excluding those that may have been
amicably settled. (Emphasis supplied.)
In the instant case, the CA accepted as evidence the explanation letters issued
by Angeles and Casimiro when these are not notarized. While notarization
may seem to be an inconsequential requirement considering that the Labor
Arbiter and the NLRC are not strictly bound by technical rules of evidence,
however, mere explanation letters submitted to the company that the authors
issued even before the case was filed before the NLRC cannot be accepted as
direct testimony of the authors. The requirement that the direct testimony can
be contained in an affidavit is to ensure that the affiant swore under oath
before an administering officer that the statements in the affidavit are
true. The affiant knows that he or she can be charged criminally for perjury
under solemn affirmation or at least he or she is bound to his or her
oath. Thus, the affidavits or sworn statements of these employees should have
been presented. At the very least, the workers should have been summoned to
testify on such letters. Ergo, these letters cannot be the sole basis for the
finding that petitioners conducted a strike against Biomedica and for the
termination of their employment. Lastly, the explanation letters cannot
overcome the clear and categorical statements made by the petitioners in their
verified positions papers. As between the verified statements of petitioners
and the unsworn letters of Angeles and Casimiro, clearly, the former must
prevail and are entitled to great weight and value.
Finally, it cannot be overemphasized that in case of doubt, a case should be
resolved in favor of labor. As aptly stated in Century Canning Corporation v.
Ramil:[39]
x x x Unsubstantiated suspicions, accusations, and conclusions of employers
do not provide for legal justification for dismissing employees. In case of
doubt, such cases should be resolved in favor of labor, pursuant to the social
justice policy of labor laws and the Constitution.
Biomedica has failed to adduce substantial evidence to prove that petitioners
dismissal from their employment was for a just or authorized cause. The
conclusion is inescapable that petitioners were illegally dismissed.
Dismissal is not the proper penalty
But setting aside from the nonce the facts established above, the most pivotal
argument against the dismissal of petitioners is that the penalty of dismissal
from employment cannot be imposed even if we assume that petitioners went
on an illegal strike. It has not been shown that petitioners are officers of the
Union. On this issue, the NLRC correctly cited Gold City Integrated Port
Service, Inc. v. NLRC,[40] wherein We ruled that: An ordinary striking worker
cannot be terminated for mere participation in an illegal strike. There must be
proof that he committed illegal acts during a strike.
In the instant case, Biomedica has not alleged, let alone, proved the
commission by petitioners of any illegal act during the alleged mass leave.
There being none, the mere fact that petitioners conducted an illegal strike
cannot be a legal basis for their dismissal.
Petitioners are entitled to separation pay in lieu of
reinstatement, backwages and nominal damages
Given the illegality of their dismissal, petitioners are entitled to reinstatement
and backwages as provided in Art. 279 of the Labor Code, which states:
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, the Court ruled in Golden Ace Builders v. Talde,[41] citing Macasero v.
Southern Industrial Gases Philippines:[42]
Thus, an illegally dismissed employee is entitled to two reliefs: backwages
and reinstatement. The two reliefs provided are separate and distinct. In
instances where reinstatement is no longer feasible because of strained
relations between the employee and the employer, separation pay is granted.
In effect, an illegally dismissed employee is entitled to either reinstatement, if
viable, or separation pay if reinstatement is no longer viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are
reinstatement without loss of seniority rights, and payment of backwages
computed from the time compensation was withheld up to the date of
actual reinstatement. Where reinstatement is no longer viable as an
option, separation pay equivalent to one (1) month salary for every year
of service should be awarded as an alternative. The payment of
separation pay is in addition to payment of backwages. (Emphasis
supplied.)
Petitioners were absent from work on Motols birthday. Respondent Motol, in
the course of denying entry to them on November 8, 2006, uttered harsh,
degrading and bad words. Petitioners were terminated in swift fashion and in
gross violation of their right to due process revealing that they are no longer
wanted in the company. The convergence of these facts coupled with the
filing by petitioners of their complaint with the DOLE shows a relationship
governed by antipathy and antagonism as to justify the award of separation
pay in lieu of reinstatement. Thus, in addition to backwages, owing to the
strained relations between the parties, separation pay in lieu of reinstatement
would be proper. In Golden Ace Builders, We explained why:
Under the doctrine of strained relations, the payment of separation pay is
considered an acceptable alternative to reinstatement when the latter option is
no longer desirable or viable. On one hand, such payment liberates the
employee from what could be a highly oppressive work environment. On the
other hand, it releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.
Strained relations must be demonstrated as a fact, however, to be adequately
supported by evidence substantial evidence to show that the relationship
between the employer and the employee is indeed strained as a necessary
consequence of the judicial controversy.[43]
And in line with prevailing jurisprudence,[44] petitioners are entitled to
nominal damages in the amount of PhP 30,000 each for Biomedicas violation
of procedural due process.
WHEREFORE, the Decision dated June 25, 2010 and the Resolution dated
September 20, 2010 of the CA in CA-G.R. SP No. 108205 are hereby
REVERSED and SET ASIDE. The Decision dated November 21, 2008 of
the NLRC in NLRC LAC No. 08-002836-08 is hereby REINSTATED with
MODIFICATION. As modified, the November 21, 2008 NLRC Decision
shall read, as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered
modifying the assailed Decision [of the Labor Arbiter] dated [March 31,
2008];
(a) DECLARING the Complainants to have been illegally dismissed for lack
of just cause;
(b) ORDERING Respondents jointly and solidarily to pay Complainants
separation pay in lieu of reinstatement computed on the basis of one (1) month
pay for every year of service from date of employment up to November 29,
2006 (the date of complainants illegal dismissal);
(c) ORDERING Respondents jointly and solidarily to pay Complainants
backwages from November 29, 2006 up to the finality of this Decision;
(d) ORDERING the Respondents jointly and solidarily to pay Complainants
the following:
1. Unpaid salary for the period 08-15 November 2006;
2. Pro-rated 13th month pay for 2006;
3. Service Incentive Leave for 2006 (except for complainant Bardaje);
4. Unpaid commissions based on their sales for the years 2005 and 2006;
and
5. Nominal damages in the amount of PhP 30,000 each.
(e) ORDERING the Respondents jointly and solidarily to pay Complainants
attorneys fees in the amount of 10% of the total award of monetary claims.
All other claims and counterclaims are dismissed for lack of factual and legal
basis.
The NLRC is ordered to recompute the monetary awards due to petitioners
based on the aforelisted dispositions deducting from the awards to Naranjo
and Pimentel their cash advances of PhP4,750.00 and PhP4,500.00,
respectively.
G.R. No. 220998, August 08, 2016
HOLCIM PHILIPPINES, INC., Petitioner, v. RENANTE J.
OBRA, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari,1 filed by petitioner
Holcim Philippines, Inc. (petitioner), assailing the Decision2 dated February
13, 2015 and the Resolution3 dated September 7, 2015 of the Court of Appeals
(CA) in CA-G.R. SP No. 136413, which affirmed the Decision4 dated March
31, 2014 and the Resolution5 dated April 30, 2014 of the National Labor
Relations Commission (NLRC) in NLRC LAC No. 03-000696-14(8) / NLRC
CN. RAB-I-09-1102-13(LU-l), holding that respondent Renante J. Obra
(respondent) was illegally dismissed and, thereby, ordering petitioner to pay
him separation pay amounting to P569,772.00 in lieu of reinstatement.
The Facts
Respondent was employed by petitioner as packhouse operator in its La Union
Plant for nineteen (19) years, from March 19, 19946 until August 8, 2013.7 As
packhouse operator, respondent ensures the safe and efficient operation of
rotopackers, auto-bag placers, and cariramats, as well as their auxiliaries.8 At
the time of his dismissal, he was earning a monthly salary of
P29,988.00.9chanrobleslaw
On July 10, 2013, at around 4 o'clock in the afternoon, respondent was about
to exit Gate 2 of petitioner's La Union Plant when the security guard on duty,
Kristian Castillo (Castillo), asked him to submit himself and the backpack he
was carrying for inspection.10 Respondent refused and confided to Castillo
that he has a piece of scrap electrical wire in his bag.11 He also requested
Castillo not to report the incident to the management, and asked the latter if
respondent could bring the scrap wire outside the company premises;
otherwise, he will return it to his locker in the Packhouse Office.12However,
Castillo did not agree, which prompted respondent to turn around and
hurriedly go back to the said office where he took the scrap wire out of his
bag.13 Soon thereafter, a security guard arrived and directed him to go to the
Security Office where he was asked to write a statement regarding the
incident.14chanrobleslaw
In his statement,15 respondent admitted the incident, but asserted that he had
no intention to steal.16He explained that the 16-meter electrical wire was a
mere scrap that he had asked from the contractor who removed it from the
Packhouse Office.17 He also averred that as far as he knows, only scrap
materials which are to be taken out of the company premises in bulk required
a gate pass and that he had no idea that it was also necessary to takeout a piece
of loose, scrap wire out of the company's premises.18 Respondent also
clarified that he hurriedly turned around because he had decided to just return
the scrap wire to the said office.19chanrobleslaw
On July 16, 2013, respondent received a Notice of Gap20 requiring him to
explain within five (5) days therefrom why no disciplinary action, including
termination, should be taken against him on account of the above-mentioned
incident.21 He was also placed on preventive suspension for thirty (30) days
effective immediately.22 In a statement23 dated July 23, 2013, respondent
reiterated that he had no intention to steal from petitioner and that the scrap
wire which he had asked from a contractor was already for disposal
anyway.24 He also expressed his remorse over the incident and asked that he
be given a chance to correct his mistake.25cralawred Meetings of petitioner's
Review Committee were thereafter conducted, with respondent and the
security guards concerned in attendance.26chanrobleslaw
On August 8, 2013, petitioner issued a Decision/Resolution
Memo27 dismissing from service respondent for serious
misconduct.28 Petitioner found no merit in respondent's claim that he was
unaware that a gate pass is required to take out a piece of scrap wire, pointing
out that the same is incredulous since he had been working thereat for
nineteen (19) years already.29 It also drew attention to the fact that respondent
refused to submit his bag for inspection, which, according to petitioner,
confirmed his intention to take the wire for his personal use.30 Further,
petitioner emphasized that respondent's actions violated its rules which,
among others, limit the use of company properties for business purposes only
and mandate the employees, such as respondent, to be fair, honest, ethical, and
act responsibly and with integrity.31chanrobleslaw
In a letter32 dated August 14, 2013, respondent sought reconsideration and
prayed for a lower penalty, especially considering the length of his service to
it and the lack of intent to steal.33 However, in a Memo34 dated August 28,
2013, petitioner denied respondent's appeal. Hence, on September 30, 2013,
respondent filed a complaint35 before the NLRC for illegal dismissal and
money claims, docketed as NLRC Case No. (CN) RAB-I-09-1102-13(LU-l),
averring that the penalty of dismissal from service imposed upon him was too
harsh since he had acted in good faith in taking the piece of scrap
wire.36Respondent maintained that there was no wrongful intent on his part
which would justify his dismissal from service for serious misconduct,
considering that the contractor who removed it from the Packhouse Office led
him to believe that the same was already for disposal.37chanrobleslaw
Meanwhile, petitioner countered that respondent's taking of the electrical wire
for his personal use, without authority from the management, shows his intent
to gain.38 In addition to this, it was highlighted that respondent refused to
submit himself and his bag for inspection and attempted to corrupt Castillo by
convincing him to refrain from reporting the incident to the
management.39 These, coupled with his sudden fleeing from Gate 2, bolster
the charge of serious misconduct against him.40With respect to respondent's
claim that the contractor who removed the wire from the Packhouse Office led
him to believe that the same was already for disposal, petitioner pointed out
that the contractor's personnel have issued statements belying respondent's
claim and categorically stated that they did not give away any electrical wire
to anyone.41chanrobleslaw
The Labor Arbiter's Ruling
In a Decision42 dated January 24, 2014, the Labor Arbiter (LA) dismissed
respondent's complaint and held that the latter was validly dismissed from
service by petitioner for committing the crime of theft, and therefore, not
entitled to reinstatement, backwages, and other money claims.43chanrobleslaw
The NLRC Ruling
In a Decision44 dated March 31, 2014, the NLRC reversed the LA's ruling and
held that the penalty of dismissal from service imposed upon respondent was
unduly harsh since his misconduct was not so gross to deserve such
penalty.45 It found merit in respondent's defense that he took the scrap wire on
the belief that it was already for disposal, noting that petitioner never denied
the same.46 The NLRC also emphasized that petitioner did not suffer any
damage since respondent was not able to take the wire outside the company
premises.47 Moreover, he did not hold a position of trust and confidence and
was remorseful of his mistake, as evidenced by his repeated pleas for another
chance.48 These, coupled with the fact that he had been in petitioner's employ
for nineteen (19) years, made respondent's dismissal from service excessive
and harsh.49 Considering, however, the strained relations between the parties,
the NLRC awarded separation pay in favor of respondent in lieu of
reinstatement.50chanrobleslaw
Petitioner moved for reconsideration,51 which was, however, denied in a
Resolution52 dated April 30, 2014.
The CA Ruling
In a Decision53 dated February 13, 2015, the CA dismissed the petition
for certiorari and affirmed the ruling of the NLRC. It agreed with the NLRC's
observation that respondent was illegally dismissed, pointing out that
petitioner failed to prove that it prohibited its employees from taking scrap
materials outside the company premises. Besides, respondent's taking of the
scrap wire did not relate to the performance of his work as packhouse
operator.54chanrobleslaw
The CA also drew attention to respondent's unblemished record in the
company where he had been employed for nineteen (19) years already, adding
too that bad faith cannot be ascribed to him since he volunteered the
information about the scrap wire to Castillo and offered to return the same if it
was not possible to bring it outside of the company premises.55 According to
the CA, respondent's acts only constituted a lapse in judgment which does not
amount to serious misconduct that would warrant his dismissal from
service.56chanrobleslaw
Dissatisfied, petitioner moved for reconsideration,57 which was denied by the
CA in its Resolution58dated September 7, 2015; hence, the present petition.
The Issue Before the Court
The sole issue for the Court's resolution is whether or not the CA erred in
affirming the ruling of the NLRC.
The Court's Ruling
The petition is partly meritorious.
There is no question that the employer has the inherent right to discipline,
including that of dismissing its employees for just causes.59 This right is,
however, subject to reasonable regulation by the State in the exercise of its
police power.60 Accordingly, the finding that an employee violated company
rules and regulations is subject to scrutiny by the Court to determine if the
dismissal is justified and, if so, whether the penalty imposed is commensurate
to the gravity of his offense.61chanrobleslaw
In this case, the Court agrees with the CA and the NLRC that respondent's
misconduct is not so gross as to deserve the penalty of dismissal from service.
As correctly observed by the NLRC, while there is no dispute that respondent
took a piece of wire from petitioner's La Union Plant and tried to bring it
outside the company premises, he did so in the belief that the same was
already for disposal. Notably, petitioner never denied that the piece of wire
was already for disposal and, hence, practically of no value. At any rate,
petitioner did not suffer any damage from the incident, given that after being
asked to submit himself and his bag for inspection, respondent had a change
of heart and decided to just return the wire to the Packhouse Office.
Respondent has also shown remorse for his mistake, pleading repeatedly with
petitioner to reconsider the penalty imposed upon him.62chanrobleslaw
Time and again, the Court has held that infractions committed by an employee
should merit only the corresponding penalty demanded by the
circumstance.63 The penalty must be commensurate with the act, conduct or
omission imputed to the employee.64chanrobleslaw
In Sagales v. Rustan 's Commercial Corporation,65 the dismissal of a Chief
Cook who tried to take home a pack of squid heads, which were considered as
scrap goods and usually thrown away, was found to be excessive. In arriving
at such decision, the Court took into consideration the fact that the Chief Cook
had been employed by the company for 31 years already and the incident was
his first offense. Besides, the value of the squid heads was a negligible sum of
P50.00 and the company practically lost nothing since the squid heads were
considered scrap goods and usually thrown away. Moreover, the ignominy he
suffered when he was imprisoned over the incident, and his preventive
suspension for one (1) month was enough punishment for his infraction.
Similarly, in Farrol v. CA,M66 a district manager of a bank was dismissed
after he incurred a shortage of P5 0,985.3 7, which sum was used to pay the
retirement benefits of five (5) employees of the bank. Despite being able to
return majority of the missing amount, leaving a balance of only P6,995.37,
the district manager was dismissed on the ground that under the bank's rules,
the penalty therefor is dismissal. According to the Court, the "dismissal
imposed on [him] is unduly harsh and grossly disproportionate to the
infraction which led to the termination of his services. A lighter penalty would
have been more just, if not humane,"67 considering that it was his first
infraction and he has rendered 24 years of service to the bank.
Meanwhile, in the earlier case of Associated Labor Unions-TUCP v.
NLRC,68 the dismissal of an employee, who was caught trying to take a pair of
boots, an empty aluminum container, and 15 hamburger patties, was
considered excessive. The Court ruled that the employee's dismissal would be
disproportionate to the gravity of the offense committed, considering the value
of the articles he pilfered and the fact that he had no previous derogatory
record during his two (2) years of employment in the company. According to
the Court, while the items taken were of some value, such misconduct was not
enough to warrant his dismissal.
As in the foregoing cases, herein respondent deserves compassion and humane
understanding more than condemnation, especially considering that he had
been in petitioner's employ for nineteen (19) years already, and this is the first
time that he had been involved in taking company property, which item, at the
end of the day, is practically of no value. Besides, respondent did not occupy a
position of trust and confidence, the loss of which would have justified his
dismissal over the incident. As packhouse operator, respondent's duties are
limited to ensuring the safe and efficient operation of rotopackers, auto-bag
placers, and cariramats, as well as their auxiliaries.69 He is not a managerial
employee vested with the powers or prerogatives to lay down management
policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees or effectively recommend such managerial actions, or
one who, in the normal and routine exercise of his functions, regularly
handles significant amounts of money or property. 70chanrobleslaw
Neither can respondent's infraction be characterized as a serious misconduct
which, under Article 282 (now Article 297) of the Labor Code,71 is a just
cause for dismissal. Misconduct is an improper or wrong conduct, or a
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 in judgment.72To constitute a valid cause for dismissal within the
text and meaning of Article 282 (now Article 297) of the Labor Code, the
employee's misconduct must be serious, i.e., of such grave and aggravated
character and not merely trivial or unimportant,73 as in this case where the
item which respondent tried to takeout was practically of no value to
petitioner. Moreover, ill will or wrongful intent cannot be ascribed to
respondent, considering that, while he asked Castillo not to report the incident
to the management, he also volunteered the information that he had a piece of
scrap wire in his bag and offered to return it if the same could not possibly be
brought outside the company premises sans a gate pass.
The Court is not unaware of its ruling in Reno Foods, Inc. v. Nagkakaisang
Lakas ng Manggagawa (NLM) KATIPUNAN,74 which was cited in the
petition,75 where an employee was dismissed after being caught hiding six (6)
Reno canned goods wrapped in nylon leggings inside her bag. However, in
that case, the main issue was the payment of separation pay and/or financial
assistance and not the validity of the employee's dismissal. Furthermore,
unlike the present case where respondent tried to take a piece of scrap wire,
the employee in Reno Foods tried to steal items manufactured and sold by the
company. Her wrongful intent is also evident as she tried to hide the canned
goods by wrapping them in nylon leggings. Here, as earlier adverted to,
respondent volunteered the information that he had a piece of scrap wire in his
bag.
In fine, the dismissal imposed on respondent as penalty for his attempt to take
a piece of scrap wire is unduly harsh and excessive. The CA therefore did not
err in affirming the NLRC's ruling finding respondent's dismissal to be
invalid. Clearly, the punishment meted against an errant employee should be
commensurate with the offense committed.76 Thus, care should be exercised
by employers in imposing dismissal to erring employees.77 Based on the
circumstances of this case, respondent's dismissal was not justified. This
notwithstanding, the disposition of the CA should be modified with respect to
the consequential award of "separation pay in lieu of reinstatement," which
was assailed in the instant petition as one which has "no factual, legal or even
equitable basis."78chanrobleslaw
As a general rule, an illegally dismissed employee is entitled to: (a)
reinstatement (or separation pay, if reinstatement is not viable); and (b)
payment of full backwages.79chanrobleslaw
In this case, the Court cannot sustain the award of separation pay in lieu of
respondent's reinstatement on the bare allegation of the existence of "strained
relations" between him and the petitioner. It is settled that the doctrine on
"strained relations" cannot be applied indiscriminately since every labor
dispute almost invariably results in "strained relations;" otherwise,
reinstatement can never be possible simply because some hostility is
engendered between the parties as a result of their disagreement.80 It is
imperative, therefore, that strained relations be demonstrated as a fact and
adequately supported by substantial evidence showing that the relationship
between the employer and the employee is indeed strained as a necessary
consequence of the judicial controversy.81chanrobleslaw
Unfortunately, the Court failed to find the factual basis for the award of
separation pay to herein respondent. The NLRC Decision did not state the
facts which demonstrate that reinstatement is no longer a feasible option that
could have justified the alternative relief of granting separation pay.82Hence,
reinstatement cannot be barred, especially, as in this case, when the employee
has not indicated an aversion to returning to work, or does not occupy a
position of trust and confidence in, or has no say in the operation of the
employer's business.83 As priorly stated, respondent had expressed remorse
over the incident and had asked to be given the chance to correct his mistake.
He had also prayed for a lower penalty than dismissal, especially considering
his lack of intent to steal, and his unblemished record of 19 years of
employment with petitioner. All these clearly indicate his willingness to
continue in the employ of petitioner and to redeem himself. Considering
further that respondent did not occupy a position of trust and confidence and
that his taking of the scrap wire did not relate to the performance of his work
as packhouse operator, his reinstatement remains a viable remedy. The award
of separation pay, therefore, being a mere exception to the rule, finds no
application herein. Accordingly, he should be reinstated to his former position.
Meanwhile, anent the propriety of awarding backwages, the Court observes
that respondent's transgression even if not deserving of the ultimate penalty
of dismissal warrants the denial of the said award following the parameters
in Integrated Microelectronics, Inc. v. Pionilla.84 In that case, the Court
ordered the reinstatement of the employee without backwages on account of
the following: (a) the fact that the dismissal of the employee would be too
harsh a penalty; and (b) that the employer was in good faith in terminating the
employee, viz. :
The aforesaid exception was recently applied in the case of Pepsi-Cola
Products, Phils., Inc. v. Molon[(704 Phil. 120, 144-145 [2013 ]), wherein the
Court, citing several precedents, held as follows:
An illegally dismissed employee is entitled to either reinstatement, if viable,
or separation pay[,] if reinstatement is no longer viable, and backwages. In
certain cases, however, the Court has ordered the reinstatement of the
employee without backwages[,] considering the fact that: (1) the dismissal of
the employee would be too harsh a penalty; and (2) the employer was in good
faith in terminating the employee. For instance, in the case of Cruz v. Minister
of Labor and Employment [(205 Phil. 14, 18-19 [1983 ]), the Court ruled as
follows:
The Court is convinced that petitioner's guilt was substantially established.
Nevertheless, we agree with respondent Minister's order of reinstating
petitioner without backwages instead of dismissal which may be too drastic.
Denial of backwages would sufficiently penalize her for her
infractions. The bank officials acted in good faith. They should be exempt
from the burden of paying backwages. The good faith of the employer,
when clear under the circumstances, may preclude or diminish recovery
of backwages. Only employees discriminately dismissed are entitled to
backpay.
Likewise, in the case of Ilogon-Suyoc Mines, Inc. v. [NLRC] [(202 Phil. 850,
856 [1982 ]), the Court pronounced that "the ends of social and compassionate
justice would therefore be served if private respondent is reinstated but
without backwages in view of petitioner's good faith."
The factual similarity of these cases to Remandaban's situation deems it
appropriate to render the same disposition.85 (Emphases supplied)
Having established that respondent's dismissal was too harsh a penalty for
attempting to take a piece of scrap wire that was already for disposal and,
hence, practically of no value, and considering that petitioner was in good
faith when it dismissed respondent for his misconduct, the Court deems it
proper to order the reinstatement of respondent to his former position but
without backwages. Respondent was not entirely faultless and therefore,
should not profit from a wrongdoing.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated

