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G.R. No. 111934 April 29, 1998 JUDY PHILIPPINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and VIRGINIA ANTIOLA, respondents. This petition for certiorari assails the Decision 1 dated June 30, 1993 of the National Labor Relations Commission ordering petitioner to reinstate private respondent Virginia Antiola, with one year backwages; and the Order 2 dated August 30, 1993 denying the motion for reconsideration. The challenged ruling reversed the decision dated April 26, 1990 of Labor Arbiter Arturo V. Casuco dismissing the complaint for unfair labor practice and illegal dismissal for lack of merit. 3 The facts which gave rise to this petition are as follows: Virginia Antiola was employed by petitioner Judy Philippines, Inc. in the latter's export business since January 1985. In the course of such employment, she worked as an assorter of baby infant dresses with a daily salary of P69.00 up to January 11, 1989. On November 15, 1988, Virginia Antiola was directed by Marietta Elizon, her supervisor, to sort out baby infant dresses pursuant to an instruction sheet. On January 4, 1989, petitioner, thru its Personnel Manager, Mrs. Lolita Agus, required private respondent to explain in writing why she should not be meted disciplinary sanctions for her erroneous assortment and packaging of 2,680 dozens of infant wear. On the same day, she submitted her written explanation, admitting her error and pleading that "Kaya inihihingi ko po nang paumanhin ang aking pagkakamali." 4 Similarly on January 24, 1989, Marietta Elizon, private respondent's supervisor and Ester Rellesiva, the packer, received a memo requiring them to explain why they should not be penalized, Marietta Elizon submitted her explanation on February 2, 1989 5 and Ester Rellesiva on January 25, 1989. 6 Petitioner found private respondent guilty of negligence and she was dismissed from employment effective January 11, 1989, Marietta Elizon, on the other hand, was suspended from employment for one (1) month effective February 12, 1989 on the ground of negligence through command responsibility. Ester Rellesiva was found innocent on the ground that when she undertook the packing of the infant wear, the same were already sealed in black plastic bags and could no longer be checked. The National Federation of Labor Union (NAFLU), in behalf of Virginia Antiola, filed a complaint for unfair labor practice and illegal dismissal against Judy Philippines, Inc. and Lolita Z. Agus. NAFLU alleged that the dismissal of Virginia Antiola was unjustified because the infant wear erroneously assorted by Antiola should not have been shipped to the buyer had the company's supervisor and the buyer's quality comptroller exercised due diligence in the performance of their duties in ensuring that the goods were properly assorted. NAFLU assert that the act of petitioner in dismissing private respondent Antiola is a manipulative scheme designed to support its deliberate attempt to get rid of her from the service. Petitioner countered that instead of following the written instruction of her supervisor, private respondent deviated therefrom which resulted in erroneous packaging of the infant wear. Thus, petitioner, avers that the dismissal of private respondent Antiola was valid and lawful, premised on the ground of negligence. The Labor Arbiter's decision rendered on April 26, 1990 found the dismissal justified, viz: Upon careful study and perusal of the entire records of the instant case this office is inclined to uphold the act of the petitioner on dismissing individual complainant, as lawful, premise on the ground of fault and negligence causing an irreparable damage to the goodwill of the petitioners' business, especially considering that the latter is an export oriented entity. For more than one and one half months (1 1/2) from November 15, 1988 up to January 4, 1989 while she, individual complainant, was in the process of sorting the finished products she failed to notice the errors she had been committing. She had neglected her duty to check for herself her accomplishment whether or not it tallys with the written instruction of her supervisor in her possession. She admitted in her own written admission that she failed to check her errors and that she really committed the erroneous assortment since the very beginning. The claim of complainants that the act of petitioner in dismissing individual claimant is discriminatory, tainted with unfair labor practice, on the ground that supervisor, Marietta Elizon, was made to suffer only one month suspension while individual claimant was punished too severely by dismissal, is untenable. The degree responsibility between individual claimant and supervisor can not be the same. The wrongful act was committed by complainant while her supervisor was merely remiss of her duty to supervise complainant. In the case of Edwin Estabillo, the buyer's quality controller, he is checking the quality of the infants wear and not specification. In addition, he is not an employee of the herein petitioner under which the latter may impose appropriate discipline. Concerning complainants claim that Virginia Antiola was not accorded due process before she was dismissed, records show that complainant Antiola was required to explain in writing within (20) hours why she should not be meted any disciplinary action for her negligence, that of having assorted the goods erroneously and contrary to the instruction given her. Complainant Antiola in compliance with the memorandum, submitted her written admission of guilt, which in turn became the basis of the petitioner in terminating her service. On the basis of the foregoing