February 13, 2015 and the Resolution dated September 7, 2015 of the Court of
Appeals in CA-G.R. SP No. 136413 are
hereby AFFIRMED with MODIFICATION deleting the award of
separation pay and in lieu thereof, directing the reinstatement of respondent
Renante J. Obra to his former position without backwages.

SO ORDERED.chanRoble
NORTHWEST AIRLINES, INC., Petitioner, v. MA. CONCEPCION M.
DEL ROSARIO, Respondent.
DECISION
BERSAMIN, J.:
Under review is the decision promulgated on June 21, 2002,1 whereby the
Court of Appeals (CA) dismissed the petition for certiorari filed by Northwest
Airlines, Inc. to assail on the ground of grave abuse of discretion amounting to
lack or excess of jurisdiction the adverse decision of the National Labor
Relations Commission (NLRC).
Antecedents
Petitioner Northwest Airlines, Inc. employed respondent Ma. Concepcion M.
Del Rosario on December 10, 1994 as one of its Manila-based flight
attendants. On May 18, 1998, Del Rosario was assigned at the Business Class
Section of Northwest Flight NW 26 bound for Japan. During the boarding
preparations, Kathleen Gamboa, another flight attendant assigned at the First
Class Section of Flight NW 26, needed to borrow a wine bottle opener from
her fellow attendants because her wine bottle opener was dull. Vivien
Francisco, Gamboas runner, went to the Business Class Section to borrow a
wine bottle opener from Del Rosario, but the latter remarked that any flight
attendant who could not bring a wine bottle opener had no business working
in the First Class Section. Upon hearing this, Aliza Ann Escao, another flight
attendant, offered her wine bottle opener to Francisco. Apparently, Gamboa
overheard Del Rosarios remarks, and later on verbally confronted her. Their
confrontation escalated into a heated argument. Escao intervened but the two
ignored her, prompting her to rush outside the aircraft to get Maria Rosario D.
Morales, the Assistant Base Manager, to pacify them.
The parties differed on what happened thereafter. Del Rosario claimed that
only an animated discussion had transpired between her and Gamboa, but
Morales insisted that it was more than an animated discussion, recalling that
Del Rosario had even challenged Gamboa to a brawl (sabunutan). Morales
asserted that she had tried to pacify Del Rosario and Gamboa, but the two did
not stop; that because the two were still arguing although the Business Class
passengers were already boarding, she ordered them out of the plane and
transfer to another nearby Northwest aircraft; that she inquired from them
about what had happened, and even asked if they were willing to fly on the
condition that they would have to stay away from each other during the entire
flight; that because Del Rosario was not willing to commit herself to do so,
she decided not to allow both of them on Flight NW 26, and furnished them a
Notice of Removal from Service (effectively informing Del Rosario of her
dismissal from the service pending an investigation of the fighting incident
between her and Gamboa).
On May 19, 1998, Morales sent a letter to Del Rosario telling her that
Northwest would conduct an investigation of the incident involving her and
Gamboa. The investigation was held on May 28, 1998 before Atty. Ceazar
Veneracion III, Northwests Legal Counsel and Head of its Human Resources
Department. All the parties attended the investigation
On June 19, 1998, Del Rosario was informed of her termination from the
service. Northwest stated that based on the results of the investigation, Del
Rosario and Gamboa had engaged in a fight on board the aircraft, even if there
had been no actual physical contact between them; and that because fighting
was strictly prohibited by Northwest to the point that fighting could entail
dismissal from the service even if committed for the first time, Northwest
considered her dismissal from the service justified and in accordance with the
Rules of Conduct for Employees, as follows:chanRoblesvirtualLawlibrary
Section 1, General
x x x. Rule infractions will be dealt with according to the seriousness of the
offense and violators will be subjected to appropriate disciplinary action up to
and including discharge. Some acts of misconduct, even if committed for the
first time, are so serious that, standing alone, they justify immediate
discharge. Some examples of these offenses are violations of rules regarding
theft, alcohol and drugs, insubordination, dishonesty, fighting, falsification of
records, sleeping on the job, failure to cooperate or lying in a Company
investigation, intentional destruction or abuse of property, threatening,
intimidating or interfering with other employees, abuse of nonrevenue and
reduced rate travel privileges and unauthorized use of Company
communications systems.
xxxx
Section 24 (c), Disturbing Others, which states that:
Harassing, threatening, intimidating, assaulting, fighting or provoking a fight
or similar interference with other employees at any time, on or off duty is
prohibited. (Italics supplied)
Del Rosario subsequently filed her complaint for illegal dismissal against
Northwest.2cralawlawlibrary
Decision of the Labor Arbiter
In her decision dated January 18, 1999,3 Labor Arbiter Teresita D. Castillon-
Lora ruled in favor of Northwest, holding that the dismissal of Del Rosario
had been justified and valid upon taking into account that Northwest had been
engaged in the airline business in which a good public image had been
demanded, and in which flight attendants had been expected to maintain an
image of sweetness and amiability; that fighting among its employees even in
the form of heated arguments or discussions were very contradictory to that
expected image;4 and that it could validly dismiss its employees like the
respondent because it had been entitled to protect its business interests by
putting up an impeccable image to the public.
Ruling of the NLRC
Upon appeal, the NLRC reversed the decision of the Labor Arbiter, and ruled
in favor of Del Rosario, declaring that the incident between her and Gamboa
could not be considered as synonymous with fighting as the activity prohibited
by Northwests Rules of Conduct; that based on Blacks Law
Dictionary, fight referred to a hostile encounter, affray, or altercation; a
physical or verbal struggle for victory, pugilistic combat; that according to
Bouviers Law Dictionary, fighting did not necessarily imply that both parties
should exchange blows, for it was sufficient that they voluntarily put their
bodies in position with that intent;5 and that the incident between Del Rosario
and Gamboa could not be held similar to the fight that Northwest penalized
under its Rules of Conduct.
The NLRC further ratiocinated as follows:chanRoblesvirtualLawlibrary
Evident in the definition of fighting is the existence of an underlying hostility
between the parties which is so intense that there is an imminent danger of a
physical conflict (if there is none yet). In other words, when we say two
people are fighting, at the very least, they should project a general appearance
of wanting to physically strike each other. Was this the image that appellant
and FA Gamboa projected when they were facing each other during the
incident of May 18, 1998[?] We do not think so.
x x x Almost unanimously, the witnesses of NWA refer to the incident as
arguing or a serious or animated discussion. An argument is an effort to
establish belief by a course of reasoning (Bouvier's Law Dictionary). In
ordinary parlance, arguing is merely talking or debating about a certain issue.
There are no underpinnings of animosity in the discussion nor (sic) between
the parties. These witnesses never saw any hostility between the appellant and
FA Gamboa. Neither did they see these two ladies wanting to strike each
other. What they saw were two FAs engaged in an animated verbal exchange,
arguing but not fighting.6chanrobleslaw

The NLRC ordered the reinstatement of Del Rosario to her former position
without loss of seniority rights and with payment of backwages, per diems,
other lost income and benefits from June 19, 1998; as well as the payment of
attorneys fees equivalent to 10% of the monetary award.
Decision of the CA
Aggrieved, Northwest elevated the adverse decision of the NLRC to the CA
on certiorari, averring that the NLRC thereby committed grave abuse of
discretion in reversing the decision of the Labor Arbiter, and submitting that
Del Rosarios dismissal from the service had been for a just cause, with the
evidence presented against her being more than sufficient to substantiate its
position that there had really been a fight between her and Gamboa; and that
the NLRC likewise gravely abused its discretion in ordering the reinstatement
of Del Rosario and the payment of her backwages and attorneys fees.
As stated, the CA sustained the NLRC through its decision promulgated on
June 21, 2002, observing that Northwest did not discharge its burden to prove
not merely reversible error but grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the NLRC; and that, indeed, the NLRC
had correctly held that Del Rosarios conduct did not constitute serious
misconduct, because the NLRC, in determining the usual, ordinary and
commonly understood meaning of the word fighting, had resorted to
authoritative lexicons that supported its conclusion that the exchange of words
between Del Rosario and Gamboa did not come within the definition of the
word fighting. 7cralawlawlibrary
The CA disposed thusly:chanRoblesvirtualLawlibrary
WHEREFORE, for lack of merit, the instant petition
is DISMISSED. Accordingly, the decision of the NLRC dated January 11,
2000, is hereby AFFIRMED with the MODIFICATION that in lieu of
reinstatement, petitioner is ordered to pay private respondent separation pay
equivalent to one month's salary for every year of service plus full backwages
without deduction or qualification, counted from the date of dismissal until
finality of this decision including other benefits to which she is entitled under
the law. Petitioner is likewise ordered to pay respondent Del Rosario
attorneys fees consisting of five (5%) per cent of the adjudged relief.
SO ORDERED. 8
Issues
The issues are the following, namely: (1) Was Del Rosarios dismissal from
the service valid?; and (2) Were the monetary awards appropriate?
Ruling
The Court AFFIRMS the decision of the CA.
As provided in Article 282 of the Labor Code, an employer may terminate an
employee for a just cause, to wit:chanRoblesvirtualLawlibrary
Art. 282. TERMINATION BY EMPLOYER
An employer may terminate an employee for any of the following
causes:chanRoblesvirtualLawlibrary
(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.
Northwest argues that Del Rosario was dismissed on the grounds of serious
misconduct and willful disobedience. Misconduct refers to the improper or
wrong conduct that transgresses 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 in judgment. But misconduct or improper behavior,
to be a just cause for termination of employment, must: (a) be serious; (b)
relate to the performance of the employees duties; and (c) show that the
employee has become unfit to continue working for the
employer.9cralawlawlibrary
There is no doubt that the last two elements of misconduct were present in the
case of Del Rosario. The cause of her dismissal related to the performance of
her duties as a flight attendant, and she became unfit to continue working for
Northwest. Remaining to be determined is, therefore, whether the misconduct
was serious as to merit Del Rosarios dismissal. In that respect,
the fight between her and Gamboa should be so serious that it entailed the
termination of her employment even if it was her first offense. Northwest
insists that what transpired on May 18, 1998 between her and Gamboa was
obviously a form of fight that it strictly prohibited, but Del Rosario disputes
this by contending that it was only an animated discussion between her and
Gamboa. She argues that as settled in American jurisprudence fight pertained
to combat or battle, like the hostile encounter or engagement between
opposing forces, suggesting primarily the notion of a brawl or unpremeditated
encounter, or of a pugilistic combat;10 while argument was a connected
discourse based upon reason, or a course of reasoning tending and intended to
establish a position and to induce belief.11cralawlawlibrary
In several rulings where the meaning of fight was decisive, the Court has
observed that the term fight was considered to be different from the term
argument. In People v. Asto,12 for instance, the Court characterized fight as not
just a merely verbal tussle but a physical combat between two opposing
parties, to wit:chanRoblesvirtualLawlibrary
Well into their second bottle of gin, at about eleven o'clock that morning,
Fernando Aquino and Peregrino had a verbal tussle. Fernando Aquino
declared that he was going to run for councilor of Alcala, Pangasinan.
Peregrino countered by saying: If you will run for that post, cousin, I
will fight you. After a brief exchange of words, Fernando Aquino, laughing,
went to sit beside Abagat. As Aquino continued with his mirth, Abagat stared
at Peregrino with contempt.
xxx. A few minutes later, he heard a commotion in the plantation some two
hundred meters away. He claims to have seen several people fighting each
other with pieces of wood but did not go to the field to check what was
happening.13 (Italics supplied.)
Similarly, in Pilares, Sr. v. People,14fight was held to be more than just an
exchange of words that usually succeeded the provocation by either party,
thus:chanRoblesvirtualLawlibrary
When the petitioner was about to hand over the bottles of beer to the private
complainant, the latter called him coward and dared him to get out for
a fight. Insulted, the petitioner went out of his store and chased the private
complainant. (Italics supplied.)
Based on the foregoing, the incident involving Del Rosario and Gamboa could
not be justly considered as akin to the fight contemplated by Northwest. In the
eyes of the NLRC, Del Rosario and Gamboa were arguing but not fighting.
The understanding of fight as one that required physical combat was absent WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals
during the incident of May 18, 1998. Moreover, the claim of Morales that Del promulgated on June 21, 2002; and ORDERS the petitioner to pay the costs
Rosario challenged Gamboa to a brawl (sabunutan) could not be given of suit.
credence by virtue of its being self-serving in favor of Northwest, and of its
being an apparent afterthought on the part of Morales during the investigation SO ORDERED.cralawre
of the incident, without Del Rosario having the opportunity to contest
Morales statement. In that context, the investigation then served only as
Northwests means to establish that the grounds of a valid dismissal based on
serious misconduct really existed.

Moreover, even assuming arguendo that the incident was the kind
of fight prohibited by Northwests Rules of Conduct, the same could not be
considered as of such seriousness as to warrant Del Rosarios dismissal from
the service. The gravity of the fight, which was not more than a verbal
argument between them, was not enough to tarnish or diminish Northwests
public image.

Under the circumstances, therefore, the CA properly ruled that the NLRC did
not gravely abuse its discretion amounting to lack or excess of jurisdiction by
declaring Del Rosarios dismissal unjustified. Northwest as the petitioner
for certiorari must demonstrate grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the NLRC. Grave abuse of
discretion, according to De los Santos v. Metropolitan Bank and Trust
Company,15 must be grave, which means either that the judicial or quasi-
judicial power was exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, or that the respondent judge, tribunal or board
evaded a positive duty, or virtually refused to perform the duty enjoined or to
act in contemplation of law, such as when such judge, tribunal or board
exercising judicial or quasi-judicial powers acted in a capricious or whimsical
manner as to be equivalent to lack of jurisdiction. Alas, Northwest did not
show how the NLRC could have abused its discretion, let alone gravely, in
ruling adversely against it.
G.R. No. 215047, November 23, 2016
UNIVERSAL CANNING INC., MS. MA. LOURDES A. LOSARIA,
PERSONNEL OFFICER, AND ENGR. ROGELIO A. DESOSA, PLANT
MANAGER, Petitioners, v. COURT OF APPEALS AND DANTE
SAROSAL, FRANCISCO DUMAGAL, JR., NELSON E. FRANCISCO,
ELMER C. SAROMINES AND SAMUEL D. CORONEL, Respondents.
DECISION
PEREZ, J.:
For resolution by the Court is this instant Petition for Review
on Certiorari1 filed by petitioners Universal Canning Inc., Ma. Lourdes
Losaria and Engr. Rogelio A. Desosa, seeking to reverse and set aside the
Decision2 dated 13 December 2013 and the Resolution3 dated 9 September
2014 of the Court of Appeals in CA-G.R. SP. No. 03808-MIN. The assailed
decision and resolution reversed the ruling of the National Labor Relations
Commission (NLRC) in NLRC Case No. MAC-09-011031-2009 and declared
the dismissal of respondents Dante M. Sarosal, Francisco Dumagal. Jr.,
Nelson E. Francisco, Elmer C. Saromines and Samuel D. Coronel, as
illegal.chanroblesvirtuallawlibrary
The Facts
Petitioner Universal Canning Inc. is a domestic corporation duly authorized to
engage in business by Philippine laws. Petitioners Ma. Lourdes A. Losaria and
Engr. Rogelio Desosa are respectively employed by the company as its
Personnel Officer and Plant Manager.4
Respondents Dante M. Sarosal, Francisco Dumagal. Jr., Nelson E. Francisco,
Elmer C. Saromines and Samuel D. Coronel were employed by petitioner
Universal Canning on various capacities with wages ranging from P240.00 to
P280.00 a day.5
On 21 January 2009, respondents were caught by petitioner company's
Purchasing Officer, Falconieri Almazan, playing cards at the company's
premises during working hours. The incident was immediately reported by
Almazan to the Personnel Officer, Ma. Lourdes Losaria, who immediately
conducted an investigation to determine the names and of those who were
involved in the gambling activities. On the same day, respondents were placed
under preventive investigation pending further investigation by a panel
indicated in a memorandum addressed to and duly received by the individuals
concerned. Under the same memorandum, respondents were required by the
petitioner to file their written explanation of the incident. Respondents
complied with the directive.6
In their letter-explanation dated 23 January 2009, respondents denied that they
were involved in gambling activities within the company's premises during
work hours. It was argued by the respondents that while indeed they were
playing cards inside the company premises, it cannot be considered gambling
as there was no money involved and that it took place during noon break.7
On 9 February 2009, the investigation was conducted where respondents were
questioned regarding their participation in the 21 January 2009 activities
inside the company's premises. After the inquiry, the Investigating Officer
found that respondents were playing cards during working hours which is
considered an infraction of the company's rules and regulations.8
On the basis of the Investigation Report, respondents were dismissed from
employment through a notice thereof dated 19 February 2016 which
enumerated the grounds: (1) taking part in a betting, gambling or any
unauthorized game of chance inside the company premises while on duty; and
(2) for loss of trust and confidence. The termination of respondents was
reported by the petitioner to the Department of Labor of Employment (DOLE)
on 24 February 2009.
Aggrieved by the tum of events, respondents initiated an action for illegal
dismissal, illegal suspension, payment of separation pay, rest day pay and
moral and exemplary damages before the Labor Arbiter. In their Position
Paper, respondents argued that their severance from employment is unlawful
because of lack of sufficient basis for their termination. They reiterated their
position in their letter-explanation that they could not be considered guilty of
gambling because there were no stakes involved and the activity took place
during authorized noon break.
For lack of merit, the Labor Arbiter dismissed the complaint in a
Decision9 dated 24 August 2009. The Labor Arbiter held that respondents
were dismissed for just cause and after compliance with due process. The
dispositive portion of the Decision reads:chanRoblesvirtualLawlibrary
WHEREFORE, the above-entitled case is hereby dismissed for lack of merit.
SO ORDERED.10
On appeal, the NLRC affirmed the dismissal of respondents' complaint. It was
declared by the Commission that "playing cards during office hours whether
for a stake or fun is considered a dishonest act of stealing company time. The
company's working hours could be used for more profitable activities since
they are paid by the company." Setting aside the claim of respondents that
their length of service should be considered a mitigating circumstance, the
NLRC held that "the fact that [respondents] have been employed by the
company for a long period of time could not work in their favor. Their attitude
towards their work is smocked (sic) with disloyalty, lack of concern and
enthusiasm."11
On Certiorari, the Court of Appeals reversed and set aside the NLRC
Decision on the ground that it was rendered with grave abuse of discretion
amounting to lack or excess in jurisdiction. According to the appellate court,
there exists no just cause to dismiss respondents from employment. As rank
and file employees, respondents could not be dismissed for lack of trust and
confidence as they were not holding positions imbued with trust and
confidence.12 The Court of Appeals disposed in this
wise:chanRoblesvirtualLawlibrary
THE FOREGOING CONSIDERED, the instant PETITION is thus
GRANTED. The NLRC's Resolution dated December 29, 2009 and June 29,
2010 are hereby REVERSED AND SET ASIDE, and a new entered
mandating UCI to:
1. Pay each [respondents] their respective full backwages, inclusive of
allowances and other benefits required by law or their monetary
equivalent computed from the time they were actually dismissed
effective February 20, 2009 until the finality of this decision; and
2. To reinstate [respondents] without loss of seniority rights and other
privileges, or if reinstatement is not possible, to pay each of the
petitioners their respective separation pay equivalent to one month to
every year of service, computed from the date of employment up to the
finality of the decision. A fraction of at least six (6) months shall be
considered one (1) whole year. Any fraction below six (6) months
shall be paid pro rata.
SO ORDERED.
In a Resolution13 dated 9 September 2014, the Court of Appeals refused to
reconsider its earlier Decision.
Petitioners are now before this Court via this instant Petition for Review
on Certiorari assailing the Courts of Appeals' Decision and Resolution on the
ground that:chanRoblesvirtualLawlibrary
The Issue
THE COURT OF APPEALS ERRED IN REVERSING AND SETTING
ASIDE THE NLRC DECISION WHICH IN TURN, AFFIRMED THE
LABOR ARBITER'S DECISION DISMISSING RESPONDENTS'
COMPLAINT FOR ILLEGAL DISMISSAL FOR LACK OF MERIT.
The Court's Ruling
The core issue here is whether the Court of Appeals erred in holding that there
is no just cause for dismissing respondents from employment.
The Court resolves to grant the petition.
It must be stressed at the onset that respondents were dismissed by petitioners
for two reasons: (1) for violation of company rules and regulations under
Paragraph IV, Number 4 under Offenses Against Public Morals;14 and (2) for
loss of trust and confidence. While it is true that loss of trust and confidence
alone could not stand as a ground for dismissal in this case since respondents
are rank and file employees who are not occupying positions of trust and
confidence, such is not the only ground, relied by the company in terminating
respondents' employment. Petitioner company also cited the infraction of
company rules and regulations, in addition to loss and trust of confidence.
Infraction of the company rules and regulation which is akin to serious
misconduct is a just cause for termination of employment recognized under
Article 282 (a) of the Labor Code which states
that:chanRoblesvirtualLawlibrary
ARTICLE 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;
Misconduct is defined as an improper or wrong conduct. It is a 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 in
judgment. To constitute a valid cause for the dismissal within the text and
meaning of Article 282 of the Labor Code, the employee's misconduct must
be serious, i.e., of such grave and aggravated character and not merely trivial
or unimportant. Additionally, the misconduct must be related to the
performance of the employee's duties showing him to be unfit to continue
working for the employer. Further, and equally important and required, the act
or conduct must have been performed with wrongful intent.15
Here, there is no question that respondents were caught in the act of engaging
in gambling activities inside the workplace during work hours, a fact duly
established during the investigation conducted by the petitioner company and
adopted by the labor tribunals below. As a matter of fact, respondents never
controverted their participation in the gambling activities, but instead raised
the defense that it took place during noon break and that no stakes were
involved; these claims even if were proven true, will however not save the day
for the respondents. The use of the company's time and premises for gambling
activities is a grave offense which warrants the penalty of dismissal for it
amounts to theft of the company's time and it is explicitly prohibited by the
company rules on the ground that it is against public morals.
Suffice it to state that an employee may be validly dismissed for violation of a
reasonable company rule or regulation adopted for the conduct of the
company's business. It is the recognized prerogative of the employer to
transfer and reassign employees according to the requirements of its business.
For indeed, regulation of manpower by the company clearly falls within the
ambit of management prerogative. A valid exercise of management
prerogative is one which, among others, covers: work assignment, working
methods, time, supervision of workers, transfer of employees, work
supervision, and the discipline, dismissal and recall of workers. Except as
provided for, or limited by special laws, an employer is free to regulate,
according to his own discretion and judgment, all aspects of employment.16 As
a general proposition, an employer has free reign over every aspect of its
business, including the dismissal of his employees as long as the exercise of
its management prerogative is done reasonably, in good faith, and in a manner
not otherwise intended to defeat or circumvent the rights of workers.17

Both the Labor Arbiter and the NLRC uniformly ruled that the complaint for
illegal dismissal filed by the respondents utterly lacks merit and, thus, upheld
the petitioners' position that there exists a valid ground for dismissing the
respondents. The NLRC even went further by saying that respondents' length
of service should not mitigate the consequence of their acts as they owe the
company loyalty and concern. Considering that there is substantial evidence at
hand to support the ruling of the labor tribunals, the Court hereby adopts their
findings.

It is settled that this Court is not a trier of facts, and this applies with greater
force in labor cases.18Factual findings of administrative or quasi-judicial
bodies, including labor tribunals, are accorded much respect by this Court as
they are specialized to rule on matters falling within their jurisdiction
especially when these are supported by substantial evidence.19

WHEREFORE, premises considered, the petition is GRANTED. The

assailed Resolutions of the Court of Appeals are hereby REVERSED AND
SET ASIDE.