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circumstance, this Labor Arbiter is of the view that due process mandated under B.P. 130 is substantially satisfied. There is no need for a hearing because herein individual claimant has pleaded guilty. While it is true that individual complainant has committed the infraction for the first time, as the records will show, and that she has voluntarily admitted guilt, it could not likewise be denied that respondent company suffered substantial losses brought about by individual complainant's wrongful act. She should have checked her accomplishment against the written instruction of her supervisor, before turning over the same to the packer for the packing. Let it be recalled that before turning over the assorted goods to the packer, it is already packed in black plastic bags presumably by individual complainant herself. Regrettably, the latter failed to exercise due diligence in the performance of her assigned tasks. Much as we are bound to uphold the right of workers to security of tenure, we cannot, as in this case, deny capital its prerogative to exercise its inherent power to discipline its workers. WHEREFORE, premises considered, let the instant case be, as it is hereby DISMISSED for lack of merit. SO ORDERED. 7 Private respondent appealed to the National Labor Relations Commission. In reversing the decision of the labor arbiter, the NLRC said that: The most, arguendo, that may be said against complainant here is that in failing "to exercise due diligence in the performance of her assigned task(s),' she committed "Gross . . . neglect" in the performance of her duty. But pertinently, Article 282(b) of the Labor Code requires that to qualify as a valid cause for dismissal such neglect must not only be gross, it should be "Gross and habitual neglect" in character. Noting that the Labor Arbiter, himself admits that "individual complainant has committed the infraction for the first time, as the records will show" (Decision, p. 6 Record, p. 54), we thus rule that the penalty of dismissal is quite severe here. Against the backdrop that the complainant was dismissed on January 12, 1989 and has been deprived by petitioner company of wages for about three years and four months, we opine that an award of reinstatement plus one year backwages will suffice. WHEREFORE, the appealed decision is hereby set aside. The respondents are hereby directed to reinstate complainant with backwages limited to one year. SO ORDERED. 8 Petitioner's motion for reconsideration and/or appeal was denied in an Order dated August 30, 1993. Since the 10-day period provided in Article 223 of the Labor Code refers to ten calendar days and not to ten working days, this means that Saturdays, Sundays and Legal Holidays are not to be excluded, but included, in the computation of the 10Hence, this petition for review, the petitioner contending that: I THE NLRC SERIOUSLY ERRED, AS A MATTER OF LAW, IN NOT HOLDING THAT UNDER ARTICLE 223 OF THE LABOR CODE THE APPEAL FILED BY PRIVATE RESPONDENT TO THE NATIONAL LABOR RELATIONS COMMISSION FROM THE DECISION OF LABOR ARBITER ARTURO V. CASUCO WAS FILED BEYOND THE REGLEMENTARY PERIOD AND THAT THE SAID DECISION OF LABOR ARBITER CASUCO HAD ALREADY BECOME FINAL AND EXECUTORY. II ASSUMING FOR THE SAKE OF ARGUMENT THAT THE DECISION OF LABOR ARBITER ARTURO CASUCO HAD NOT YET BECOME FINAL AND EXECUTORY AND THAT PRIVATE RESPONDENT'S APPEAL COULD BE ENTERTAINED, THE NATIONAL LABOR RELATIONS COMMISSION SERIOUSLY ERRED AS A MATTER OF LAW IN HOLDING THAT THE OFFENSE COMMITTED BY PRIVATE RESPONDENT DID NOT CONSTITUTE A JUST CAUSE FOR DISMISSAL UNDER ARTICLE 282 OF THE LABOR CODE. On the question of whether or not the appeal before the National Labor Relations Commission had been seasonably made, we rule in favor of private respondent. Petitioner contends that private respondent received a copy of the Decision of Labor Arbiter Arturo Casuco on May 2, 1990. She had therefore, ten calendar days therefrom, or until May 12, 1990, to file her appeal to the NLRC. However, she filed her appeal only on May 14, 1990, or two days beyond the reglementary period. 9 Petitioner points out that the appeal was filed out of time and should be dismissed. It is admitted that private respondent Antiola received the labor arbiter's decision on May 2, 1990. Under Article 223 of the Labor Code, as amended, the period to appeal to the Commission is ten (10) calendar days, to wit: Art. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards or orders. xxx xxx xxx

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day period. This is in line with the objective of the law for speedy disposition of labor cases with the end in view of protecting the interest of the working man. 10 In subsequent cases, We ruled that if the tenth day to perfect an appeal from the decision of the Labor Arbiter to the NLRC falls on a Saturday, the appeal shall be made on the next working day, 11 as embodied in Section 1, Rule VI of the NLRC Rules of Procedure promulgated on January 14, 1992. This conclusion arrived at by the Court recognizes the fact that on Saturdays the offices of NLRC and certain post offices are closed. Private respondent filed her appeal on the twelfth calendar day following receipt of the copy of the labor arbiter's decision, since the tenth day, May 12, 1990, is a Saturday. 12 Following the above enunciated doctrine, the filing of the appeal on May 14, 1990, the next working day, is considered to be within the reglementary period provided for by law, hence, seasonably made. Even assuming arguendo that the appeal was filed beyond the period allowed by law, We have at times overlooked this particular procedural lapse. In the case of Firestone Tire and Rubber Co. v. Larosa 13 and reiterated in Chong Guan Trading vs. NLRC 14 this Court allowed the filing of appeals from the decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice. Thus, technical rules of procedure in labor cases are not to be strictly applied if the result would be detrimental to the working man. 15 Technicality should not be permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties. 16 Moreover, under Article 218 (c) of the Labor Code, the Commission is empowered to "correct, amend, or waive any error, defect or irregularity whether in substance or form," in the exercise of its appellate jurisdiction. Therefore, We find no grave abuse of discretion on the part of the NLRC in entertaining the appeal of private respondents, even if, as alleged by petitioner, it was filed two days late. The Constitution guarantees the right of workers to "security of tenure." 17 In upholding the same, Article 277 (b) in relation to Section 1 of Rule XIV (Book Five) of the Labor Code, requires the existence of a valid to justify the termination of an employee. Without a valid cause, dismissal of employees may not properly be done. While it is true that the decision to dismiss or lay off an employee is management's prerogative, it must be made without abuse of discretion, for what is at stake is not only the employee's position but also his means of livelihood. 18 Therefore, he should be protected against any arbitrary deprivation of his job. 19 At any rate, where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's concern for the workingmen. There is, in addition, his family to consider. Unemployment brings about hardships and sorrows on those dependent on the wageearner. The misery and pain attendant to the loss of jobs then could be avoided if there be acceptance of the view that under all circumstances of a case the workers should not be deprived of their means of livelihood. 20 Petitioner anchors its right to terminate the employment of Virginia Antiola on the ground of "gross neglect of duties," under Article 282 (b) of the Labor Code. Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. 21 We affirm the finding of the NLRC that "Article 282 (b) of the Labor Code requires that . . . such neglect must not only be gross, it should be 'Gross and habitual neglect' in character." As aptly pronounced by the NLRC, "the penalty of dismissal is quite severe here" noting that the labor arbiter himself admits that she committed the infraction for the first time. Considering that private respondent worked with the company for four years with no known previous bad record, the ends of social and compassionate justice would be better served if she was merely suspended from work rather than terminated. We are not, however, unmindful of the negligence committed by respondent Antiola. The employer's obligation to give his workers just compensation and treatment carries with it the corollary right to expect from the workers adequate work, diligence and good conduct. Nonetheless, private respondent's wrongdoing does not warrant dismissal inasmuch as dismissal is the ultimate penalty that can be meted to an employee. 22 In view of the foregoing, We rule that Judy Philippines, Inc. had no valid cause to dispense with the services of private respondent. We shall now deal with the consequences that should visit the petitioner for illegally dismissing private respondent Virginia Antiola. Under the law, 23 an employee is entitled to reinstatement and to his full backwages when he is unjustly dismissed. Note, however, that reinstatement and backwages are separate and distinct reliefs given to an illegally dismissed employee. 24 Reinstatement means restoration to a state or condition from which one had been removed or separated. 25 One who is reinstated assumes the position he had occupied prior to the dismissal and is, as an ordinary rule, entitled only to the last salary in that position. 26 Backwages, on the other hand, is a form of relief that restores the income that was lost by reason of unlawful dismissal. 27 Public respondent NLRC deemed it proper to order the reinstatement of private respondent Virginia Antiola. We find no cogent reason to set aside public respondent's findings on this matter. Be that as it may, we cannot sustain the ruling of public respondent in awarding backwages limited to one year.

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Republic Act No. 6715, which took effect on March 21, 1989, amended Article 279 of the Labor Code, provides that an illegally dismissed employee is entitled to 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. 28 We have ruled, however, that this amendment has no retroactive effect. In such case, theaward of backwages to an employee whose illegal dismissal occurred before March 21, 1989, is limited to a period of three (3) years without deduction or qualification. 29 Following the above enunciated doctrine, the dismissal of Virginia Antiola having been effected on January 11, 1989, entitles her to backwages for a period of three (3) years, without deduction or qualification. WHEREFORE, the decision of public respondent National Labor Relations Commission dated June 30, 1993 is hereby AFFIRMED subject, however, to modification that petitioner Judy Philippines, Inc. be ordered to pay private respondent Virginia Antiola backwages for a period of three (3) years, without qualification or deduction. SO ORDERED. G.R. No. 165268 November 8, 2005 Challenge socks corporation, Petitioner, vs. COURT OF APPEALS (Former First Division), NATIONAL LABOR RELATIONS COMMISSION (First Division), HON. ANTONIO R. MACAM, in his capacity as Labor Arbiter and ELVIE BUGUAT, Respondents. This petition for review on certiorari under Rule 45 of the Rules of Court assails the May 11, 2004 Decision1 of the Court of Appeals in CA-G.R. SP No. 75761, and its September 13, 2004 Resolution2 denying the motion for reconsideration. The antecedent facts show that respondent Elvie Buguat was hired on January 17, 1997 by petitioner Challenge Socks Corporation as knitting operator.3 In the course of her employment, she incurred absences and tardiness without prior approval and had been neglectful of her duties.4 On May 25, 1998, she failed to check the socks she was working on causing excess use of yarn and damage to the socks design. She was suspended for five days and warned that a repetition of the same act would mean dismissal from the service.5 On February 2, 1999, she committed the same infraction and was given a warning.6 Despite the previous warnings, Buguat continued to be habitually absent and inattentive to her task. On March 1, 1999, she again failed to properly count the bundle of socks assigned to her. Thus, on March 2, 1999, petitioner terminated her services on grounds of habitual absenteeism without prior leave, tardiness and neglect of work.7

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Thereafter, Buguat filed a complaint for illegal dismissal.8 On February 11, 2000, the labor arbiter9 rendered a Decision10 holding that Buguat was illegally dismissed. The dispositive portion of the decision reads: WHEREFORE, following the pronouncement in the case of ALU-TUCP v. NLRC (G.R. No. 120450, February 10, 1999), judgment is hereby rendered ordering respondents to reinstate complainants without loss of seniority rights and benefits, but without backwages. SO ORDERED.11 The labor arbiter found Buguats dismissal too harsh and disproportionate to the infraction committed. It was observed that counting volumes of socks is tedious and the worker is prone to commit mistakes especially if the counting is done on a regular basis. The labor arbiter ruled that mistake in counting bundles of socks is tolerable and should be punished by suspension only.12 The National Labor Relations Commission (NLRC) adopted the findings of the labor arbiter. It denied13 petitioners appeal and motion for reconsideration. Petitioner filed a petition for certiorari before the Court of Appeals which rendered a Decision on May 11, 2004 reversing and setting aside that of the labor arbiter and the NLRC, the dispositive portion of which provides: WHEREFORE, the Decision dated October 30, 2001 and the Order of December 19, 2002 of the National Labor Relations Commission are hereby REVERSED and SET ASIDE and a new one entered herein. CHALLENGE SOCKS CORPORATION, having terminated private respondent with just and valid cause but without observing the proper procedure in terminating private respondents services, is ordered to pay ELVIE BUGUAT full backwages from the time her employment was terminated on March 2, 1999 up to the time the herein decision becomes final. For this purpose, this case is REMANDED to the Regional Labor Arbiter for the computation of the backwages due private respondent. SO ORDERED.14 The appellate court found that there was just cause for terminating the services of Buguat considering the series of infractions she committed.15 However, it was noted that petitioner failed to comply with the twin-notice requirement in terminating an employee hence, the dismissal was considered ineffectual.16 Petitioner was ordered to pay Buguat her back wages computed from the time of her dismissal up to the finality of the decision.17 Petitioner sought reconsideration of the appellate courts decision but the same was denied on September 13, 2004. Hence, this petition. The issue for resolution is the validity of Buguats termination. One of the just causes for terminating an employment under Article 282 of the Labor Code is gross and habitual neglect by the employee of her duties. This cause includes gross inefficiency, negligence and carelessness. Such just causes is derived from the right of the employer to select and engage his employees.18 In the instant case, there is no doubt that Buguat was habitually absent, tardy and neglectful of her duties. We agree with the Court of Appeals that: Elvies commission of three (3) violations of the companys rules and regulations, including her unauthorized absences and tardiness, all committed in the span of two years, shows that she did not only fail to observe due diligence in performing her job, but she has little regard for the consequences of her acts and inactions. She repeatedly committed error in counting the socks to be given to the Looping Section. As a knitting operator, Elvie was required to check the socks she was working on and to count the bundles of socks she had to pack to be forwarded to the Looping Section. Elvie did not question the authenticity of the May 25, 1998 suspension letter and the February 2, 1999 memorandum. While a first violation could be considered excusable, repeated commission of the same offense could be considered willful disobedience. Elvie, despite the suspension and warning, continued to disregard the company rules and regulations.19 Habitual neglect implies repeated failure to perform ones duties for a period of time. Buguats repeated acts of absences without leave and her frequent tardiness reflect her indifferent attitude to and lack of motivation in her work. Her repeated and habitual infractions, committed despite several warnings, constitute gross misconduct. Habitual absenteeism without leave constitute gross negligence and is sufficient to justify termination of an employee.20 We find the penalty of dismissal from the service reasonable and appropriate to Buguats infraction. Her repeated negligence is not tolerable; neither should it merit the penalty of suspension only. The record of an employee is a relevant consideration in determining the penalty that should be meted out.21 Buguat committed several infractions in the past and despite the warnings and suspension, she continued to display a neglectful attitude towards her work. An employees past misconduct and present behavior must be taken together in determining the proper imposable penalty.22 The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee. The offenses committed by him should not be