SO ORDERED.
STELLAR INDUSTRIAL SERVICES, INC., petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and ROBERTO H.
PEPITO, respondents.
DECISION
REGALADO, J.:
Imputing grave abuse of discretion by public respondent as its cause of
concern in this special civil action for certiorari, petitioner Stellar Industrial
Services, Inc. (Stellar) seeks the annulment of the decision,1 dated May 31,
1994, of the National Labor Relations Commission in NLRC NCR CA No.
004326-93 and its resolution of July 21, 1994 denying petitioners motion for
reconsideration. Interestingly, this recourse is the culmination of petitioners
sustained corporate and legal efforts directed against a mere janitor who was
formerly employed by it.
Stellar Industrial Services, Inc., an independent contractor engaged in the
business of providing manpower services, employed private respondent
Roberto H. Pepito as a janitor on January 27, 1975 and assigned the latter to
work as such at the Maintenance Base Complex of the Philippine Airlines
(MBC-PAL) in Pasay City. There, Pepito toiled for a decade and a half.
According to petitioner, private respondents years of service at MBC-PAL
were marred by various infractions of company rules ranging from tardiness to
gambling, but he was nevertheless retained as a janitor out of humanitarian
consideration and to afford him an opportunity to reform.2
Stellar finally terminated private respondents services on January 22,
1991 because of what it termed as Pepitos being Absent Without Official
Leave (AWOL)/Virtual Abandonment of Work -Absent from November 2
- December 10, 1990. Private respondent had insisted in a letter to petitioner
dated December 2, 1990, to which was attached what purported to be a
medical certificate, that during the period in question he was unable to report
for work due to severe stomach pain and that, as he could hardly walk by
reason thereof, he failed to file the corresponding official leave of absence.3
As petitioner disbelieved private respondents explanation regarding his
absences, the latter contested his severance from employment before the
Arbitration Branch of the National Labor Relations Commission (NLRC)
in Manila in a complaint docketed as NLRC NCR-00-03-01869-91 for illegal
dismissal, illegal deduction and underpayment of wages under Wage Order
NCR-001, with prayer for moral and exemplary damages and attorneys fees.
While the labor arbiter was of the view that Pepito was not entitled to
differential pay under said wage Order, or to moral and exemplary damages
for lack of bad faith on the part of petitioner, he opined that private respondent
had duly proved that his 39-day absence was justified on account of illness
and that he was illegally dismissed without just cause.4
Thus the decision rendered on December 28, 1992 by Labor Arbiter Manuel
R. Caday decreed:
WHEREFORE, judgment is hereby rendered declaring the dismissal of the
complainant as illegal and ordering the respondent to immediately reinstate
complainant to his former position as Utilityman, without loss of seniority
rights and with full backwages and other rights and privileges appurtenant to
his position until he is actually reinstated. As computed, the judgment award
in favor of the complainant is stated hereunder:
Backwages
1/27/91 - 12/27/92
at P118. 00 per day P82,550.83
Refund of amount
illegally deducted
(3 years) 288.00
Grand Total P82,838.83
The respondent is further ordered to pay the complainant reasonable attorneys
fees equivalent to 10% of the amount recoverable by the complainant.5
As hereinbefore stated, said judgment of the labor arbiter was affirmed by
respondent commission. Petitioners subsequent motion for reconsideration
was likewise rebuffed by the NLRC, hence the present remedial resort to this
Court.
Petitioner contends that public respondent acted with grave abuse of discretion
when it discussed and resolved the issue of abandonment which petitioner had
not, at any time, raised before it for resolution. Further, petitioner considers it
patently erroneous for public respondent to rule that the medical certificate
adduced by Pepito sufficiently established the fact of sickness on his part
which thereby justified his absences. Additionally, it claims that respondent
commission gravely erred when it did not carefully examine the evidence,
pointing out Pepitos errant behavior and conduct.6
Petitioner argues, moreover, that the award of back wages and attorneys fees
was not justified considering that Pepito was validly dismissed due to serious
misconduct on his part. Lastly, petitioner insists that the deductions it imposed
upon and collected from Pepitos salary was authorized by a board resolution
of Stellar Employees Association, of which private respondent was a
member.7 The Court, however, is unable to perceive or deduce facts
constitutive of grave abuse of discretion in public respondents disposition of
the controversy which would suffice to overturn its affirmance of the labor
arbiters decision.
On the initial issue posed by petitioner, respondent commission should indeed
have refrained from passing upon the matter of abandonment, much less from
considering the same as the ground for petitioners termination of private
respondents services. The records of the case indicate that Pepito s
employment was cut short by Stellar due to his having violated a company
rule which requires the filing of an official leave of absence should an
employee be unable to report for work, aside from the circumstance that
Stellar did not find credible Pepitos explanation that he was then suffering
from severe stomach and abdominal pains.
To be sure, public respondent may well have been misled by the fact that
petitioner, in dismissing Pepito, labelled his violation as Absent Without
Official Leave (AWOL)/Virtual Abandonment.8 Respondent NLRC should
have noted that the matter of abandonment was never brought up as an issue
before it and that Stellar never considered Pepito as having abandoned his job.
As a matter of fact, private respondent was only considered by petitioner as
absent until December 10, 1990.9 Pepito was dismissed from work simply for
going on leave without prior official approval and for failing to justify his
absence. This is evident from the fact that petitioner did not assail Pepitos
allegations that, at the start of his extended absence, he had informed Stellar,
through telephone calls to his superior at MBC-PAL, that he could not report
for work due to illness. Thus, while abandonment is indisputably a valid legal
ground for terminating ones employment,10 it was a non-issue in this dispute.
Be that as it may, that misapprehension of the NLRC on this particular issue is
not to be considered an abuse of discretion of such gravity as to constitute
reversible error.
In the main, therefore, what is truly at issue here is whether or not serious
misconduct for non-observance of company rules and regulations may be
attributed to Pepito and, if so, whether or not the extreme penalty of dismissal
meted to him by Stellar may be justified under the circumstances. We resolve
both issues in the negative.
Stellars company rules and regulations on the matter could not be any clearer,
to wit:
Absence Without Leave
Any employee who fails to report for work without any prior approval from
his superior(s) shall be considered absent without leave.
In the case of an illness or emergency for an absence of not more than one (1)
day, a telephone call or written note to the head office, during working hours,
on the day of his absence, shall be sufficient to avoid being penalized.
In the case of an illness or an emergency for an absence of two (2) days or
more, a telephone call to the head office, during regular working hours, on the
first day of his absence, or a written note to the head office, (ex. telegram)
within the first three (3) days of his absence, and the submission of the proper
documents (ex. medical certificate) on the first day he reports after his absence
shall be sufficient to avoid being penalized.
1st offense - three (3) days suspension
2nd offense - seven (7) days suspension
3rd offense - fifteen (15) days suspension
4th offense - dismissal (with a period of one (1) year. 11
There was substantial compliance with said company rule by private
respondent. He immediately informed his supervisor at MBC-PAL of the fact
that he could not report for work by reason of illness. At the hearing, it was
also established without contradiction that Pepito was able to talk by
telephone to one Tirso Pamplona, foreman at MBC-PAL, and he informed the
latter that he would be out for two weeks as he was not feeling well.12 Added
to this is his letter to the chief of personnel which states that, on November 2,
1990, he relayed to his supervisor at MBC-PAL his reason for not reporting
for work and that, thereafter, he made follow-up calls to their office when he
still could not render services.13 As earlier noted, these facts were never
questioned nor rebutted by petitioner.
While there is no record to show that approval was obtained by Pepito with
regard to his absences, the fact remains that he complied with the company
rule that in case of illness necessitating absence of two days or more, the
office should be informed beforehand about the same, that is, on the first day
of absence. Since the cause of his absence could not have been anticipated, to
require prior approval would be unreasonable. On this score, then, no serious
misconduct may be imputed to Pepito. Necessarily, his dismissal from work,
tainted as it is by lack of just cause, was clearly illegal.
More importantly, private respondent duly presented the requisite medical
certificate. True, Stellar did not accept the veracity of the same, but it did so
quite erroneously. Carlos P. Callanga, petitioners vice-president for
operations, interpreted the certificate submitted by Pepito in the following
strained and nitpicking manner:
a) The medical certificate merely states that Pepito suffered from alleged
abdominal pain from November 2, 1990 to December 14, 1990. It does not
state that the abdominal pain was so severe as to incapacitate him for (sic)
work.
b) Because the medical certificate states that the abdominal pain was merely
alleged, I had reason to believe that the doctor who issued it did not personally
know if such abdominal pain really existed for the period in question.
c) From the medical certificate, I gathered that the doctor who signed it
examined Pepito only on December 14, 1990, which is the date it appears to
have been issued. It does not state that said doctor actually treated Pepito for
the period of his absence.
d) The medical certificate also says Pepito was suffering from alleged
abdominal pains until December 14, 1990, but that he could resume work
anytime thereafter. This implies that he was physically fit to resume work
anytime thereafter. However, our records show that Pepito was absent only
until December 10, 1990. If it is true that Pepitos abdominal pains
incapacitated him for (sic) work, he should have been absent until December
14, 1990. These give me reason to believe that the medical certificate was
secured only as an afterthought and does not satisfactorily explain Pepito s
protracted absence.14
A careful perusal and objective appreciation of the medical certificate in
question, which was properly signed by a physician whose existence and
professional license number was not questioned by petitioner, convince us to
conclude otherwise. Handwritten by the issuing doctor, it states in no
uncertain terms:
This is to inform that I had examined Roberto Pepito. He has already
recovered from his intestinal abdominal pains suffered last Nov. 2/90 to Dec.
14/90.
He may resume his work anytime.15
Thus, nowhere in said certificate is there any indication that the abdominal
pain suffered by Pepito was only as alleged by him. It definitely states that
Pepito was personally examined by the physician and it can be clearly
deduced from the affirmative statements (h)e has already recovered x x x and
(h)e may resume his work anytime that Pepito was really not in a position to
report for work from November 2 to December 14, 1990 on account of actual,
and not merely alleged, intestinal abdominal pains. The certificate further
confirms Pepitos earlier information given by him on November 2, 1990 and
which he duly relayed to his supervisor as the true reason for his inability to
work. Callanga obviously misread, we hope unwittingly, intestinal abdominal
pain as alleged abdominal pain.
Again, there is no logic in Callangas assumption that the certificate was
obtained only as an afterthought. It should be noted that Callanga required
Pepito to make a written explanation regarding his absences only
on December 18, 1990.16 Pepito accordingly complied with the same and he
attached therewith the medical certificate which showed its date of issuance
as December 14, 1990.17 Thus, even before he was made to explain his
absences, he already had the medical certificate to prove the reason therefor.
To characterize the procurement of the certificate as an afterthought is
consequently baseless, especially considering that it bears all the earmarks of
regularity in its issuance. Labor is entitled to at least elementary fairness from
management.
Petitioners reliance on Pepitos past infractions as sufficient grounds for his
eventual dismissal, in addition to his prolonged absences, is likewise
unavailing. The correct rule is that previous infractions may be used as
justification for an employees dismissal from work in connection with a
subsequent similar offense.18 That is not the case here. Stellar contends that
Pepitos service record shows that he was under preventive suspension in
October, 1979 due to gambling and that, at various days of certain months in
1986, 1987, and 1988, he was issued several warnings for habitual tardiness.
Then, in October, 1988, he was asked to explain why he was carrying three
sacks of rice in violation of company rules.
In the present case, private respondents absences, as already discussed, were
incurred with due notice and compliance with company rules and he had not
thereby committed a similar offense as those he had committed in the past.
Furthermore, as correctly observed by the labor arbiter, those past infractions
had either been satisfactorily explained, not proven, sufficiently penalized or
condoned by the respondent. In fact, the termination notice furnished Pepito
only indicated that he was being dismissed due to his absences
from November 2, 1990 to December 10, 1990 supposedly without any
acceptable excuse therefor. There was no allusion therein that his dismissal
was due to his supposed unexplained absences on top of his past infractions of
company rules. To refer to those earlier violations as added grounds for
dismissing him is doubly unfair to private respondent. Significantly enough,
no document or any other piece of evidence was adduced by petitioner
showing previous absences of Pepito, whether with or without official leave.
Regarding the amount deducted from Pepitos salary, Stellar stresses that said
deduction concerning death aid benefits is lawful since these were made in
accordance with Board Resolution No. 02-85 adopted on August 17, 1988 by
the board of directors of the Stellar Employees Association. However, Article
24 1(n) of the Labor Code and the implementing rules thereon in Section
13(a), Rule VIII, Book III disallow such deductions. Article 241(n) states that
(n)o special assessment or other extraordinary fees may be levied upon the
members of a labor organization unless authorized by a written resolution of a
majority of all the members of a general membership meeting duly called for
the purpose. x x x.
The deduction could be characterized as a special assessment for a Death Aid
Program. Consequently, a mere board resolution of the directors, and not by
the majority of all the members, cannot validly allow such deduction. Also, a
written individual authorization duly signed by the employee concerned is a
condition sine qua non therefor. Employees are protected. by law from
unwarranted practices that have for their object the diminution of the hard-
earned compensation due them.19 Private respondent herein must be extended
that protection, especially in view of his lowly employment status.
IN VIEW OF THE FOREGOING, no grave abuse of discretion having been
committed by respondent National Labor Relations Commission in its
decision and resolution assailed in the case at bar, the instant petition of
Stellar Industrial Services, Inc. is hereby DISMISSED for lack of merit.
SO ORDERED.
HOCHENG PHILIPPINES CORPORATION, Petitioner, v. ANTONIO
M. FARRALES, Respondent.
DECISION
REYES, J.:
Before this Court on Petition for Review on Certiorari1 is the Decision2 dated
October 17, 2013 of the Court of Appeals (CA) in CA-G.R. SP No. 125103,
which reversed the Decision3 dated February 29, 2012 and Resolution4 dated
May 7, 2012 of the National Labor Relations Commission (NLRC) in NLRC
LAC No. 08-002249-11, and reinstated with modifications the Decision5 dated
April 29, 2011 of the Labor Arbiter (LA) in NLRC Case No. RAB-IV-03-
00618-10-C, which found that respondent Antonio M. Farrales (Farrales) was
illegally dismissed by Hocheng Philippines Corporation (HPC). The fallo of
the appellate decision reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Decision of the Labor Arbiter dated
April 29, 2011 in NLRC Case No. RAB-IV-03-00618-10-C is reinstated with
modifications. Private respondent Hocheng Philippines Corporation is liable
to pay [Farrales] the following:chanRoblesvirtualLawlibrary
(1) Full backwages from date of dismissal on February 15, 2010 until date of
decision equivalent to P276,466.67;
(2) Separation pay of one (1) month salary per year of service for a period of
twelve years equivalent to P228,800.00;
(3) Appraisal year-end bonus in the sum of P11,000.00; and,
(4) Attorneys fees equivalent to 10% of the total award.
SO ORDERED.6
The Facts
Farrales was first employed by HPC on May 12, 1998 as Production Operator,
followed by promotions as (1) Leadman in 2004, (2) Acting Assistant Unit
Chief in 2007, and (3) Assistant Unit Chief of Production in 2008, a
supervisory position with a monthly salary of ?17,600.00. He was a consistent
recipient of citations for outstanding performance, as well as appraisal and
year-end bonuses.7chanroblesvirtuallawlibrary
On December 2, 2009, a report reached HPC management that a motorcycle
helmet of an employee, Reymar Solas (Reymar), was stolen at the parking lot
within its premises on November 27, 2009. On December 3, 2009, Security
Officer Francisco Paragas III confirmed a video sequence recorded on closed-
circuit television (CCTV) around 3:00 p.m. on November 27, 2009 showing
Farrales taking the missing helmet from a parked motorcycle, to
wit:chanRoblesvirtualLawlibrary
a. At around 3:07:44, [Farrales] was seen walking towards the
motorcycle parking lot;chanrobleslaw
b. At around 3:08:47, [Farrales] walked back towards the pedestrian gate
of the company, passing by the motorcycle parking lot;chanrobleslaw
c. At around 3:08:51, [Farrales] walked back towards the motorcycle
parking lot and returned to the pedestrian gate;chanrobleslaw
d. At around 3:09:10, [Farrales] called on the person of Andy Lopega and
instructed him to get the helmet he was pointing at; [and]
e. At around 3:09:30, Andy gave the helmet to [Farrales].8
Later that day, HPC sent Farrales a notice to explain his involvement in the
alleged theft. The investigation was supported by the employees union, ULO-
Hocheng.9Below is Farrales explanation, as summarized by the
CA:chanRoblesvirtualLawlibrary
On November 27, 2009, [Farrales] borrowed a helmet from his co-worker Eric
Libutan (Eric) since they reside in the same barangay. They agreed that Eric
could get it at the house of [Farrales] or the latter could return it the next time
that they will see each other. Eric told him that his motorcycle was black in
color. As there were many motorcycles with helmets, he asked another
employee, Andy Lopega (Andy) who was in the parking area where he
could find Erics helmet. Andy handed over to him the supposed helmet which
he believed to be owned by Eric, then he went home.
On November 28, 2009, at around 6 oclock in the morning, he saw Eric at
their barangay and told him to get the helmet. But Eric was in a rush to go to
work, he did not bother to get it.
In the morning of December 3, 2009, upon seeing Eric in the workplace,
[Farrales] asked him why he did not get the helmet from his house. Eric told
him that, Hindi po sa akin yung nakuha nyong helmet. [Farrales] was
shocked and he immediately phoned the HPCs guard to report the situation
that he mistook the helmet which he thought belonged to Eric. After several
employees were asked as to the ownership of the helmet, he finally found the
owner thereof, which is Jun Reyess (Jun) nephew, Reymar, who was with
him on November 27, 2009. [Farrales] promptly apologized to Jun and
undertook to return the helmet the following day and explained that it was an
honest mistake. These all happened in the morning of December 3, 2009;
[Farrales] did not know yet that HPC will send a letter demanding him to
explain.10
A hearing was held on December 10, 2009 at 1:00 p.m. Present were Farrales,
Eric Libutan (Eric), Andy Lopega (Andy), Jun Reyes, Antonio Alinda, a
witness, and Rolando Garciso, representing ULO-Hocheng. From Andy it was
learned that at the time of the alleged incident, he was already seated on his
motorcycle and about to leave the company compound when Farrales
approached and asked him to hand to him a yellow helmet hanging from a
motorcycle parked next to him. When Andy hesitated, Farrales explained that
he owned it, and so Andy complied. But Eric had specifically told Farrales
that his helmet was colored red and black and his motorcycle was a black
Honda XRM-125 with plate number 8746-DI, parked near the perimeter fence
away from the walkway to the pedestrian gate. The CCTV showed Farrales
instructing Andy to fetch a yellow helmet from a blue Rossi 110 motorcycle
with plate number 3653-DN parked in the middle of the parking lot, opposite
the location given by Eric. Farrales in his defense claimed he could no longer
remember the details of what transpired that time, nor could he explain why
he missed Erics specific directions.11chanroblesvirtuallawlibrary
On February 15, 2010, the HPC issued a Notice of Termination12 to Farrales
dismissing him for violation of Article 69, Class A, Item No. 29 of the HPC
Code of Discipline, which provides that stealing from the company, its
employees and officials, or from its contractors, visitors or clients, is akin
to serious misconduct and fraud or willful breach by the employee of the
trust reposed in him by his employer or duly authorized representative,
which are just causes for termination of employment under Article 282 of the
Labor Code.
On March 25, 2010, Farrales filed a complaint for illegal dismissal, non-
payment of appraisal and mid-year bonuses, service incentive leave pay and
13th month pay. He also prayed for reinstatement, or in lieu thereof,
separation pay with full backwages, plus moral and exemplary damages and
attorneys fees. During the mandatory conference, HPC paid Farrales
?10,914.51, representing his 13th month pay for the period of January to
February 2010 and vacation leave/sick leave conversion. Farrales agreed to
waive his claim for incentive bonus.13chanroblesvirtuallawlibrary
On April 29, 2011, the LA ruled in favor of Farrales,14 the fallo of which is as
follows:chanRoblesvirtualLawlibrary
WHEREFORE, PREMISES CONSIDERED, all the respondents Hocheng
Phils. Corporation, Inc. Sam Chen[g] and Judy Geregale are found guilty of
illegal dismissal and ordered jointly and severally to pay complainant the
following:chanRoblesvirtualLawlibrary
1. Full backwages from date of dismissal on February 15, 2010 until date of
decision equivalent to P276,466.67.
2. Separation pay of one (1) month salary per year of service for a period of
twelve years equivalent to P228,800.00.
3. Appraisal year-end bonus in the sum of P11,000.00.
4. Moral damages in the sum of P200,000.00.
5. Exemplary damages in the sum of P100,000.00.
6. 10% of all sums owing as attorneys fees or the amount of P81,626.67.
SO ORDERED.15
On appeal by HPC,16 the NLRC reversed the LA,17 and denied Farrales
motion for reconsideration, finding substantial evidence of just cause to
terminate Farrales.18chanroblesvirtuallawlibrary
On petition for certiorari to the CA,19 Farrales sought to refute the NLRCs
factual finding that he committed theft, as well as to question NLRCs
jurisdiction over HPCs appeal for non-payment of appeal fees. But the CA
found that HPC was able to perfect its appeal by posting a bond equivalent to
the monetary award of ?897,893.37 and paying the appeal fees by postal
money order in the amount of ?520.00.20chanroblesvirtuallawlibrary
Concerning the substantive issues, the appellate court agreed with the LA that
Farrales act of taking Reymars helmet did not amount to theft, holding that
HPC failed to prove that Farrales conduct was induced by a perverse and
wrongful intent to gain, in light of the admission of Eric that he did let
Farrales borrow one of his two helmets, only that Farrales mistook Reymars
helmet as the one belonging to him.
Petition for Review to the Supreme Court
In this petition, HPC raises the following grounds for this Courts
review:chanRoblesvirtualLawlibrary
A. THE HONORABLE [CA] PLAINLY ERRED AND ACTED
CONTRARY TO EXISTING LAW AND JURISPRUDENCE IN
REVERSING THE DECISION OF THE [NLRC] AND DECLARING
ILLEGAL THE DISMISSAL FOR [HPCs] ALLEGED FAILURE
TO PROVE THE EXISTENCE OF JUST CAUSE.
1. THERE IS SUBSTANTIAL EVIDENCE TO SHOW THAT [FARRALES]
COMMITTED THEFT IN [HPCs] PREMISES.
2. THEFT IS A JUST CAUSE FOR TERMINATION.
3. BY COMMITTING THEFT, [FARRALES], BEING A SUPERVISORIAL
EMPLOYEE, FORFEITED THE TRUST REPOSED IN HIM BY [HPC],
THUS RENDERING HIM DISMISSIBLE FOR LOSS OF CONFIDENCE.
B. IN DECLARING ILLEGAL THE DISMISSAL OF [FARRALES],
THE HONORABLE [CA] VIOLATED DOCTRINES LAID DOWN
BY THE SUPREME COURT.
1. COURTS CANNOT SUBSTITUTE THEIR JUDGMENT FOR THAT OF
THE MANAGEMENT.
2. COURTS MUST ACCORD DUE RESPECT TO THE FINDINGS OF
ADMINISTRATIVE AGENCIES.21
Chiefly, HPC insists that since the complaint below involves an administrative
case, only substantial evidence, not proof of guilt beyond reasonable doubt, is
required to prove the guilt of Farrales;22 that what the CA has done is
substitute its judgment for that of the NLRC, which is vested with statutory
duty to make factual determinations based on the evidence on
record.23chanroblesvirtuallawlibrary
Ruling of the Court
The Court resolves to deny the petition.
To validly dismiss an employee, the law requires the employer to prove the
existence of any of the valid or authorized causes,24 which, as enumerated in
Article 282 of the Labor Code, are: (a) serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or the
latters 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.25 As a supervisorial employee, Farrales is admittedly subject to
stricter rules of trust and confidence, and thus pursuant to its management
prerogative HPC enjoys a wider latitude of discretion to assess his continuing
trustworthiness, than if he were an ordinary rank-and-file employee.26 HPC
therefore insists that only substantial proof of Farrales guilt for theft is
needed to establish the just causes to dismiss him, as the NLRC lengthily
asserted in its decision.
Article 4 of the Labor Code mandates that all doubts in the implementation
and interpretation of the provisions thereof shall be resolved in favor of labor.
Consistent with the States avowed policy to afford protection to labor, as
Article 3 of the Labor Code and Section 3, Article XIII of the 1987
Constitution have enunciated, particularly in relation to the workers security
of tenure, the Court held that [t]o be lawful, the cause for termination must
be a serious and grave malfeasance to justify the deprivation of a means of
livelihood. This is merely in keeping with the spirit of our Constitution and
laws which lean over backwards in favor of the working class, and mandate
that every doubt must be resolved in their favor.27 Moreover, the penalty
imposed on the erring employee ought to be proportionate to the
offense, taking into account its nature and surrounding circumstances.
The Court has always taken care, therefore, that the employer does not invoke
any baseless justification, much less management prerogative, as a subterfuge
by which to rid himself of an undesirable worker,28 and thus in exceptional
cases the Court has never hesitated to delve into the NLRCs factual
conclusions where evidence was found insufficient to support them, or too
much was deduced from the bare facts submitted by the parties, or the LA and
the NLRC came up with conflicting positions, as is true in this
case.29chanroblesvirtuallawlibrary
As aptly pointed out by the LA, while HPC has the onus probandi that the
taking of Reymars helmet by Farrales was with intent to gain, it failed to
discharge this burden, as shown by the following circumstances: Farrales
sought and obtained the permission of Eric, his co-employee as well
as barangay co-resident, to borrow his helmet; at the parking lot, Farrales
asked another employee, Andy, to fetch a yellow helmet from one of the
parked motorcycles, mistakenly thinking it belonged to Eric (whom he knew
owned two helmets); the following day, November 28, Farrales asked Eric
why he had not dropped by his house to get his helmet, and Eric replied that
Farrales got the wrong helmet because he still had his other helmet with him;
Farrales immediately sought the help of the company guards to locate the
owner of the yellow helmet, who turned out to be Reymar; Farrales
apologized to Reymar for his mistake, and his apology was promptly
accepted.30 All these circumstances belie HPCs claim that Farrales took
Reymars helmet with intent to gain, the LA said.
In ruling that Farrales dismissal by HPC was attended with utmost malice and
bad faith as to justify an award of moral and exemplary damages and
attorneys fees, the LA stated that [i]t is succinctly clear that [the]
respondents [therein] tried to blow out of proportions the indiscretion of
[Farrales] for reasons known only to them, and moreover, [f]inding that the
dismissal on the ground of theft is unavailing, [the] respondents [therein]
immediately offered [Farrales] his former position when he filed [his]
complaint. What does this act of [the] respondents [therein] speak
[of]?31chanroblesvirtuallawlibrary
On the other hand, the NLRC found that Farrales lied, first, when he told
Andy, then already astride his motorbike at the parking area and about to
leave the company premises, that the yellow helmet belonged to
him,32 and second, when he claimed that Eric was his neighbor, although they
were not. It ruled as doubtful Farrales hazy recollection about what happened
that afternoon at the parking lot, since he could not even give a description of
the motorcycle from which he took the yellow helmet. These circumstances,
the NLRC determined, comprise substantial proof belying Farrales claim of
good faith. As a supervisory employee, he held a position of high
responsibility in the company making him accountable to stricter rules of trust
and confidence than an ordinary employee, and under Article 282 of the Labor
Code, he is guilty of a serious misconduct and a willful breach of trust. The
NLRC went on to cite a settled policy that in trying to protect the rights of
labor, the law does not authorize the oppression or self-destruction of the
employer. Management also has its own rights, which as such, are entitled to
respect and enforcement in the interest of simple fair
play.33chanroblesvirtuallawlibrary
But the Court agrees with the CA that Farrales committed no serious or willful
misconduct or disobedience to warrant his dismissal. It is not disputed that
Farrales lost no time in returning the helmet to Reymar the moment he was
apprised of his mistake by Eric, which proves, according to the CA, that he
was not possessed of a depravity of conduct as would justify HPCs claimed
loss of trust in him. Farrales immediately admitted his error to the company
guard and sought help to find the owner of the yellow helmet, and this, the
appellate court said, only shows that Farrales did indeed mistakenly think that
the helmet he took belonged to Eric.
It is not, then, difficult to surmise that when Farrales told Andy that the yellow
helmet was his, his intent was not to put up a pretence of ownership over it
and thus betray his intent to gain, as the NLRC held, but rather simply to
assuage Andys reluctance to heed his passing request to reach for the helmet
for him; Andy, it will be recalled, was at that moment already seated in his
motorbike and about to drive out when Farrales made his request. As to
Farrales claim that he and Eric were neighbors, suffice it to say that as the
CA noted, they resided in the same barangay, and thus, loosely, were
neighbors.
The CA also pointed out that although the alleged theft occurred within its
premises, HPC was not prejudiced in any way by Farrales conduct since the
helmet did not belong to it but to Reymar. In light of Article 69, Class A, Item
No. 29 of the HPC Code of Discipline, this observation may be irrelevant,
although it may be that the LA regarded it as proving HPCs bad faith.
Theft committed by an employee against a person other than his employer, if
proven by substantial evidence, is a cause analogous to serious
misconduct.34 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 in judgment. The misconduct to be serious must be of such grave
and aggravated character and not merely trivial or unimportant. Such
misconduct, however serious, must, nevertheless, be in connection with the
employees work to constitute just cause for his
separation.35chanroblesvirtuallawlibrary

But 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.36 If
doubts exist between the evidence presented by the employer and that of the
employee, the scales of justice must be tilted in favor of the latter. The
employer must affirmatively show rationally adequate evidence that the
dismissal was for a justifiable cause.37chanroblesvirtuallawlibrary

Nonetheless, the Court agrees with the CAs dismissal of the award of moral
and exemplary damages for lack of merit. There is no satisfactory proof that
the concerned officers of HPC acted in bad faith or with malice in terminating
Farrales. Notwithstanding the LAs assertion to this effect, Farrales bare
allegations of bad faith deserve no credence, and neither is the mere fact that
he was illegally dismissed sufficient to prove bad faith on the part of HPCs
officers.38 But concerning the award of attorneys fees, Farrales was dismissed
for a flimsy charge, and he was compelled to litigate to secure what is due him
which HPC unjustifiably withheld.

WHEREFORE, premises considered, the petition for review is DENIED.

SO ORDERED.

G.R. No. 190436, January 16, 2012
NORMAN YABUT, PETITIONER, VS. MANILA ELECTRIC
COMPANY AND MANUEL M. LOPEZ, RESPONDENTS.
DECISION
REYES, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of
Civil Procedure which assails the Decision[1] dated August 10, 2009 and
Resolution[2] dated November 26, 2009 of the Court of Appeals (CA) in the
case docketed as CA-G.R. SP No. 96789, entitled Manila Electric Company
(Meralco) and Manuel M. Lopez v. Norman Yabut and National Labor
Relations Commission.
The Facts
This case stems from a complaint for illegal dismissal and monetary claims
filed by herein petitioner Norman Yabut (Yabut) against respondents Manila
Electric Company (Meralco) and Meralco officer Manuel M. Lopez (Lopez).
The petitioner had worked with Meralco from February 1989 until his
dismissal from employment on February 5, 2004. At the time of said
dismissal, he was assigned at the Meralco Malabon Branch Office as a Branch
Field Representative tasked, among other things, to conduct surveys on
service applications, test electric meters, investigate consumer-applicants'
records of Violations of Contract (VOC) and perform such other duties and
functions as may be required by his superior.
The circumstances antecedent to his dismissal are as follows:
On October 4, 2003, Meralco's Inspection Office issued a memorandum[3]
addressed to Meralco's Investigation-Legal Office, informing it of an illegal
service connection at the petitioner's residence, particularly at No. 17 Earth
Street, Meralco Village 8, Batia, Bocaue, Bulacan. The Inspection Office
claimed discovering shunting wires installed on the meter base for Service
Identification Number (SIN) 708668501, registered under petitioner Yabut's
name. These wires allegedly allowed power transmission to the petitioner's
residence despite the fact that Meralco had earlier disconnected his electrical
service due to his failure to pay his electric bills.
Given this report, Meralco's Head of Investigation-Litigation Office issued to
the petitioner a notice[4] dated November 3, 2003, received by the petitioner's
wife on the same day and with pertinent portions that read:
Please report to our Mr. Rodolfo C. Serra of the Investigation-Litigation at 8th
Floor, Lopez Building, Meralco Center, Ortigas Avenue, Pasig City on
November 11, 2003, at 9:00 a.m. as the Inspection had found your
disconnected electric service with SIN No. 708668501 directly connected by a
shunting wire to energize your empty meter base. If proven true, such act
constitutes dishonesty in violation of Section 7 (3) of the Company Code on
Employee Discipline and/or serious misconduct or an act analogous to fraud
or commission of a crime under Article 282 (a) and (e) of the Labor Code of
the Philippines.
In this investigation, you are entitled to be assisted by a counsel or an
authorized union representative. You are also allowed to present evidence and
material witnesses to testify in your favor.
Should you fail to appear on the aforementioned date, we shall take it to mean
that you are waiving your right to present your side and refute the aforesaid
charge and evidence against you. If you appear alone, we shall take it to mean
that you are waiving your right to be represented by such counsel or union
representative.[5]
The offense under Section 7 (3) of Meralco's Company Code on Employee
Discipline referred to in the aforequoted notice is with penalty of dismissal on
the first offense and is defined as follows:
SECTION 7. Dishonesty.
The following acts shall constitute violation of this Section:
xxxx
3) Directly or indirectly tampering with electric meters or metering
installations of the Company or the installation of any device, with the
purpose of defrauding the Company.
x x x x[6]
In the course of the company's investigations, the petitioner presented his
sworn statement[7] which was executed with the assistance of Jose Tullo, the
Chief Steward and Vice President of Meralco's supervisory union First Line
Association of Meralco Supervisory Employees (FLAMES). Yabut admitted
being the registered customer of Meralco at No. 17 Earth Street, Meralco
Village 8, Batia, Bocaue, Bulacan. The petitioner claimed that his electrical
service was disconnected sometime in July 2003 for unpaid electric bills. On
October 3, 2003, between 10:00 o'clock and 10:30 o'clock in the morning, he
was informed by his wife that Meralco discovered shunting wires on their
meter base during an inspection. The petitioner nonetheless claimed that at
about 8:00 o'clock in the morning of the same day, prior to his wife's notice
upon him of the inspection, he had already given to an officemate the amount
of P8,432.35 and requested that the same be paid to Meralco to cover his
outstanding electric bills. The amount of P8,432.35 plus P1,540 as service
deposit was then paid for the petitioner's account on October 3, 2003 at about
9:30 o'clock in the morning.
Yabut denied knowing the person who installed the discovered shunting
wires. While he did not always go home to their house in Bulacan as there
were times when he stayed in his sister's residence in Malabon, the petitioner
confirmed that he was regularly in his Bulacan house. His residence had
electricity even prior to the full settlement of his outstanding bills through a
connection made to the line of his neighbor Jojo Clemente.
Photographs taken during Meralco's inspection of Yabut's residence were also
presented to and identified by Yabut. He confirmed that the inspected meter
base was installed within his lot's premises. Claiming that he had been
obtaining electricity from a neighbor, he argued that shunting wires in his
meter base could have caused an electrical malfunction. As to Meralco's
allegation that Yabut's wife had admitted the petitioner's authorship of the
illegal connection, Yabut denied knowing of such admission.
Meralcos Litigation Investigation Office summarized the results of
Meralco's findings in a memorandum[8] dated December 30, 2003. It indicated
that Yabuts electric service was disconnected on April 3, 2003 for account
delinquency. Notwithstanding the disconnection and the fact that Meralcos
service had not been reconnected, Yabut's meter registered electric
consumption. The memorandum included the following findings:
While Yabut denied responsibility about the illegal connection, the pictures
taken specifically showing the shunted wires on the meter base and his wife's
admission that he was the one responsible are sufficient proofs of his guilt.
We give credit to the admission of his wife as she did it with spontaneity
without force or intimidation in our part. His alibi that he seldom stayed in his
house is controverted by his admission that within the period in question from
July to October 3, 2003, he stayed home for 24 times. It is surprising that,
being a field representative who has knowledge about illegal connection, it
escaped from his attention the said illegal connection when it could easily be
detected since his metering point is installed in front of his house.
We are not inclined to believe that he resorted to flying connection as it is
apparent that at the time his electric service was disconnected in April, 2003,
the Balagtas Branch found his service to have registered KWHR consumption
from 1555 to 2194 for a total of 639 KWHR indicating that although his
electric service was disconnected, it continued to register electricity.
Moreover, the burden of proof is upon him to present to us the one responsible
but he failed to do so. In the absence of such proof, it is concluded that he,
being the registered customer and a resident, was the one who installed the
illegal connection purposely to alleviate the sickly condition of his wife and
two children.[9]
In view of these findings, respondent Meralco, through its Senior Assistant
Vice President for Human Resources Administration R. A. Sapitula, issued on
February 4, 2004 a notice of dismissal[10] addressed to the petitioner. The
notice cites violation of Section 7, paragraph 3 of Meralco's Company Code
on Employee Discipline and Article 282 (a), (c), (d) and (e) of the Labor Code
of the Philippines as bases for the dismissal. The pertinent portions of the
notice read:
Administrative investigation duly conducted by Legal established that on
October 3, 2003, acting on a tip that you are resorting to illegal service
connection, the Company's Inspection Squad 7 team found two (2) shunting
wires in an energized empty meter base installed at your residence at #17
Earth Street, Meralco Village, Batia, Bocaue, Bulacan. Your wife admitted
that you were the one who installed the shunted wires on your meter base to
have power because she and your two children were sick. The illegal
connection enabled you to defraud the company by consuming unregistered
electricity which makes you liable for violation of Section 7, par. 3 of the
Company Code on Employee Discipline, defined as (d)irectly or indirectly
tampering with electric meters or metering installations of the Company or the
installation of any device, with the purpose of defrauding the Company,
penalized therein with dismissal from the service.
Under Article 282 of the Labor Code of the Philippines, the termination of
your employment in Meralco is justified on the following grounds: (a)
Serious misconduct x x x by the employee x x x in connection with his work;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or representative; (d) Commission of a crime or offense by the
employee against x x x his employer; and (e) Other causes analogous to the
foregoing.
Based on the foregoing, Management is constrained to dismiss you for cause
from the service and employ of the Company, as you are hereby so dismissed
effective February 5, 2004, with forfeiture of all rights and privileges.
Aggrieved by the decision of the management, Yabut filed with the National
Labor Relations Commission (NLRC) a complaint[11] for illegal dismissal and
money claims against Meralco and Lopez.
The Ruling of the Labor Arbiter
On December 28, 2004, Labor Arbiter Antonio R. Macam rendered his
Decision,[12] declaring the petitioner illegally dismissed from the service and
hence, entitled to reinstatement plus backwages and attorney's fees. The
dispositive portion of his decision reads:
WHEREFORE, premises all considered, judgment is hereby rendered, as
follows:
1. Declaring the dismissal of complainant as illegal;
2. Ordering respondents to reinstate complainant to his former position
without loss of seniority rights and privileges, immediately upon
receipt of this decision, either physically or in the payroll, at the option
of the respondent;
 3. Ordering the respondents to pay complainant his full backwages from
date of dismissal up to actual reinstatement, partially computed as
follows:
Backwages = [P]240,420.00
13th Mo. Pay = 24,042.00
_____________________
Total [P]264,462.00
4. Ordering respondents to pay complainant attorney's fees equivalent to
10% of his monetary award.
All other claims are dismissed for lack of merit.
SO ORDERED.[13]
The labor arbiter observed that there was no clear and direct evidence to prove
that Yabut performed the shunting of his metering installation. Furthermore,
the act imputed upon Yabut was not related to the performance of his duties as
a Meralco employee, but as a customer of the company's electric business.
Finally, it was ruled that Meralco failed to observe the twin requirements of
due process in termination cases. The records are bereft of any evidence
showing that the petitioner was apprised of the particular acts or omissions for
which his dismissal was then sought.
Unsatisfied, the respondents appealed from the decision of the labor arbiter to
the NLRC.[14]
The Ruling of the NLRC
On March 31, 2006, the NLRC rendered its Resolution[15] dismissing the
herein respondents' appeal for lack of merit. Subsequently, the NLRC denied
for lack of merit the respondents motion for reconsideration via a
Resolution[16] dated August 28, 2006. This prompted the respondents to file a
petition for certiorari with the CA.
The Ruling of the CA
On August 10, 2009, the CA rendered the now assailed Decision[17] reversing
the rulings of the NLRC. In finding the petitioner's dismissal lawful, the
appellate court attributed unto Yabut authorship of the meter tampering and
illegal use of electricity acts which it regarded as serious misconduct. The
Court observed:
The Court notes that the meter base is located inside respondent Yabut's
premises. Manila Electric Company vs. Court of Appeals said
x x x Metro Concast should bear the responsibility for the tampering of the
facilities within its compound, which was totally under its supervision and
control. Being within its control, any resultant breach in the integrity of the
equipment is indeed attributable to it.[18] (citation omitted)
The court also ruled that the petitioner's right to due process was not violated,
as he was served the required notices and given sufficient opportunity to be
heard. In view of these, the CA annulled and set aside the NLRC's resolutions
via its decision, the dispositive portion of which reads:
WHEREFORE, the petition is granted. The resolutions dated March 31,
2006 and August 28, 2006 are annulled and set aside.
SO ORDERED.[19]
Yabut's motion for reconsideration was denied by the CA via a Resolution
dated November 26, 2009.[20] Hence, the present petition.
The Issue

The issue for this Court's determination is: Whether or not the CA committed
an error of law in annulling and setting aside the resolutions of the NLRC that
declared the herein petitioner illegally dismissed by the respondents.
The petitioner asserts that he was dismissed from employment without a valid
cause, and that due process prior to his termination was not observed by the
respondents.
This Court's Ruling
After study, this Court finds the petition devoid of merit.
The dismissal of the petitioner was
founded on just causes under Article
282 of the Labor Code of the Philippines.
Article 279 of the Labor Code of the Philippines provides that (i)n 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. x x x The
just causes are enumerated in Article 282, which provides:
Article 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.
The requirement for a just cause was satisfied in this case. We note that the
petitioner's employment was terminated by the herein respondents for
violation of Section 7, par. 3 of Meralco's Company Code on Employee
Discipline, and for the existence of just cause under Article 282 (a), (c), (d)
and (e) of the Labor Code.
The petitioner's violation of the company rules was evident. While he denies
any involvement in the installation of the shunting wires which Meralco
discovered, it is significant that said SIN 708668501 is registered under his
name, and its meter base is situated within the premises of his property. Said
meter registered electric consumption during the time his electric service was
officially disconnected by Meralco. It was the petitioner and his family who
could have benefited from the illegal connection, being the residents of the
area covered by the service. His claim that he failed to know or even notice
the shunted wires fails to persuade as we consider the meter located in the
front of his house, the nature of his work as branch field representative, his
long-time employment with Meralco and his familiarity with illegal
connections of this kind.
The logical conclusion that may be deduced from these attending
circumstances is that the petitioner was a party, or at the very least, one who
agreed to the installation of the shunted wires, and who also benefited from
the illegal connection at the expense of his employer-company. In sustaining
the CA's findings, we consider the rule that in administrative and quasi-
judicial proceedings, as in proceedings before the NLRC which had original
jurisdiction over the complaint for illegal dismissal, the quantum of proof
necessary is substantial evidence or such relevant evidence as a reasonable
mind may accept as adequate to support a conclusion.[21]