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taken singly and separately but in their totality. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and independent of each other.23 It is the totality, not the compartmentalization, of such company infractions that Buguat had consistently committed which justified her dismissal.24 Besides, terminating an employment is one of petitioners prerogatives. As the employer, petitioner has the right to regulate, according to its discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.25 This Court has upheld a companys management prerogatives so long as they are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements.26 In the case at bar, petitioner exercised in good faith its management prerogative as there is no dispute that Buguat had been habitually absent, tardy and neglectful of her work, to the damage and prejudice of the company. Her dismissal was therefore proper. The law imposes many obligations on the employer such as providing just compensation to workers, observance of the procedural requirements of notice and hearing in the termination of employment. On the other hand, the law also recognizes the right of the employer to expect from its workers not only good performance, adequate work and diligence, but also good conduct and loyalty. The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to his interests.27 The employer has the burden of proving that the dismissed worker has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought, and (2) the other to inform him of his employers decision to dismiss him.28 As found by the Court of Appeals, petitioner failed to comply with this requirement, thus: A review of the records shows that private respondent was served a written termination notice on the very day she was actually dismissed from the service. The case records are bereft of any showing that Challenge Socks Corporation notified Elvie in advance of the charge or charges against her. Likewise, she was not given an opportunity to refute the charges made against her, thus, depriving her of the right to defend herself. In other words, petitioner fell short in observing the two-notice rule required by law.29 In Agabon v. National Labor Relations Commission,30 we upheld as valid the dismissal for just cause although it did not comply with the requirements of procedural due process. We ruled that while the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.31 The violation of Buguats right to statutory due process by the petitioner warrants the payment of indemnity in the form of nominal damages in the amount of P30,000, which is appropriate under the circumstances.32 Conformably, the award of backwages in the present case should be deleted. Instead, private respondent should be indemnified in the amount of P30,000.00 as nominal damages.33 WHEREFORE, the May 11, 2004 Decision and the September 13, 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 75761, which declared that petitioner Challenge Socks Corporation did not comply with the statutory due process requirements in terminating the employment of private respondent Elvie Buguat, are AFFIRMED with the MODIFICATION that the award of backwages is DELETED. Petitioner is ordered to pay private respondent Elvie Buguat nominal damages in the amount of P30,000.00. No costs.

G.R. No. 146621

July 30, 2004

RENE P. VALIAO, petitioner, vs. HON. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION-FOURTH DIVISION (Cebu City), WEST NEGROS COLLEGE, respondents. For review on certiorari is the Decision1 dated August 22, 2000 of the Court of Appeals in CA-G.R. SP No. 55133, and its Resolution2 dated November 22, 2000 denying the motion for reconsideration. The Court of Appeals dismissed the petition for certiorari filed by petitioner and affirmed the Resolution dated July 7, 1999 of the National Labor Relations Commission (NLRC)-Fourth Division in NLRC Case No. V-000134-98 (RAB Case No. 06-01-10026-95), which sustained the Decision of Labor Arbiter Benjamin E. Pelaez, directing private respondent West Negros College (WNC) to pay petitioner Rene P. Valiaos salary during the period of his preventive suspension and attorneys fees, while dismissing all other claims. The facts, as culled from records, are as follows: On February 5, 1990, petitioner Rene Valiao was appointed by private respondent West Negros College (WNC) as Student Affairs Office (SAO) Director, with a starting salary of P2,800 per month. On May 14, 1990, he was assigned as Acting Director, Alumni Affairs Office. On July 29, 1990, petitioner was transferred to a staff position and designated as Records Chief at the Registrars Office but was again re-assigned as a typist on June 24, 1991. The latest re-assignment was due to his tardiness and absences, as reflected in the summary of tardiness and absences report, which showed him to have been absent or late for work from a minimum of seven (7) to a maximum of seventy-five (75) minutes for the period March to October 31, 1991, and to have reported late almost every day for the period November to December 1991. Copies of his tardiness/absences reports were furnished petitioner, along with memoranda requiring him to explain but his explanations were either unacceptable or unsatisfactory. Subsequent reports also showed that he did not change his habits resulting in tardiness and absences. He was even caught one time manipulating the bundy clock, thus necessitating another memorandum to him asking him to explain his dishonest actuations in accomplishing the daily attendance logbook and in using the bundy clock.