Significantly, (t)ampering with electric meters or metering installations of the
Company or the installation of any device, with the purpose of defrauding the
Company is classified as an act of dishonesty from Meralco employees,
expressly prohibited under company rules. It is reasonable that its commission
is classified as a severe act of dishonesty, punishable by dismissal even on its
first commission, given the nature and gravity of the offense and the fact that
it is a grave wrong directed against their employer.
To reiterate, Article 282 (a) provides that an employer may terminate an
employment because of an employee's serious misconduct, a cause that was
present in this case in view of the petitioner's violation of his employer's code
of conduct. Misconduct is defined as 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 in judgment. For
serious misconduct to justify dismissal, the following requisites must be
present: (a) it must be serious; (b) it must relate to the performance of the
employee's duties; and (c) it must show that the employee has become unfit to
continue working for the employer.[22]
In reviewing the CAs Decision, we again consider the petitioner's duties and
powers as a Meralco employee. And we conclude that he committed a serious
misconduct. Installation of shunting wires is without doubt a serious wrong as
it demonstrates an act that is willful or deliberate, pursued solely to
wrongfully obtain electric power through unlawful means. The act clearly
relates to the petitioner's performance of his duties given his position as
branch field representative who is equipped with knowledge on meter
operations, and who has the duty to test electric meters and handle customers'
violations of contract. Instead of protecting the companys interest, the
petitioner himself used his knowledge to illegally obtain electric power from
Meralco. His involvement in this incident deems him no longer fit to continue
performing his functions for respondent-company.
While the installation of the shunted wires benefited the herein petitioner as a
customer of Meralco, his act cannot be fully severed from his status as the
respondent's employee. As correctly observed by the CA, (i)t is an offense
against the Company Code of Employee Discipline. As a field representative,
he is knowledgeable on the mechanics of meter and metering installation.[23]
The dismissal is also justified as the act imputed upon the petitioner qualifies
as fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative under Article 282 (c) of the Labor
Code. While the petitioner contests this ground by denying that his position is
one of trust and confidence, it is undisputed that at the time of his dismissal,
he was holding a supervisory position after he rose from the ranks since
commencement of his employment with Meralco. As a supervisor with duty
and power that included testing of service meters and investigation of
violations of contract of customers, his position can be treated as one of trust
and confidence, requiring a high degree of honesty as compared with ordinary
rank-and-file employees. This Court declared in The Coca-Cola Export
Corporation v. Gacayan:[24]
Law and jurisprudence have long recognized the right of employers to dismiss
employees by reason of loss of trust and confidence. More so, in the case of
supervisors or personnel occupying positions of responsibility, loss of trust
justifies termination. Loss of confidence as a just cause for termination of
employment is premised from the fact that an employee concerned holds a
position of trust and confidence. This situation holds where a person is
entrusted with confidence on delicate matters, such as the custody, handling,
or care and protection of the employer's property. But, in order to constitute a
just cause for dismissal, the act complained of must be work-related such as
would show the employee concerned to be unfit to continue working for the
employer.[25] (citations omitted)
In this case, the acts complained of were clearly work-related because they
related to matters the petitioner handled as branch field representative. Taking
into account the results of its investigations, Meralco cannot be expected to
trust Yabut to properly perform his functions and to meet the demands of his
job. His dishonesty, involvement in theft and tampering of electric meters
clearly prejudice respondent Meralco, since he failed to perform the duties
which he was expected to perform.
Considering the foregoing, this Court agrees that there were just causes for the
petitioner's dismissal. We emphasize that dismissal of a dishonest employee is
to the best interest not only of the management but also of labor. As a measure
of self-protection against acts inimical to its interest, a company has the right
to dismiss its erring employees. An employer cannot be compelled to continue
employing an employee guilty of acts inimical to the employers interest,
justifying loss of confidence in him.[26]
The requirements of procedural
due process were satisfied.
On the matter of procedural due process, it is well-settled that notice and
hearing constitute the essential elements of due process in the dismissal of
employees. The employer must furnish the employee with two written notices
before termination of employment can be legally effected. The first apprises
the employee of the particular acts or omissions for which dismissal is sought.
The second informs 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.[27]
These requirements were satisfied in this case. The first required notice was
dated November 3, 2003, sufficiently notifying the petitioner of the particular
acts being imputed against him, as well as the applicable law and the company
rules considered to have been violated. Notably, in his sworn statement dated
November 17, 2003, the petitioner admitted receiving Meralco's notice of
investigation dated November 3, 2003, to wit:
37. T. Natanggap mo ba yong notice ng investigation na may petsang
November 3, 2003 na personally na ipinadala namin sa iyo sa bahay
mo na may numerong 17 Earth St., Meralco Village 8, Batia, Bocaue,
Bulacan?
S. Opo.
38. T. Ipinapakita ko sa iyo ang isang notice ng investigation na may
petsang November 3, 2003 na naka-addressed (sic) sa isang Mr.
Norman C. Yabut ng 17 Earth Street, Meralco Village 8, Batia,
Bocaue, Bulacan at ang may lagda ay si Atty. J.R.T. Albarico, head ng
Investigation-Litigation ng Meralco. Dito sa nasabing notice ay may
nakalagay sa ibaba na received by Salvacio (sic) M. Yabut na may
kanyang pirma, at nakalagay din ang date na 11/03/03 at ang
nakalagay sa relationship ay wife. Ano ang masasabi mo tungkol sa
bagay na ito.
S. Ito po yong notice ng investigation na aking natanggap at ang
nakatanggap nito ay ang aking misis na si Maria Salvacion Yabut.[28]
On November 17, 2003, Meralco conducted a hearing on the charges against
the petitioner. During said time, the petitioner was accorded the right to air his
side and present his defenses on the charges against him. Significantly, a high-
ranking officer of the supervisory union of Meralco assisted him during the
said investigation. His sworn statement[29] that forms part of the case records
even listed the matters that were raised during the investigation.
Finally, Meralco served a notice of dismissal dated February 4, 2004 upon the
petitioner. Such notice notified the latter of the company's decision to dismiss
him from employment on the grounds clearly discussed therein.
WHEREFORE, in view of the foregoing, the petition for review on
certiorari is hereby DENIED. The assailed Decision dated August 10, 2009
and Resolution dated November 26, 2009 of the CA in CA-G.R. SP No.
96789 are hereby AFFIRMED.
G.R. No. 173189 February 13, 2013
JONATHAN I. SANG-AN, Petitioner,
vs.
EQUATOR KNIGHTS DETECTIVE AND SECURITY AGENCY,
INC., Respondents.
DECISION
BRION, J.:
Before the Court is the petition for review on certiorari1 filed by petitioner
Jonathan I. Sang-an assailing the decision2 dated September 29, 2005 and the
resolution3 dated May 29, 2006 of the Court of Appeals (CA) in CA-G.R. SP.
No. 86677. TheCA set aside the decision4 dated December 15, 2003 of the
National Labor Relations Commission (NLRC) and reinstated the
decision5 dated July 30, 200 I of Labor Arbiter Geoffrey P.
Villahermosa (LA).
The Facts
Jonathan was the Assistant Operation Manager of respondent Equator Knights
Detective and Security Agency, Inc. (Equator). He was tasked, among others,
with the duty of assisting in the operations of the security services; he was
also in charge of safekeeping Equators firearms.
On April 21, 2001, Equator discovered that two firearms were missing from
its inventory. The investigation revealed that it was Jonathan who might have
been responsible for the loss.6 On April 24, 2001, Jonathan was temporarily
suspended from work pending further investigation.
On May 8, 2001, while Jonathan was under suspension, a security guard from
Equator was apprehended by policemen for violating the Commission on
Elections gun ban rule. The security guard stated in his affidavit7 that the
unlicensed firearm had been issued to him by Jonathan.
On May 24, 2001, Jonathan filed with the NLRC a complaint for illegal
suspension with prayer for reinstatement.8 In his position paper, however,
he treated his case as one for illegal dismissal and alleged that he had been
denied due process when he was dismissed.9 Equator, on the other hand,
argued that Jonathans dismissal was not illegal but was instead for a just
cause under Article 282 of the Labor Code.10
On July 30, 2001, the LA rendered a decision11 dismissing the complaint. It
declared that no illegal dismissal took place as Jonathans services were
terminated pursuant to a just cause. The LA found that Jonathan was
dismissed due to the two infractions he committed:
The basis for the termination of the complainant was first, when he was
suspended when he issued a firearm [to] a security guard and then replaced it
with another one, then took the respondent[s] firearm with him and since then
both firearms were lost. x x x.
xxxx
His second offense which resulted in his being terminated was when he issued
an unlicensed firearm to a Security Guard stationed in one of the business
establishment[s] in Bais City which is a client of the respondents.
xxxx
WHEREFORE, in the light of the foregoing, judgment is hereby rendered
DISMISSING this case for lack of legal and factual basis.12
Jonathan appealed the LAs decision to the NLRC, contending that no charge
had been laid against him; there was no hearing or investigation of any kind;
and he was not given any chance or opportunity to defend himself.
The NLRC sustained the findings of the LA that there had been just
cause for his dismissal. However, it found that Jonathan had been denied
his right to due process when he was dismissed. It held that Equators letter
informing him of his temporary suspension until further notice did not satisfy
the requirements of due process for a valid dismissal. Thus, the NLRC
modified the LAs decision and ordered Equator to pay Jonathan backwages
from April 24, 2001 until the date of the NLRCs decision. Equator moved for
reconsideration but the NLRC denied the motion, prompting the filing of a
petition for certiorari under Rule 65 of the Rules of Court with the CA.
Equator argued that the NLRC committed grave abuse of discretion when it
found that Jonathan had been denied procedural due process.
The CA reversed the decision of the NLRC, finding that Equator substantially
complied with the procedural requirements of due process. It found that the
letter given to Jonathan did not mean that he had been dismissed; rather, he
was only suspended the very reason for the case for illegal suspension
Jonathan filed before the LA.1wphi1
The CA found that Jonathan filed his complaint for illegal suspension on May
2, 2001. During the pendency of the illegal suspension case before the LA,
Jonathan committed another offense on May 8, 2001 when he issued the
unlicensed firearm to Equators security guard. The CA found that Equators
June 7, 2001 position paper brought Jonathans second offense before the LA
for resolution; thus, Jonathan was not denied due process. The CA reinstated
the LAs decision dismissing Jonathans complaint. Jonathan filed a motion
for reconsideration which the CA denied. He thereafter filed the present
petition.
The Parties Arguments
Jonathan contends that when Equator filed a petition for certiorari under Rule
65 of the Rules of Court alleging grave abuse of discretion by the NLRC, it
failed to post a cash or surety bond as required by Article 223 of the Labor
Code. Without complying with this condition, the petition
for certiorari should have been dismissed outright. Also, Jonathan contends
that the CAs findings of fact are contrary to the findings of fact by the NLRC.
Since the findings of fact of quasi-judicial agencies are accorded respect and
finality, he argues that the NLRCs decision must be sustained.
Equator, on the other hand, submits that the rule on posting of cash or surety
bond as required by Article 223 of the Labor Code is not applicable in a
petition for certiorari under Rule 65 of the Rules of Court. It also submits that
both the LA and the NLRC concur in finding just cause for the dismissal of
Jonathan; hence, Jonathans subsequent dismissal is valid.
The Issues
Given the parties arguments, the case poses the following issues for the
Courts resolution:
1. whether the posting of a cash or surety bond is required for the filing of a
petition for certiorari under Rule 65 of the Rules of Court with the CA; and
2. whether Jonathan was validly dismissed.
The Courts Ruling
We find the petition partially meritorious.
A cash/surety bond is not needed in a Petition for Certiorari under Rule 65
The requirement of a cash or surety bond as provided under Article 223 of the
Labor Code only applies to appeals from the orders of the LA to the NLRC. It
does not apply to special civil actions such as a petition for certiorari under
Rule 65 of the Rules of Court. In fact, nowhere under Rule 65 does it state that
a bond is required for the filing of the petition.
A petition for certiorari is an original and independent action and is not part
of the proceedings that resulted in the judgment or order assailed before the
CA. It deals with the issue of jurisdiction, and may be directed against an
interlocutory order of the lower court or tribunal prior to an appeal from the
judgment, or to a final judgment where there is no appeal or any plain, speedy
or adequate remedy provided by law or by the rules.
Jonathan filed a complaint for illegal dismissal
Contrary to the findings of the CA, Jonathan was not merely suspended but
was dismissed from the service. While Jonathan initially filed an action for
illegal suspension, the position papers both parties filed treated the case as one
for illegal dismissal. Jonathan alleged in his position paper that "the
[r]espondent illegally SUSPENDED (DISMISSED) the x x x complainant[,]"
and claimed that his dismissal lacked the required due process.13 Similarly,
Equators position paper states that after the commission of the second offense
on May 8, 2001, "[management] made up a decision to
dismiss [Jonathan]."14 Even the LA treated the case before him as "a case for
illegal dismissal[.]"15 In Equators memorandum to this Court, it admitted that
Jonathan was dismissed.16
We also find that Jonathan did not file his complaint for illegal suspension on
May 2, 2001. The records of the case disclose that the receiving date stamped
on the complaint is May 24, 2001. The date relied upon by the CA, May 2,
2001, was the date when the complaint was subscribed and sworn to before a
notary public.17 Due to the second offense committed by Jonathan on May 8,
2001, Equator decided to dismiss him. Therefore, when the LA tried the case,
Jonathan had already been dismissed.
Equator failed to comply with the procedural due process
In order to validly dismiss an employee, it is fundamental that the employer
observe both substantive and procedural due process the termination of
employment must be based on a just or authorized cause and the dismissal can
only be effected, after due notice and hearing.18
This Court finds that Equator complied with the substantive requirements of
due process when Jonathan committed the two offenses.
Article 282(A) of the Labor Code provides that an employee may be
dismissed on the ground of serious misconduct or willful disobedience of the
lawful orders of his employer or representative in connection with his work.
Misconduct is improper or wrongful 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 within the meaning of the Labor
Code, must be of such grave and aggravated character and not merely trivial
or unimportant. It is also important that the misconduct be in connection with
the employee's work to constitute just cause for his separation.19
By losing two firearms and issuing an unlicensed firearm, Jonathan committed
serious misconduct. He did not merely violate a company policy; he violated
the law itself (Presidential Decree No. 1866 or Codifying the Laws on
Illegal/Unlawful Possession, Manufacture, Dealing in, Acquisition or
Disposition, of Firearms, Ammunition or Explosives or Instruments Used in
the Manufacture of Firearms, Ammunition or Explosives, and Imposing Stiffer
Penalties for Certain Violations Thereof and for Relevant Purposes),20 and
placed Equator and its employees at risk of being made legally liable. Thus,
Equator had a valid reason that warranted Jonathans dismissal from
employment as Assistant Operation Manager.
The Court, however, finds that Equator failed to observe the proper procedure
in terminating Jonathans services. Section 2, Rule XXIII, Book V of the
Omnibus Rules Implementing the Labor Code provides that:
Section 2. Standard 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 Labor 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 NLRC, although final, was brought to CA on a petition for certiorari and was
against him; and eventually nullified for grave abuse of discretion. When the CA ruled on the
case, this Court had abandoned the ruling in Serrano v. NLRC24 in favor of the
(c) A written notice [of] termination served on the employee indicating that Agabon ruling.
upon due consideration of all the circumstances, grounds have been
established to justify his termination.21 WHEREFORE, we hereby PARTIALLY GRANT the petition. The
decision dated September 29, 2005 and the resolution dated May 29, 2006 of
Jurisprudence has expounded on the guarantee of due process, requiring the the Court of Appeals in CA-G.R. SP. No. 86677
employer to furnish the employee with two written notices before termination are AFFIRMED with MODIFICATION. The employer, Equator Knights
of employment can be effected: a first written notice that informs the Detective and Security Agency, Inc., had sut1icient basis to terminate the
employee of the particular acts or omissions for which his or her dismissal is employment of Jonathan I. Sang-an whose dismissal is thus declared to be
sought, and a second written notice which informs the employee of the substantively valid. However, he was denied his right to procedural due
employer's decision to dismiss him. In considering whether the charge in the process for lack of the required notice of dismissal. Consequently, Equator
first notice is sufficient to warrant dismissal under the second notice, the Knights Detective and Security Agency, Inc. is ordered to pay petitioner
employer must afford the employee ample opportunity to be heard. Jonathan I. Sang-an P30,000.00 as nominal damages for its non-compliance
A review of the records shows that Jonathan was not furnished with any with procedural due process.
written notice that informed him of the acts he committed justifying his SO ORDERED.
dismissal from employment. The notice of suspension given to Jonathan only
pertained to the first offense, i.e., the loss of Equators firearms under
Jonathans watch.1wphi1 With respect to his second offense (i.e., the
issuance of an unlicensed firearm to Equators security guard that became
the basis for his dismissal), Jonathan was never given any notice that allowed
him to air his side and to avail of the guaranteed opportunity to be heard. That
Equator brought the second offense before the LA does not serve as notice
because by then, Jonathan had already been dismissed.
In order to validly dismiss an employee, the observance of both substantive
and procedural due process by the employer is a condition sine qua non.
Procedural due process requires that the employee be given a notice of the
charge against him, an ample opportunity to be heard, and a notice of
termination.22
Since Jonathan had been dismissed in violation of his right to procedural due
process but for a just cause, Equator should pay him nominal damages
of P30,000.00, in accordance with Agabon v. NLRC.23 The decision of the