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On December 10, 1991, petitioner received a suspension order without pay for fifteen (15) days effective January 1, 1992, because of dishonesty in reporting his actual attendance. After serving the suspension, the petitioner reported back to office on January 16, 1992. On June 15, 1992, another adverse report on tardiness and absences from the Registrar was made against the petitioner prompting WNC to send him another memorandum with an attached tardiness and absences report, calling his attention on his tardiness and absences for the period February to April 1992. On June 20, 1992, petitioner sent a letter of appeal and explained his side to the new college president, Suzette Arbolario-Agustin, who gave petitioner another chance. The petitioner was then appointed as Information Assistant effective immediately. However, the petitioner did not immediately assume the post of Information Assistant prompting the President of private respondent WNC to call his attention. When the petitioner finally assumed his post, he was allowed a part-time teaching job in the same school to augment his income. Sometime in December 1992, WNC won a case against the officials of the union before the NLRC. Petitioner was ordered to prepare a media blitz of this victory but the petitioner did not comply with the order on the ground that such a press release would only worsen the already aggravated situation and strained relations between WNC management and the union officials. When petitioner reported for work on the first day of January 1993, he was relieved from his post and transferred to the College of Liberal Arts as Records Evaluator. Not for long, the Dean of the Liberal Arts sent a letter to the Human Resources Manager complaining about the petitioners poor performance and habitual absenteeism, as shown in the daily absence reports. On January 18, 1993, petitioner was again absent from work without permission or notice to his immediate superior. It turned out that he went to Bacolod City and on January 28, 1993, the petitioner was one of those arrested during a raid in the house of one "Toto Ruiz," a suspected drug pusher and was brought to the Bacolod Police Station along with four (4) other suspects. Upon further search and investigation by the Narcotics Control Division, the petitioner was found possessing two (2) suspected marijuana roaches (butts) which were placed inside his left shoe. The event was widely publicized, focusing on petitioners position as an Economics teacher of WNC, and considering further that one of his fellow suspects was a member of the Philippine Army, who was caught with an unlicensed firearm, a tooter and other "shabu" paraphernalia. The petitioner and other suspects were then charged with violation of the Dangerous Drugs Act of 1972 (Republic Act No. 6425, as amended). Petitioner was asked to explain within 24 hours why he should not be terminated as a result of the raid and the charges against him for violation of Rep. Act No. 6425 as amended. Petitioner allegedly was not able to answer immediately since he was in jail and received said memorandum only on January 30, 1993, although his wife had earlier received the memorandum on January 28, 1993. On January 29, 1993, the petitioner was dismissed for failure to answer said memorandum. On February 1, 1993, the petitioner wrote to the President of WNC explaining his side and asking for due process. WNC cancelled its Notice of Termination dated January 29, 1993, and granted the petitioners request. The petitioner was notified through a memorandum about the grant of his request and that a hearing would be conducted. He was then placed under preventive suspension and an investigation committee was organized to conduct the probe. On March 6, 1993, a notice of hearing/investigation was sent to the petitioner. After the investigation attended by the petitioner and his counsel, with proceedings duly recorded, the investigation committee recommended the dismissal of petitioner. A notice of termination was then sent to petitioner informing him of his termination from the service for serious misconduct and gross and habitual neglect of duty. The petitioner received the notice on March 25, 1993, but did not file a grievance concerning the notice of termination. On January 19, 1995, petitioner filed a Complaint against WNC for illegal suspension, illegal dismissal, backwages, salary differential for salary increases and other benefits granted after his dismissal as well as for moral and exemplary damages and attorneys fees. In its Answer, WNC alleged that petitioner was dismissed on charges of serious misconduct, and gross and willful neglect of duty. WNC said his dismissal was effected after due notice and prior hearing. It claimed also that since petitioner was terminated for a valid cause after a due hearing, the latters claim for moral and exemplary damages, and attorneys fees had no basis in fact and in law. After due proceedings, the Labor Arbiter rendered a decision, the decretal portion of which reads as follows: WHEREFORE, premises considered, judgment is hereby rendered DIRECTING respondent West Negros College to pay complainant Rene P. Valiao (a) P3,300.00 as salary for the period of his preventive suspension, and (b) P330.00 as attorneys fees, or the total amount of THREE THOUSAND SIX HUNDRED THIRTY PESOS (P3,630.00). Further, all other claims are DISMISSED for lack of merit. SO ORDERED.3

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The Labor Arbiter found no justifiable reason to place the petitioner under preventive suspension as there was no serious or imminent threat to the life or property of his employer or co-workers. However, the Labor Arbiter found the dismissal of the petitioner from WNC to be valid due to absenteeism and tardiness and after he was accorded the procedural due process aspect of the law as reflected in the records showing that the petitioner was formally investigated and given the opportunity to refute the alleged findings by the management of WNC. The Labor Arbiter held that frequent absenteeism and tardiness of the petitioner constituted not only willful disobedience but also gross and habitual neglect of duties, which are valid grounds for termination of employment. He stressed that the petitioners frequent absences without proper leave of absence was not only unfair to WNC and the petitioners co-employees but also set an undesirable example to the employees under his supervision, considering that the petitioner was not a mere rank-and-file employee but one who owed more than the usual fealty to the organization. On appeal to the NLRC, the latter affirmed the decision of the Labor Arbiter, sustained the latters findings of facts, and made its own findings on the apprehension of the petitioner for possession of prohibited drugs. The decretal portion of the decision reads as follows: WHEREFORE, premises considered, the appeal is DISMISSED and the decision of the Executive Labor Arbiter is AFFIRMED in its entirety. SO ORDERED.4 Petitioner then filed a Petition for Certiorari under Rule 65 before the Court of Appeals but this was dismissed for lack of merit. The decretal portion of the decision reads as follows: WHEREFORE, the questioned Decision and Resolution dated December 11, 1998 and July 7, 1999, respectively, of public respondent National Labor Relations Commission are hereby AFFIRMED. SO ORDERED.5 The Court of Appeals held that the petitioner was validly dismissed for serious misconduct and gross habitual neglect of duties, which was aggravated by his arrest for violation of Rep. Act No. 6425, as amended [the January 28, 1993 incident] and that he was afforded the twin requirements of notice and hearing and the opportunity to defend himself by the investigating committee. The appellate court noted that WNC had presented sufficient evidence to support petitioners termination from employment after taking into consideration the totality of the infractions or the number of violations committed by petitioner during the period of employment and stressed that it properly exercised its management prerogative by observing due Serious misconduct and habitual neglect of duties are among the just causes for terminating an employee under the Labor Code of the Philippines. Gross negligence connotes want of care in the performance of ones duties. Habitual neglect implies repeated failure to perform ones duties for a period of time, depending upon the circumstances.8 The Labor Arbiters findings that petitioners habitual absenteeism and tardiness constitute gross and habitual neglect of duties that justified his termination of employment are sufficiently supported by evidence on record. Petitioners repeated acts of absences without leave and his frequent tardiness reflect his indifferent attitude to and lack of motivation in his work. More importantly, his repeated and habitual infractions, committed despite several warnings, constitute process. Finally, the Court of Appeals ruled that the NLRC correctly denied the claim for damages and attorneys fees for lack of evidentiary support. Petitioner duly filed a Motion of Reconsideration, which was denied by the Court of Appeals. Hence, this petition alleging that: A. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE DISMISSAL OF PETITIONER WAS VALID, DESPITE THE FACT THAT THERE IS CLEAR AND BLATANT VIOLATION OF THE BASIC CONSTITUTIONAL RIGHTS OF THE HEREIN PETITIONER BOTH SUBSTANTIVE AND PROCEDURAL DUE PROCESS. B. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS IN (SIC) DISMISSING THE RELIEFS FOR MORAL AND EXEMPLARY DAMAGES AND ATTORNEYS FEES.6 In our view, the only relevant issue for our resolution is whether or not the petitioner was validly dismissed from employment on the ground of serious misconduct and gross habitual neglect of duties, including habitual tardiness and absenteeism. Petitioner claims that his outright dismissal from employment was not valid and too harsh and that he was not dismissed from employment because of tardiness or absences but because he was among those apprehended in a raid. Also, he was not accorded due process because although his wife received the show cause notice, he did not have the proper mind to reply as he was in jail and was psychologically disturbed. Considering the submissions of the parties as well as the records before us, we find the petition without merit. Petitioners dismissal from employment is valid and justified. For an employees dismissal to be valid, (a) the dismissal must be for a valid cause and (b) the employee must be afforded due process.7

10
gross misconduct unexpected from an employee of petitioners stature. This Court has held that habitual absenteeism without leave constitute gross negligence and is sufficient to justify termination of an employee.9 However, petitioner claims that he was dismissed not for his tardiness or absences but for his arrest as a suspected drug user. His claim, however, is merely speculative. We find such contention devoid of basis. First, the decisions of the Labor Arbiter, the NLRC, and the Court of Appeals are indubitable. They show that indeed petitioner had incurred numerous and repeated absences without any leave. Moreover, he was not punctual in reporting for work. These unexplained absences and tardiness were reflected on the summary reports submitted by WNC before the labor arbiter, but petitioner failed to controvert said reports. Second, contrary to petitioners assertion, the NLRC did not base its conclusions on the fact of the arrest of petitioner for violation of Rep. Act No. 6425 but on the totality of the number of infractions incurred by the petitioner during the period of his employment in different positions he occupied at WNC. Thus: In the case of petitioner Valiao, his services were terminated by private respondent after having been found guilty of serious misconduct and gross habitual neglect of duty which was aggravated by the January 28, 1993 incident. In exercising such management prerogative, due process was properly observed. Private respondent presented sufficient evidence to support its act in terminating the services of petitioner. Private respondent took into consideration the totality of the infractions or the number of violations committed by petitioner during the period of employment. Furthermore, it hardly needs reminding that, in view of petitioners position and responsibilities, he must demonstrate a scrupulous regard for rules and policies befitting those who would be role models for their young charges.10 (Emphasis and italics supplied) Indeed, even without the arrest incident, WNC had more than enough basis for terminating petitioner from employment. It bears stressing that petitioners absences and tardiness were not isolated incidents but manifested a pattern of habituality. In one case, we held that where the records clearly show that the employee has not only been charged with the offense of highgrading but also has been warned 21 times for absences without official leave, these repeated acts of misconduct and willful breach of trust by an employee justify his dismissal and forfeiture of his right to security of tenure.11 The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee. The offenses committed by him should not be taken singly and separately but in their totality. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and independent of each other.12 Needless to say, so irresponsible an employee like petitioner does not deserve a place in the workplace, and it is within the managements prerogative of WNC to terminate his employment. Even as the law is solicitous of the welfare of employees, it must also protect the rights of an employer to exercise what are clearly management prerogatives. As long as the companys exercise of those rights and prerogative is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld.13 Still, petitioner claims that he was not afforded due process so that his dismissal from employment should be declared invalid. This contention deserves scant consideration. The Court of Appeals held that "the records reveal that petitioner was afforded the twin requirements of notice and hearing and was likewise given the opportunity to defend himself before the investigating committee." We find no reason to set aside these factual findings of the Court of Appeals as they are supported by evidence on record. Besides, we may not review the appellate courts findings of fact in an appeal via certiorari,14 since as a rule, the Supreme Courts review is limited to errors of law allegedly committed by the appellate court.15 Judicial review of labor cases does not go as far as to evaluate the sufficiency of evidence upon which the Labor Arbiter and National Labor Relations Commission based their determinations.16 In this case, petitioner was asked to explain his several absences and tardiness on many occasions. A notice to explain was sent to him regarding the arrest incident wherein he was able to reply. An investigation committee was formed by WNC to investigate the arrest incident and the absences and tardiness of petitioner. It must be emphasized that proceedings of the committee were duly recorded, and petitioner actively participated therein by answering the various questions interposed by the panel members. Finally, a notice of his termination was sent to petitioner, although he claims to have received it late as he was in jail. It is an undeniable fact, however, that his wife had actually received the notice in his house earlier, even before petitioners termination and this matter was later communicated to him. At any rate, petitioner was given enough opportunity to be heard, and his dismissal was based on valid grounds. The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial-type hearing is not at all times and in all instances essential, as the due process requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack of notice and hearing.17 Finally, the Labor Arbiter found that petitioner is entitled to salary differentials for the period of his preventive suspension, as there is no sufficient basis shown to justify his preventive suspension. During the pendency of the investigation, the employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to life or property of the employer or of his co-workers.18 But in this case, there is no indication that petitioner posed a serious threat to the life and property of the employer or his co-