[G.R. No. 158232. March 31, 2005]
FUJITSU COMPUTER PRODUCTS CORPORATION OF THE
PHILIPPINES and ERNESTO ESPINOSA, petitioners, vs. THE
HONORABLE COURT OF APPEALS, VICTOR DE GUZMAN and
ANTHONY P. ALVAREZ, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review under Rule 45 of the Rules of court assailing the
Decision[1] of the Court of Appeals in CA-G.R. SP No. 71324 reversing the
decision of the National Labor Relations Commission (NLRC) in NLRC NCR
CA NO. 024541-00 dismissing respondents Victor De Guzman and Anthony
P. Alvarez from employment, and the Resolution dated May 14, 2003 denying
the motion for reconsideration thereof.
The Facts of the Case
Petitioner Fujitsu Computer Products Corporation of the Philippines (FCPP) is
a corporation organized and existing under Philippine laws with business
address at the Special Export Processing Zone, Carmelray, Canlubang,
Calamba, Laguna. It is engaged in the manufacture of hard disc drives, MR
heads and other computer storage devices for export.[2]
Respondent Victor de Guzman began working for FCPP on September 21,
1997 as Facilities Section Manager. As of 1999, he was also holding in a
concurrent capacity the position of Coordinator ISO 14000 Secretariat and
was receiving a monthly salary of P43,100.00[3]
Respondent Allan Alvarez, on the other hand, was employed as a Senior
Engineer on April 21, 1998. He was assigned at the Facilities Department
under the supervision of respondent De Guzman, and was then earning
P16,800.00.[4]
The garbage and scrap materials of FCPP were collected and bought by the
Saros Trucking Services and Enterprises (Saros). On January 15, 1999,
respondent De Guzman as Facilities Section Manager, for and in behalf of
FCPP, signed a Garbage Collection Agreement[5] with Saros, and the latters
signatory therein was its owner and general manager, Larry Manaig.
Sometime in the third week of July 1999, petitioner Ernesto Espinosa, HRD
and General Affairs Director of FCPP, received a disturbing report from
Manaig. Manaig reported that respondent De Guzman had caused the
anomalous disposal of steel [purlins][6] owned by FCPP.[7] Two of Manaigs
employees, Roberto Pumarez[8] and Ma. Theresa S. Felipe,[9]executed written
statements detailing how respondent De Guzman had ordered the steel purlins
to be brought out.
Thereafter, petitioner Espinosa sent a two-page Inter-Office Memorandum
dated July 24, 1999 to respondent De Guzman, effectively placing him under
preventive suspension. He was likewise directed to submit his written
explanation on the charges against him. The Memorandum is worded as
follows:
This refers to the report we have received from Mr. Larry Manaig, owner of
Saros Trucking Services, FCPPs garbage/scrap contractor.
It was disclosed to us that sometime in the first week of July 1999, you
personally approached Mr. Roberto Pumarez, Supervisor of Saros, and
intimated to him your interest in the scrap metals which were taken from
Building B which at present is undergoing renovation. You allegedly told him
that since Saros is paying FCPP P2.50 per kilo of metal, you will buy it from
Saros for P3.00 per kilo. Thereafter, on July 10, 1999, Mr. Adrian Camcaman,
one of your staff in the Facilities Section, ordered Mr. [Pumarez] to send a
truck to pick up the scrap metals which you had earlier pointed to Mr.
[Pumarez]. These assorted metals were covered by Scrap/Garbage Gate Pass
Receipt No. 3413.
From these assorted metals, it was revealed to us that approximately 2,800
kgs. were delivered by Saros, per your instruction, to Sta. Rosa Baptist
Church. After this, on July 12, 1999, the remaining scrap metals were again
picked up by Saros. This time, the assorted metals were covered by
Scrap/Garbage Pass NO. 3419. From these assorted [metals] 1,230 kgs. were
purposely excluded from the gross weight to be reported and paid to FCPP.
Again, these excluded metals were delivered to the same Baptist Church, per
your instruction. According to Mr. Manaig, despite several demands from
you, you have not yet remitted to him the payment for those assorted scrap
metals which you caused to be delivered to Sta. Rosa Baptist Church.
In addition to the foregoing, it was likewise reported by Mr. Manaig that there
were previous occasions in the past where you solicited from him empty
drums, pails, and corrugated cartons, which were all part of those picked up
from FCPP. Attached hereto are the statements given by the concerned
employees of Saros.
Clearly, your above actions constitute qualified theft, grave abuse of authority,
and willful breach of trust and confidence.
In view of the foregoing, you are hereby directed to submit your written
explanation within forty-eight (48) hours from your receipt hereof why no
disciplinary sanction should be imposed against you, including dismissal from
the service. Should you fail to do so, as hereby directed, we shall be
compelled to assess and evaluate your case based on available records. In the
meantime, you are hereby placed under preventive suspension effective
immediately, pending further investigation of your case.[10]
Thereafter, Cesar Picardal, the Security Manager of FCPP, interviewed
employees of SNK Philippines, Inc. (SNK), a building contractor then
working in the premises of FCPP. Rolando P. Astillero,[11] Maurice
Victoriano[12] and Nat Balayan[13] voluntarily executed handwritten statements
on the matter.
According to their respective accounts of what transpired on July 10, 1999, a
10-wheeler truck arrived at the company warehouse at around 1:00 p.m.
Assorted scrap materials were then hauled into the truck, including steel
purlins. Knowing that they could still be used as braces for hepa-filter box
hangers, SNK Mechanical Supervisor Balayan asked his superior, Nobuaki
Machidori, if the hauling could be stopped, to which the latter consented.
Balayan approached the driver of the truck and told him not to include the
steel purlins; the warehouse helpers then began separating the steel purlins
from the other scrap materials to be hauled.
Astillero had also requested the men to stop the hauling. SNK Engineer
Victoriano had apparently told him that the steel purlins would still be used
for construction. At around 2:00 p.m., respondent De Guzman called
Victoriano and asked whether the scrap materials at the Fuji Electric
Warehouse could already be collected by the scrap dealer. Victoriano
assented, but requested that the existing c-purlins be dismantled and that 20
lengths would be used as additional bracket support for heap box/FCU
installation.[14]
Adrian Camcaman, an employee of the Facilities Department under
respondent De Guzman, then arrived and informed Astillero that Victoriano
had already given permission for the hauling to commence.[15] Camcaman also
executed a written statement[16] regarding the matter.
In his Explanation[17] dated July 26, 1999, respondent De Guzman alleged the
following in his defense:
Sometime in the first week of July 1999, I came to know from Rev. Mario de
Torres, Pastor of St. Rosa Bible Baptist Church that they are in need of some
steel [purlins] to be used by the church for its roof deck construction. I told
him that I know a scrap dealer where he could possibly buy the said materials.
I told him that Saros Trucking Services is the regular buyer of FCPPs scrap
materials and they can buy from them. I referred the matter therefore to Mr.
Roberto [Pumarez], Supervisor of Saros and told him of the intension of the
Sta. Rosa Bible Baptist Church (SRBBC) to buy scrap metal. I further told
him that since Saros is paying FCPP P2.60 of scrap metal, Sta. Rosa Bible
Baptist Church can buy it from Saros at P3.00 per kilo a price higher than
FCPP. The statement of Mr. [Pumarez] which says that I will buy it from
Saros was not correct which I strongly object. Acknowledging that Mr.
[Pumarez] is amenable to sell the scrap to Sta. Rosa Bible Baptist Church after
consultation from his boss I advised the Pastor of Sta. Rosa Bible Baptist
Church that Saros agreed. My part of the transaction ended there. Thereafter,
as reported by my staff the scrap metals were delivered to the church by the
Saros Trucking Services on July 10, 1999 covering the net weight of 2,860
kilos based on the submitted weighing scale ticket numbers 37830 and 37844
from ANGLO-WATSONS PHILS., INC., the weighing bridge company.
These were covered by gate pass number 3413. On July 12, 1999, it was
reported that the remaining scrap metals were again delivered to the Sta. Rosa
Bible Baptist Church covered by gate pass number 3419 but the exact weight
could not be determined yet pending the scale ticket submission. As of July
24, 1999 the weight scale ticket of the last delivery was not yet confirmed [or]
submitted to FCPP.
It is not true that Mr. Larry Manaig demanded to me several times the
payment of the scrap because his secretary followed up to me only once and I
told her that the church is still awaiting for the actual quantity and value of the
metal scrap. When my staff Mr. Camcaman returned from his two weeks
nightshift duty and reported for dayshift duty he submitted to me the scale
ticket of the first delivery (see Exhibit I). Please note that the scale ticket of
the second delivery was not yet submitted by Saros and only verbally
communicated that the weight delivered to the Sta. Rosa Bible Baptist Church
is approximately 1,230 kgs.[18]
Respondent De Guzman also pointed out that he could not be charged for
qualified theft since he merely issued gate passes to Saros after the scrap
metals were declared ready for disposal by SNK, the company in charge
thereof. The scrap metals in question were all accounted fro and collected by
Saros, and upon collection would be considered sold to the latter. Respondent
De Guzman theorized that the latter initiated the complaint against him since
he was now in charge and had recently implemented measures to monitor and
confirm the actual weighing of all the scrap materials which had not been
done before. Saros had apparently been previously free to haul all the scrap
materials without field supervision from petitioner FCPP.
On July 28, 1999, respondent Alvarez sent an e-mail message to his co-
employees, expressing sympathy for the plight of respondent De Guzman.
Respondent Alvarez used a different computer, but the event viewer system
installed in the premises of petitioner FCPP was able to trace the e-mail
message to him. Thus, on even date, petitioner Espinosa issued an Inter-Office
Memorandum addressed to respondent Alvarez, worded as follows:
TO : MR. ALLAN ALVAREZ
FROM : HRD and General Affairs Department
SUBJECT : SENDING OF E-MAIL MESSAGE SYMPATHETIC
TO MR. DE GUZMAN
DATE : July 28, 1999
___________________________________________________________
This is in reference to the July 28, 1999 E-mail message sent to all E-mail
users from R. Sato this morning.
Upon investigation, records reveal that you used the computer assigned to
Shirley Bagnes and sent a message hi to yourself. Moreover, the event viewer-
system showed that you logged at 7:19:58 (also using the computer of Shirley
Bagnes).
Please explain in writing within 48 hours why no disciplinary action should be
filed against you, including dismissal, for grossly presenting information
which [is] highly confidential while an investigation on Mr. De Guzman is
going on. Moreover, your action of obtaining the sympathy of employees
through the use of the E-mail goes against your role as a key person holding a
highly responsible position in the Facilities Section.
(Sgd.)
ERNESTO G. ESPINOSA
HRD and General Affairs Director[19]
Respondent Alvarez submitted a written Explanation dated September 29,
1999 where he apologized, readily admitted that he was the sender of the e-
mail message in question, and claimed that he acted alone with his own
conviction. He alleged, however, that he was only expressing his sentiments,
and that he was led by his desire to help a friend in distress. He further
explained:
Im not [meddling] with the case of our boss but as Facilities member, we are
sympathetic to the case against him. If the hearsay (sic) is true, that he is
[charged] on the ground of manipulating the scrap management, then we
totally disagree. It was said that he was charged with qualified theft due to
pull-out of metal scrap for his church.
Our basis is pure hearsay but in all indication, we feel that the case is going
against our boss. It was frustrating for us to be kept on dark side, helplessly
waiting to defend him. We are afraid that one day, the case is already closed
and we even have not said what we have to say. Sorry to have [caused] the e-
mail just to be heard (I regret but the damage has been done and could not do
anything about it).
We [believe] that the action of the hauler is premeditated and hastily done to
pin down our boss. The transaction between the Hauler and the Church has
been transparent to us. Though the action has been immediate due to request
of hauler to get the metal scrap, verbal agreement has been made. We had
arranged hastily the hauling with the consent of Construction Contractor and
know about the request of the Church. As agreed by the Church and [Hauler],
the payment will be P3.00/kg plus hauling fee. Hence, the Hauler will profit
P0.40/kg (already deducted their normal payment to our company of
P2.60/kg). However, for an obvious reason, the hauler had not accepted the
payment to make it look that he asked for the favor. And as hearsay, the case
filed against him is very strong with [pre-arranged] evidence. We believe that
the evidence has no merit at all. In fact, the Hauler had to pay the company on
its entirety as we had recorded the full scale of scrap. It is the business and full
responsibility of Hauler to sell its [goods] or donate [them] for free. The
church has no liability to our company but only the Hauler who have to settle
all its account. The timing of these charges as we believe could be attributed
to the improved waste management of our company. Beginning June, the
hauler had to pay a bigger amount for scrap (P0.25 million/month) against its
previous billing of P15,000/month. As ISO 14001 Promotion Secretariat, we
are mandated [to continuously improve] our Environmental Management
System. Aside from the direction of our President to cut cost, it is our small
way of helping on this objective.[20]
Respondent Alvarez was informed that his services were terminated on the
ground of serious misconduct effective August 13, 1999 through a
Memorandum of even date, worded as follows:
After a careful evaluation of your case, it is our well discerned view, as
supported by competent and strong evidences, that you are guilty of serious
misconduct.
Ordinarily, while an innocent and responsible expression of concern or
opinion over the probable innocence or guilt of a co-employee, who is under
administrative investigation, may not be considered as an infraction of
company rules and regulations, the same consideration does not obtain in your
case.
The following environmental circumstances which surrounded your E-mail
message of concern over the preventive suspension upon Mr. Victor de
Guzman, your superior, and whose case is still undergoing further impartial
investigation, do not speak well of your true motive behind the action you
have taken.
Firstly, to hide your identity as the source of the E-mail message, you
intentionally used the computer of another employee, Shirley Bagnes. But
before you actually sent the E-mail message, you tried to test the
communication line between Shirley Bagnes computer and your assigned
computer by using Ms. Bagnes computer in sending your computer the
message hi. Fortunately, however, our viewer-system was able to record you
as the author of the E-mail message.
To further compound the situation, you timed-in at 7:46 a.m. (which you
would later admit), in anticipation of a possible inquiry from the management
as to the source of the message, to show that it was not possible for you to
have sent the message just about the same time because you just arrived. It
was later confirmed, however, that you were already using your computer as
early as 7:21 a.m.
Moreover, we do not share your justification as contained in your July 29,
1999 written explanation, where you also readily admitted your culpability,
that the reason why you were compelled to send an E-mail message was
simply to show your support to Mr. De Guzman, who according to your
premature and unsupported conclusion is innocent of the charges lodged
against him. Nobody can say so at this point because the matter is still under
investigation. Your explanation is contrary to the fact that, with malice and
afterthought, you deliberately sent the E-mail message to almost 150 Filipino
and Japanese officers and employees, who are almost entirely and officially
not privy to the ongoing investigation.
Obviously, your foregoing actions at that time, as well as the tenor of your E-
mail message, were evidently and maliciously premeditated to undermine the
result of the ongoing administrative investigation involving Mr. De Guzman,
and therefore, constitute serious misconduct. Moreover, your actions do not
speak well of a ranking Senior Engineer in the Facilities Section especially in
consideration of the fact that you have several employees reporting to you and
should in fact, serve as their role model.
In view of the foregoing ineluctable facts, you are hereby terminated from the
service, effective immediately. Please proceed to the Finance and Accounting
Department to clear yourself from any accountability and to claim whatever
unpaid salaries and benefits which are still due you as of this date.
For your information and guidance.[21]
Respondent De Guzmans employment was thereafter terminated effective
August 23, 1999 through an Inter-Office Memorandum[22] of even date.
The respondents then filed a complaint for illegal dismissal against the
petitioners with prayer for reinstatement, full backwages, damages and
attorneys fees before the NLRC, Regional Arbitration Branch, Region IV. The
case was docketed as NLRC Case No. RAB-IV-9-11426-99-L. After the
mandatory conciliation proceedings failed, the parties were required to submit
their respective position papers.
The Ruling of the Labor Arbiter
On April 17, 2000, Labor Arbiter Antonio R. Macam ruled in favor of FCPP,
stating that it was justified in terminating the employment of the respondents.
The dispositive portion of the decision reads:
WHEREFORE, premises considered, the instant complaint is hereby
dismissed for lack of merit. Ernesto Espinosas counterclaim is likewise
dismissed under the same reason.
SO ORDERED.[23]
According to the Labor Arbiter, respondent De Guzman, a managerial
employee, was validly dismissed for loss of trust and confidence. Citing a
number of cases,[24] the Labor Arbiter stressed that where an employee holds a
position of trust and confidence, the employer is given wider latitude of
discretion in terminating his services for just cause.
According to the Labor Arbiter, the systematic and calculated manner by
which respondent Alvarez sent e-mail messages to his co-employees could not
be disregarded. Thus, respondent Alvarezs reliance on his freedom to express
his opinion was misplaced, and to condone such infraction would erode the
discipline which FCPP, as the employer, requires its employees to observe for
orderly conduct in the company premises.
The Labor Arbiter likewise ruled that as borne out by the records, the
respondents were not denied due process since they were sufficiently accorded
an opportunity to be heard.
Unsatisfied, the respondents appealed the Labor Arbiters decision to the
NLRC.
The Ruling of the NLRC
The NLRC sustained the ruling of the Labor Arbiter and dismissed the
respondents appeal for lack of merit. According to the Commission, the Labor
Arbiters assessment an evaluation of the facts of the case, as well as the
evidence adduced by both parties, had been quite thorough. Considering that
the decision appealed from was supported by substantial evidence, there was
no reason to deviate from the findings of the Labor Arbiter.
The NLRC also affirmed the Labor Arbiters finding that respondent De
Guzman, a managerial employee who was routinely charged with custody and
care of the petitioners property, was validly dismissed on the ground of willful
breach of trust and confidence. Citing Caete v. NLRC,[25] the Commission
pointed out that the right of the employer to dismiss an employee on the
ground of loss of confidence or breach of trust has been recognized by no less
than the Supreme Court. Moreover, respondent De Guzman abused his
position as Facilities Manager of petitioner FCPP when he prematurely
declared the steel purlins as scrap materials. The Commission also considered
against respondent De Guzman his belated [and] unsuccessful attempt to
cover up his misdeeds.
In so far as the dismissal of respondent Alvarez was concerned, the
Commission held that the circumstances surrounding the sending of the
clearly malicious and premeditated e-mail message constituted no less than
serious misconduct. Hence, respondent Alvarezs dismissal was also justified
under the circumstances.
The NLRC also concluded that the respondents were not denied due process,
since they were adequately informed of the charges against them and were
required to explain thereon.
The respondents filed a motion for reconsideration of the said decision, which
the NLRC denied in a Resolution dated April 9, 2002. The respondents then
elevated their case to the Court of Appeals (CA).
The Ruling of the CA
The CA reversed the ruling of the NLRC and held that the respondents were
illegally dismissed. According to the appellate court, the non-payment of the
scrap steel purlins by the Sta. Rosa Bible Baptist Church (Sta. Rosa) to Saros
was not a valid cause for the dismissal of respondent De Guzman. Contrary to
the findings of the Labor Arbiter, respondent De Guzman did not betray the
trust reposed on him by his employer, as the transaction involving the sale of
scrap steel purlins was between Sta. Rosa and Saros. The CA further ruled that
the burden of proving just cause for termination of employment rests on the
employer, which in this case, petitioner FCPP was unable to prove by
substantial evidence. Considering that respondent De Guzmans dismissal was
not founded on clearly established facts sufficient to warrant his separation
from work, the petitioners act of dismissing him primarily for the sale of scrap
metal purlins was unjustified.
Anent the dismissal of respondent Alvarez, the CA ruled that his act of
sympathizing and believing in the innocence of respondent De Guzman and
expressing his views was not of such grave character as to be considered
serious misconduct which warranted the penalty of dismissal. The appellate
court also stressed that in determining the penalty to be imposed on an erring
employee, due consideration must be given to the length of service and the
number of violations committed during employment. According to the CA,
the petitioners failed to take these factors into consideration in dismissing
respondent Alvarez; hence, the latter was illegally dismissed. Thus, they were
entitled to reinstatement to their respective positions without loss of seniority
rights, full backwages, and other benefits corresponding to the period from
their illegal dismissal up to actual reinstatement. The dispositive portion reads:
WHEREFORE, the petition is given due course; the assailed decision of
respondent NLRC affirming the Labor Arbiters judgment is
hereby REVERSED and SET ASIDE, and another one entered ordering the
reinstatement of petitioners to their respective positions, without loss of
seniority rights, and with full backwages.
SO ORDERED.[26]
The petitioners filed a motion for reconsideration of the said decision, which
the appellate court denied in a Resolution dated May 14, 2003.
Aggrieved, the petitioners now come to this Court, ascribing the following
errors committed by the CA:
I.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT TOTALLY IGNORED THE WELL ENTRENCHED RULE
BEING FOLLOWED IN THIS JURISDICTION THAT FACTUAL
FINDINGS OF THE NLRC AFFIRMING THOSE OF THE LABOR
ARBITER, WHEN SUFFICIENTLY SUPPORTED BY EVIDENCE ON
RECORD, ARE ACCORDED RESPECT AND FINALITY BY THE
APPELLATE COURT.
II.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF
SUBSTANCE WHEN IT RULED THAT THE DISMISSAL OF PRIVATE
RESPONDENTS VICTOR DE GUZMAN AND ALLAN ANTHONY
ALVAREZ WERE ILLEGAL, CONTRARY TO THE FINDINGS OF BOTH
THE LABOR ARBITER AND NATIONAL LABOR RELATIONS
COMMISSION.
III.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF
SUBSTANCE WHEN IT COMPLETELY DISREGARDED THE
FINDINGS OF BOTH THE LABOR ARBITER AND THE NATIONAL
LABOR RELATIONS COMMISSION THAT PRIVATE RESPONDENT
VICTOR DE GUZMAN HAD WILLFULLY BREACHED THE TRUST
AND CONFIDENCE REPOSED ON HIM BY PETITIONERS WHEN HE
PREMATURELY DECLARED THE METAL [PURLINS] AS SCRAP
MATERIALS.
IV.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF
SUBSTANCE WHEN IT ACCEPTED HOOK [LINE] AND SINKER THE
CONTENTION OF RESPONDENT VICTOR DE GUZMAN THAT THE
TRANSACTION TO BUY THE STEEL [PURLINS] WAS BETWEEN STA.
ROSA BIBLE BAPTIST CHURCH AND SAROS TRUCKING SERVICES.
V.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF
SUBSTANCE WHEN IT DID NOT GIVE PROBATIVE VALUE TO THE
UNCONTROVERTED TESTIMONIES OF THE WITNESSES FOR THE
PETITIONERS WHO ALL GAVE THE DETAILS AND
CIRCUMSTANCES ON HOW PRIVATE RESPONDENT VICTOR DE
GUZMAN ABUSED HIS POSITION AS FACILITIES MANAGER AND