11
employees. Neither was it shown that he was in such a position to unduly influence the outcome of the investigation. Hence, his preventive suspension could not be justified, and the payment of his salary differentials is in order. However, the award of attorneys fees to him cannot be sustained, in view of our findings that petitioner was validly dismissed from employment. Said award lacks legal basis and could not be granted properly in this case. WHEREFORE, the assailed Decision dated August 22, 2000 and Resolution dated November 22, 2000 of the Court of Appeals in CA-G.R. SP No. 55133 are AFFIRMED with MODIFICATION in that the award of attorneys fees is deleted. No pronouncement as to costs. A Citibank employee verified by phone the data which appeared on the application forms. It was Florence Verendia, as secretary of the APBCI General Manager, who answered the check calls. The applications were then approved and the corresponding new and unsigned credit cards were issued. Petitioner bank's policy is for new and unsigned credit cards to be released only to the cardholders concerned or their duly authorized representatives. However, a Citibank employee may himself take delivery of new and unsigned credit cards after accomplishing a Card Pull-Out Request Form wherein the employee assumes the responsibility of delivering the same to the cardholder concerned. Teresita Supnad, an employee of petitioner bank and Florence Verendia, took delivery of nineteen (19) credit cards issued in the name of the said alleged APBCI credit applicants. On the other hand, on five (5) separate occasions, respondent Llonillo personally picked up the newly approved and unsigned credit cards issued to the other seven (7) alleged APBCI employee and delivered them to Verendia. In July 1992, petitioner bank discovered that the credit card applications of the alleged APBCI employees were fictitious. Per report of the PNP-Crime Laboratory, Supnad and Verendia falsified the signature of the alleged applicants. 2 After getting the credit cards, the two used them to purchase goods and avail of services from accredited commercial establishments worth more than P200,000.00. G.R. No. 111222 January 18, 1995 CITIBANK, N.A., petitioner, vs. DR. JOSE C. GATCHALIAN, in his capacity as Voluntary Arbitrator, CITIBANK PHILIPPINES EMPLOYEES UNION (CPEU) and EMY LLONILLO, respondents. Petitioner Citibank N.A. prays for the reversal of the decision of voluntary arbitrator Dr. Jose C. Gatchalian reinstating respondent Emerita "Emy" Llonillo to her former position as clerk-typist/maker without backwages. Respondent Llonillo, together with Teresita Supnad, her co-employee and Florence Verendia, an employee of Asian-Pacific Broadcasting Company, Inc. (APBCI), were implicated in a scheme to defraud petitioner bank in the amount of P740,000.00. The administrative investigation conducted by petitioner bank, with the assistance of the PNP Crime Laboratory, revealed the following: Petitioner bank received thirty-one (31) applications from alleged APBCI employees 1 for the issuance of Citibank credit cards, popularly known as Mastercard. Petitioner bank required respondent Llonillo to explain. In her reply, Llonillo admitted she personally picked up seven (7) credit cards issued to Anjenette Caballa, Miriam Ramiro, Alen Malic, Caroline Ramiro, Cecilia Ibaez, Lalaine Perez and Marife Bacuetes. She allegedly wanted to help the bank deliver "fast, competent and problem-free service to clients." She disclaimed knowledge that the APBCI applicants were fictitious. She also denied participation in the fraudulent use of said credit cards. Petitioner bank then formed a committee to investigate. Respondent Llonillo and the president of the Citibank Philippines Employees Union (of which respondent was a member) were invited for a conference. Respondent revealed that on five (5) occasions, 3 she was asked by Verendia to take delivery of newly approved and unsigned credit cards issued to some of the latter's alleged officemates, namely: Anjenette Caballa, Miriam Ramiro, Allen Malic, Caroline Ramiro, Cecilia Ibaez, Lalaine Perez and Marife Bacuetes. 4 On said occasions, Verendia informed her by telephone she was on the way to the bank to pick up some of the newly approved credit cards issued to her alleged co-employees at APBCI. Each time, she acceded to Verendia's request and delivered the newly approved and unsigned credit cards to the latter without knowing that the cardholders were fictitious. In every case, respondent

12
signed the Card Pull-Out Request Form, acknowledging receipt of the credit cards and taking responsibility for their delivery to the cardholder concerned. Respondent further disclosed that Verendia was introduced to her by a mutual friend. On November 19, 1992, the committee recommended the termination of respondent's employment with the bank for loss of trust and confidence and gross negligence. Petitioner bank adopted the committee's recommendation and notified respondent of her immediate dismissal. 5 The bank also terminated the services of Supnad. In addition, it filed a case for estafa through falsification of private/commercial documents against both Supnad and Verendia. Pursuant to their existing Collective Bargaining Agreement, petitioner bank and respondent union referred Llonillo's dismissal to the Grievance Machinery but the latter failed to resolve the controversy. As a next step, the parties submitted the case for resolution to voluntary arbitrator Dr. Jose C. Gatchalian. During the arbitration, a term of reference (stipulation of facts) 6 was agreed upon by the parties. Petitioner bank then presented its evidence. When it was the turn of the union to adduce evidence, the union officers and counsel refused to reveal the purpose of their request to subpoena as a witness one of petitioner bank's officers. The subpoena was not issued 7 and respondent refused to adduce evidence. On the basis of the record and the evidence presented by petitioner bank, voluntary arbitrator Dr. Gatchalian rendered a decision 8 ordering the reinstatement of respondent Llonillo without payment of backwages. Hence this petition for certiorari where petitioner contends: THE DECISION OF THE VOLUNTARY ARBITRATOR IS PATENTLY IN CONTRAVENTION OF APPLICABLE LAWS AND DECISIONS OF THIS HONORABLE COURT. THE DECISION OF THE VOLUNTARY ARBITRATOR IS NOT SUPPORTED BY, NAY, IGNORED, THE EVIDENCE ON RECORD. THE DECISION OF THE VOLUNTARY ARBITRATOR CONSTITUTES GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION ON HIS PART. We find for the petitioner. In ordering the reinstatement of respondent Llonillo, the voluntary arbitrator ruled that the law 9 requires that an employee's negligence, to be a valid ground for dismissal, must be both gross and habitual. He did not find the negligence of respondent Llonillo as within this category. Respondent arbitrator's ruling disregards tha fact that Llonillo was dismissed on two (2) grounds, viz: loss of confidence and gross negligence. Petitioner's loss of confidence was anchored on its suspicion that Llonillo conspired with Supnad and Verendia in the fraud. On the other hand, its finding of gross negligence was grounded on Llonillo's act of carelessly delivering seven (7) newly approved and unsigned Mastercards to Verendia and the latter's messenger. Thus, petitioner bank's Notice of Termination to respondent Llonillo stated: In any event, even assuming that you (respondent Llonillo) were not connivance with Florence (Verendia) and Tess (Supnad), the bank finds your deliberate action of releasing 7 unsigned Mastercards to complete strangers, without even asking receipt from them, as gross negligence on your part. As you know by know, because you released said 7 unsigned Mastercards to Florence and Tess, the two were able to falsify, and did falsify the signatures of the cardholders therein (on the spaces labeled "Authorized Signature") and fraudulently used the same to buy goods and services from the bank's accredited establishments, the total value of which is at least P201,795.34. In this regard, the bank finds the statement you gave by way of explanation, that you did not notice the provisions of the Card Pull-Out Requests, you ought to have known/realized that it was totally negligent for anyone to deliver unsigned Mastercards to total strangers. We have carefully examined the records and we find no substantial evidence that would clearly and convincingly prove that respondent Llonillo conspired with Verendia and Supnad in defrauding petitioner bank over P200,000.00. The Report submitted by the PNP Crime Laboratory 10 revealed that it was Supnad and Verendia who falsified the signatures of the fictitious cardholders and fraudulently used the same in purchasing goods and services from accredited commercial establishments. Respondent Llonillo's participation was limited to picking-up seven (7) of the newlyapproved and unused credit cards from the bank's releasing officer and turning them over to Verendia. 11 It was precisely on the basis of the above findings that only Verendia and Supnad (excluding Llonillo) were charged with estafa through falsification of private/commercial documents. The alleged close association of respondent Llonillo to her co-employee Supnad, even if true, does not establish her complicity in the scheme to defraud the bank. By itself and without more, it is insufficient to implicate her in the fraud committed by Supnad and Verendia. Be that as it may, we find that respondent arbitrator gravely abused his discretion in finding that Llonillo did not commit gross negligence in the performance of her duty. Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. 12 The evidence on record succinctly established the gross negligence of respondent