ISO COORDINATOR.
VI.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT IGNORED THE HOST OF JURISPRUDENTIAL
TENETS CITED BY BOTH THE LABOR ARBITER AND THE
NATIONAL LABOR RELATIONS [COMMISSION] SUPPORTING THE
TERMINATION OF VICTOR DE GUZMAN, A MANAGERIAL
EMPLOYEE, FOR WILLFULL BREACH OF TRUST AND CONFIDENCE.
VII.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF ITS
DISCRETION WHEN IT DISREGARDED THE FINDINGS OF BOTH THE
LABOR ARBITER AND THE NATIONAL LABOR RELATIONS
COMMISSION THAT PETITIONER ALLAN ANTHONY ALVAREZ
COMMITTED SERIOUS MISCONDUCT.[27]
According to the petitioners, the conclusions of the Labor Arbiter should be
respected, considering that he is in a better position to assess and evaluate the
evidence presented by the contending parties. Thus, the CA, in ruling for the
respondents, ignored a basic jurisprudential precept. The petitioners add that
since the respondents themselves admitted their culpability, such principle
should all the more be applied strictly in this case.
The petitioners also point out that the appellate court ignored the positive and
incontrovertible testimonies of their witnesses, which firmly established the
culpability of respondent De Guzman in prematurely declaring the steel
purlins as scrap materials. Furthermore, the SNK employees confirmed that
the steel purlins were still needed for the construction of a building; in fact,
Astillero and Balayan stated that they even prevented the employees of Saros
from loading them onto the truck. More damaging is the statement of
Victoriano, who narrated that it was only at around 2:00 p.m. of July 10, 1999
that he received a phone call from respondent De Guzman.
Contrary to the ruling of the appellate court, the witnesses for respondent De
Guzman, specifically the representative of Sta. Rosa, failed to prove that they
were the ones who personally transacted with Saros. The petitioners stress that
as the evidence would show, it was through respondent De Guzman that the
delivery of steel purlins to Sta. Rosa was made possible. They reiterate that
the respondent wanted to buy the steel purlins, since it was his precise
intention to sell them to Sta. Rosa. The petitioners point out that as shown by
his application for employment, respondent De Guzman is an active member
of the said Church.
The petitioners also point out that respondent De Guzman is not an ordinary
rank-and-file employee; he was the Facilities Manager, and concurrently, the
Coordinator of the ISO 14000 Secretariat. As such, respondent De Guzman
had the sensitive and confidential duty of managing the scrap disposal of
petitioner FCPP, and his actuations justified his dismissal based on willful
breach of trust.
Anent the case of respondent Alvarez, the petitioners assert that when he sent
the e-mail message to more than 150 Filipino and Japanese officers and
employees, there was a willful and malicious intent on his part to undermine
the on-going investigation of his superior, respondent De Guzman.
The petitioners conclude that the penalty imposed upon the respondents is
justified under the circumstances in the instant case.
In their comment, the respondents countered that as correctly held by the
appellate court, their dismissal from employment has no valid and just cause.
They stress that all the scrap metals were placed in the premises of petitioner
FCPP, and it was not respondent De Guzman who had determined whether
they could already be considered ready for disposal, but Machidori of SNK.
Moreover, it was Saros which sold the scrap materials to Sta. Rosa, and
respondent De Guzman had no participation therein. The respondents point
out that the issue raised before the Court is factual in nature, and as such,
contrary to the Rules of Court.
The primary issue for resolution in the present case is whether respondents De
Guzman and Alvarez were illegally dismissed from employment.
The Courts Ruling
The rule is that factual findings of quasi-judicial agencies such as the NLRC
are generally accorded not only respect, but at times, even
finality.[28] However, when it can be shown that administrative bodies grossly
misappreciated evidence of such nature as to compel a contrary conclusion,
the Court will not hesitate to reverse its factual findings. Factual findings of
administrative agencies are not infallible and will be set aside if they fail the
test of arbitrariness.[29] Thus, in this case where the findings of the CA differ
from those of the Labor Arbiter and the NLRC, the Court, in the exercise of its
equity jurisdiction, may look into the records of the case and re-examine the
questioned findings. As a corollary, this Court is clothed with ample authority
to review matters, even if they are not assigned as errors in their appeal, if it
finds that their consideration is necessary to arrive at a just decision of the
case.[30]
It is settled that to constitute a valid dismissal from employment, two
requisites must concur: (a) the dismissal must be for any of the causes
provided for in Article 282[31] of the Labor Code; and (b) the employee must
be afforded an opportunity to be heard and defend himself. This means that an
employer can terminate the services of an employee for just and valid causes,
which must be supported by clear and convincing evidence. It also means that,
procedurally, the employee must be given notice, with adequate opportunity to
be heard, before he is notified of his actual dismissal for cause.[32]
After a careful and painstaking study of the records of the case, the Court rules
that the respondents dismissal from employment was not grounded on any of
the just causes enumerated under Article 282 of the Labor Code.
The term trust and confidence is restricted to managerial employees.[33] In this
case, it is undisputed that respondent De Guzman, as the Facilities Section
Manager, occupied a position of responsibility, a position imbued with trust
and confidence. Among others, it was his responsibility to see to it that the
garbage and scrap materials of petitioner FCPP were adequately managed and
disposed of. Thus, respondent De Guzman was entrusted with the duty of
handling or taking care of the property of his employer, i.e., the steel purlins
which the petitioners allege the respondent prematurely declared as scrap
materials.
However, to be valid ground for dismissal, loss of trust and confidence 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. It must rest on substantial grounds
and not on the employers arbitrariness, whims, caprices or suspicion;
otherwise, the employee would eternally remain at the mercy of the
employer.[34] 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.[35]
The Court had the occasion to reiterate in Nokom v. National Labor Relations
Commission[36] the guidelines for the application of the doctrine of loss of
confidence-
a. loss of confidence should not be simulated;
b. it should not be used as a subterfuge for causes which are improper, illegal
or unjustified;
c. it may 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.[37]
In the case at bar, the grounds relied upon by petitioner FCPP in terminating
the employment of respondent De Guzman are contained in the Inter-Office
Memorandum dated August 23, 1999 which effectively terminated the latters
employment:
We have carefully evaluated your case and we are convinced that you have
committed grave abuse of authority amounting to serious misconduct and
willful breach of trust and confidence.
Based on our findings, as supported by strong and competent evidences, and
contrary to your explanation per your Letter dated July 26, 1999, the
following facts were satisfactorily established:
1. That sometime in the first week of July 1999, you intimated to Mr. Roberto
Pumarez, Supervisor of Saros Trucking Services, your intention to buy from
Saros the metals which were then piled up and kept inside the Fuji Electric
Philippines compound;
2. Thereafter, you ordered the metals to be sold to Saros Trucking Services so
that you can buy them (metals) later from Saros at the price of P3.00 per kg.,
which price you yourself imposed on them;
3. However, it turned out later some pieces of metals which you have earlier
declared as scraps and ordered to be sold to Saros were still to be used in the
construction of FCPPs Building B. Thus, on July 10, 1999, while Saros
employees were initially loading the metals, an Engineer of SNK Philippines,
Inc., FCPPs building contractor, stopped them. It was only later after they
were prevented from further loading the metals that you checked with the
SNK personnel if the metals can already be disposed of as scraps which prove
that you have prematurely declared the metals as scrap;
4. That through Mr. [Adrian] Camcaman, your subordinate Technician, you
instructed the personnel of Saros to deliver the metals to Sta. Rosa Baptist
Church, where you are an active Church member;
5. That, as of this date, you have not yet settled/paid your obligation to Saros.
That immediately after you were placed under preventive suspension and to
support your explanation that the transaction was between Saros and Sta. Rosa
Baptist Church, you caused, through some people representing to be members
of the Baptist Church and who are unknown to Saros, to issue a check in favor
of Saros. When this failed, another person, representing to be a member of the
Baptist church and who appeared for the first time, went to the office of Saros
and tried to serve a letter addressed to Mr. Larry Manaig, Saros Proprietor,
allegedly inquiring about the total obligation of the Baptist Church to Saros
but, which was again not accepted as, in truth and in fact, there was really no
transaction between Saros and the Sta. Rosa Baptist Church. All along, it was
you and Mr. Camcaman who dealt directly with Saros.
6. That in previous occasions, it was reported by Mr. Manaig that you
solicited from him empty drums, pails and corrugated cartons which were all
part of those scraps picked up from FCPP and you never paid any of them, a
fact which you never denied in your explanation which is tantamount to
admission.
Based on the foregoing, it is our well-discerned view that the transaction was
exclusively limited between you and Saros. Except for your self-serving
explanation, you failed miserably to present direct evidence that it was the Sta.
Rosa Baptist church which bought the subject metals from Saros, as what you
want us to believe. At best, your explanation is a mere afterthought
desperately concocted to exculpate yourself.
As Facilities Manager, a very sensitive and confidential position, the nature of
your work demands of you that your actions should not be tainted with any
suspicion or impropriety. However, you failed in this regard and abused your
position to advance your self-interest.
In view of the foregoing, you are hereby terminated from the service,
retroactive July 24, 1999, the date you were placed under preventive
suspension. Please proceed to the Finance and Accounting Department to
clear yourself from any accountability and to claim whatever unpaid salaries
and benefits which are still due you as of this date.
For your information and guidance.[38]
Based on the foregoing, the Court finds and so holds that indeed, the
petitioners reliance on the foregoing facts to justify the dismissal of
respondent De Guzman from employment is misplaced.
First. The scrap metals, including the steel purlins, were already classified as
scrap materials and ready for disposal. No less than the written statements of
the witnesses for the petitioners confirm this. SNK Mechanical Supervisor Nat
Balayan stated that the 10-wheeler truck was about to load scrap irons, which
includes c-[purlins]. Knowing that c-[purlins] could be used for braces of
heap-filter box hangers, I immediately informed Mr. Machidori if I would
stop the hauling, to which he consented. On the other hand, SNK Engineer
Maurice Victoriano stated that when respondent De Guzman called him and
inquired whether the scrap materials at the Fuji Electric Warehouse Area
could already be disposed of, he (Victoriano) replied that everything was
[okay] for disposal considering that this is [FCPPs] scope. The report of
Machidori is particularly revealing:
I went to Fuji Electric Warehouse last July 10 (rainy day) to check [out]
Warehouse situation. I noticed that scrap materials are being carried out by a
truck. I met Mr. Adrian Fujitsu Facilities Staff and asked me that they will
take out those scrap materials. SNK Staff suggested using those scrap
materials for BIF Hepa Box steel supports. So I requested Mr. Adrian
[Camcaman] to separate some materials that we want to use and take out
[the] others.
During our Construction meeting, Facilities explained that they controlled
scrap and unpacked materials for disposal. Earlier I thought that taking out
those materials are good for maintaining Fuji Electric Warehouse Area. So I
requested them to take out those unrecycled materials.[39]
Thus, the Court agrees with the following ratiocination of the appellate court
when it denied the petitioners motion for reconsideration of its decision:
[T]his Court would like to stress, as borne out by the pleadings submitted by
both parties, that the subject scrap metal [purlins] were already in the scrap
yard ready for hauling. It was the building contractor and not petitioner Victor
de Guzman who determined whether the metals are scrap metals. Hence, the
assertion of the private respondents that petitioner Victor de Guzman
prematurely declared the metal [purlins] as scrap materials is without basis.[40]
In fine then, the materials at the said warehouse were already considered scrap
and ready for disposal. The hauling was stopped by the SNK employees
because their superiors felt that pieces of steel purlins could still be used in the
construction of a building in the company premises. Thus, Victoriano and
Balayan, with the conformity of their superior Machidori, requested that some
pieces be left behind for the purpose.
Second. No fraud or bad faith could be attributed to respondent De Guzman,
as evinced by his readiness to disclose his participation in the transaction
between Saros and Sta. Rosa.
Third. Respondent De Guzman was never charged with qualified theft as
earlier alluded to by the petitioner FCPP in its Inter-Office Memorandum
dated August 28, 1999.
Fourth. The focal point of the cause of respondent De Guzmans dismissal
from employment is his alleged involvement in the purchase of the steel
purlins from petitioner FCPPs warehouse. Whether respondent De Guzman
was the buyer of the steel purlins or merely facilitated the sale thereof to Sta.
Rosa is of no moment. The fact is that as per the Garbage Collection
Agreement dated January 15, 1999, the scrap metals in the premises of
petitioner FCPP were regularly bought by Saros. Hence, after such scrap
materials are weighed, loaded onto a truck and carried out of the company
premises, the petitioner FCPP can no longer be considered the owner thereof,
and ceases to exercise control over such property.[41] Loss of trust and
confidence as a just cause for termination of employment is premised on the
fact that the employee concerned is invested with delicate matters, such as the
handling or care and protection of the property and assets of the
employer.[42] In this case however, Saros, as the new owner of the scrap
materials in question, including the steel purlins, was free to contract with
anyone as it wished. At most, respondent De Guzman was merely
recommending a buyer for such scrap materials, an act which could hardly be
considered as deserving of such a harsh penalty as dismissal from
employment.
What strikes the Court as odd in this case is that petitioner FCPP willingly
believed the testimony of third persons, non-employees, rather than the
account of its own employee. There has been no allegation that respondent De
Guzman had been previously found guilty of any misconduct or had violated
established company rules. Moreover, it is difficult to believe that respondent
De Guzman would jeopardize his job for something as measly as steel
purlins.[43]
The Court thus concludes that respondent De Guzmans actuations do not
amount to willful breach of trust and confidence. It bears stressing that in
termination cases, the employer bears the onus of proving that the dismissal
was for just cause.[44] Indeed, a condemnation of dishonesty and disloyalty
cannot arise from suspicions spawned by speculative inferences.[45] Because
of its subjective nature, this Court has been very scrutinizing in cases of
dismissal based on loss of trust and confidence because the same can easily be
concocted by an abusive employer. Thus, when the breach of trust or loss of
confidence theorized upon is not borne by clearly established facts, as in this
case, such dismissal on the ground of loss of confidence cannot be
allowed.[46] Moreover, the fact that one is a managerial employee does not by
itself exclude him from the protection of the constitutional guarantee of
security of tenure.[47]
The Court likewise rules that the dismissal of respondent Alvarez from
employment for gross misconduct was illegal.
The Court has had varied rulings in cases involving gross misconduct as a
ground for dismissal, depending on the circumstances of each case. In Zenco
Sales, Inc. v. National Labor Relations Commission,[48] the Court affirmed the
NLRC and the Labor Arbiter in finding the dismissed employee guilty of
misfeasance for his failure to closely monitor and control the sales
transactions of salesman Chua and malfeasance because he used the
respondent corporations properties, equipment and personnel in connection
with his personal business of buy and sale of used sacks. The Court ruled that
when brought within the ambit of Article 282 of the Labor Code, it constitutes
gross neglect in the performance of duty and serious misconduct resulting to
loss of trust and confidence.[49] In Philippine National Construction
Corporation v. NLRC,[50] the dismissed employees were caught in the act of
accepting a bribe in the form of cash and a dog from a motorist who was
suspected of illegally transporting dogs. The Court held that by yielding to
bribery, the said employees violated their very duty to maintain peace and
order in the North Luzon Expressway, and to ensure that all tollway rules and
regulations were followed. Such act was classified as serious misconduct
which warranted the penalty of dismissal from employment.[51] In another
case,[52] the Court considered a dismissed faculty members act of exerting
influence and pressure to change a failing grade to a passing one and the
misrepresentation that a student was his nephew as serious misconduct, and a
valid ground for dismissal.
However, in the old case of Radio Communications of the Philippines, Inc. v.
NLRC,[53] the Court considered the dismissed employees act of hurling
invectives at a co-employee as a minor offense. The Court therein ruled that
the termination of an employee on account of a minor misconduct is illegal
because Article 282 of the Labor Code mentions serious Misconduct as a
cause for cessation of employment.[54]
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.[55] 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
employees work to constitute just cause for his separation[56]. Thus, for
misconduct or improper behavior to be a just cause for dismissal, (a) it must
be serious; (b) must relate to the performance of the employees duties; and (c)
must show that the employee has become unfit to continue working for the
employer.[57] Indeed, an employer may not be compelled to continue to
employ such person whose continuance in the service would be patently
inimical to his employers interest.[58]
In this case, the Court finds that respondent Alvarezs act of sending an e-mail
message as an expression of sympathy for the plight of a superior can hardly
be characterized as serious misconduct as to merit the penalty of dismissal.
This can be gleaned from a perusal of the e-mail message itself, to wit:
Question: Where is Mr. De Guzman, Facilities Manager?
Answer: He was framed-up by Saros Trucking (FCPP garbage hauler) and
[accused] of manipulating scrap metal which is not true since the church buyer
and Saros agreed for a fee of P3.00/kg. [where] Saro will profit P0.40/kg plus
hauling fee.
Question: WHY?
Answer: Mr. De Guzman was able to improve the waste management wherein
Saro have to pay close to P0.25 million pesos for June scrap alone against
Saros previous collection of around P15,000/month only.
THE PLOT IS OBVIOUS BUT IS IT JUST TO SUSPEND A GOOD MAN
LIKE MR. DE GUZMAN THAN A GARBAGE HAULER WHO
DEVILISHLY [PROFITED] FROM FCPP WITHOUT SWEAT? PLS. HELP
US[59]
There is no showing that the sending of such e-mail message had any bearing
or relation on respondent Alvarezs competence and proficiency in his job. To
reiterate, in order to consider it a serious misconduct that would justify
dismissal under the law, the act must have been done in relation to the
performance of his duties as would show him to be unfit to continue working
for his employer.[60] Moreover, while allegations of a frame-up were made
against Saros, the e-mail message does not contain a single malicious
imputation or charge against petitioner FCPP, or petitioner Espinosa.
Instructive on this point is the discussion of the Court in Samson v. National
Labor Relations Commission,[61] viz.:
The instant case should be distinguished from the previous cases where we
held that the use of insulting and offensive language constituted gross
misconduct justifying an employees dismissal. In De la Cruz v. NLRC (177
SCRA 626 [1989]), the dismissed employee shouted sayang and pagka-
professional mo! and putang ina mo at the company physician when the latter
refused to give him a referral slip. In Autobus Workers Union (AWU) v.
NLRC (291 SCRA 219 [1998]), the dismissed employee called his
supervisor gago ka and taunted the latter by saying bakit, anong gusto mo,
tang ina mo. In these cases, the dismissed employees personally subjected
their respective superiors to the foregoing verbal abuses. The utter lack of
respect for their superiors was patent. In contrast, when petitioner was heard
to have uttered the alleged offensive words against respondent companys
president and general manager, the latter was not around.
In Asian Design and Manufacturing Corporation v. Deputy Minister of
Labor (142 SCRA 79 [1986]), the dismissed employee made false and
malicious statements against the foreman (his superior) by telling his co-
employees: If you dont give a goat to the foreman you will be terminated. If
you want to remain in this company, you have to give a goat. The dismissed
employee therein likewise posted a notice in the comfort room of the company
premises which read: Notice to all Sander Those who want to remain in this
company, you must give anything to your foreman. Failure to do so will be
terminated Alice 80. In Reynolds Philippine Corporation v. Eslava (137
SCRA 259 [1985]), the dismissed employee circulated several letters to the
members of the companys board of directors calling the executive vice-
president and general manager a big fool, anti-Filipino and accusing him of
mismanagement, inefficiency, lack of planning and foresight, petty favoritism,
dictatorial policies, one-man rule, contemptuous attitude to labor, anti-Filipino
utterances and activities. In this case, the records do not show that petitioner
made any such false and malicious statements against any of his superiors.[62]
In fine, the petitioners failed to show that the respondents acts were sufficient
to warrant their dismissal from employment, for loss of trust and confidence
on one hand for respondent De Guzman, and for gross misconduct as against
respondent Alvarez on the other. To reiterate, it has not been shown that the
respondents had been previously found guilty of any infraction of company
rules and regulations during the period of their employment.
Under Article 279 of the Labor Code, and employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights
and other privileges, and to the payment of 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 (which, as a rule, is
from the time of his illegal dismissal) up to the time of his actual
reinstatement.[63] These remedies give life to the workers constitutional right
to security of tenure.[64]
The Court is wont to reiterate that while an employer has its own interest to
protect, and pursuant thereto, it may terminate a managerial 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 the said prerogative, what is at stake is not only the
employees position, but his very livelihood.[65] The Constitution does not
condone wrongdoing by the employee; nevertheless, it urges a moderation of
the sanction that may be applied to him.[66] Where a penalty less punitive
would suffice, whatever missteps may have been committed by the worker
ought not be visited with a consequence so severe as dismissal from
employment.[67] Indeed, the consistent rule is that if doubts exist between the
evidence presented by the employer and the employee, the scales of justice
must be tilted in favor of the latter. The employer must affirmatively show
rationally adequate evidence that the dismissal was for justifiable cause.[68]
WHEREFORE, the instant petition is DENIED. The assailed Decision of the
Court of Appeals in CA-G.R. SP No. 71324 and the Resolution dated May 14,
2003 are AFFIRMED. Costs against the petitioners.
SO ORDERED.