13
Llonillo. She admitted that the first time she was asked by Verendia to pick up one of the newly approved and unused credit cards, she immediately acceded. Yet at that time, she had not personally met nor previously seen Verendia. When asked how she came to know to whom she would give the card, respondent Llonillo responded that Verendia described herself over the phone and that was how she was able to identify Verendia when she first met her. Thus, on the basis of a mere description over the telephone, respondent Llonillo delivered the credit cards to Verendia. The succeeding occasions when she delivered the other newly approved and unused credit cards to Verendia also revealed respondent Llonillo's gross lack of care. Again, she admitted that Verendia would call her up at the office to say she was enroute to the bank to get some of the newly approved and unused credit cards. Under the pretext that Verendia had difficulty in finding a parking space within the bank's premises, Verendia would request her to get the credit cards instead. Respondent Llonillo accede to the requests. She got the new and unused credit cards and gave them to Verendia at the mezzanine floor of the bank. It did not strike respondent Llonillo as strange that while Verendia allegedly found difficulty in finding a parking space within the bank premises, yet she was always able to meet her at the mezzanine floor of the bank to get the credit cards. Respondent Llonillo's gross negligence also showed when she delivered the credit card issued to Marife Bacuetes, another fictitious APBCI employee. She admitted that she gave the card to Verendia's messenger, a person whom she had not seen before but who merely represented to her that he was the messenger sent by Verendia to pick up the card. When queried about the identity of the said messenger, respondent replied that she did not ask for the messenger's name. Neither did she ask the alleged messenger or Verendia herself to sign a receipt evidencing their acceptance of the credit cards. All of the above acts and omissions of respondent Llonillo were in patent violation of petitioner bank's policy that an employee may take delivery of newly approved and unused credit cards issued in another's name, but in doing so, he/she assumes the responsibility of delivering the credit card to the cardholder concerned or to the latter's duly authorized representative. Respondent Llonillo claims as a defense that even if she did not pick up the seven (7) newly approved and unused credit cards and deliver the same to Verendia, still, the latter could have gotten hold of the same by herself. Respondent stresses that Verendia herself and bank employee Supnad were able to personally pick up the other credit cards issued to fictitious APBCI employees. The possibility is beside the point. It cannot obliterate the truth that she committed gross negligence in the delivery of the seven (7) newly approved and unused credit cards to Verendia and her messenger. Neither are we impressed with respondent Llonillo's claim that she was singled out as negligent in her taking delivery of the seven unused credit cards. The bank's releasing officer acted well within the bank's rules when it released the subject credit cards to respondent Llonillo. As previously noted, the bank allows, as an exception, any of its employees to take delivery of newly approved and unused credit cards but in doing so, the said employee undertakes to deliver the same to the cardholder concerned and assumes responsibility for its fraudulent use. Respondent Llonillo failed in this undertaking. We also rule that respondent Llonillo's negligence is both gross and habitual. It was proved that she picked up the newly approved credit cards on five (5) separate occasions and delivered the same to Verendia and the latter's messenger. Certainly, these repetitive acts and omissions bespeak of habituality. Finally, respondent Llonillo's employment service for twenty-two (22) years would not, by itself, mitigate her negligence, especially in view of the substantial loss incurred by petitioner bank. As correctly pointed out by respondent voluntary arbitrator: The Union's claim for compassionate justice on Emy's 22 years of service and as first offender merit scant consideration. The longer an employe(e) stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct, and the code of discipline of the company. . . . IN VIEW WHEREOF, the appealed decision of voluntary arbitrator Dr. Jose C. Gatchalian is set aside. Respondent Emerita "Emy" Llonillo is found guilty of gross negligence and is hereby dismissed from service. Accordingly, the temporary restraining order issued by this Court in its Resolution, dated August 18, 1993, is made permanent. No pronouncement as to costs. SO ORDERED.

14
covering February 10, 1997 to April 7, 1997. Respondent Tada also found some discrepancies in the DCRs submitted by the petitioner. On April 6, 1997, respondent Tada confronted the petitioner regarding the said discrepancies. Respondent Tada pointed out that while numerous doctors were listed in some of the DCRs submitted by the petitioner, the call cards supposed to have been signed by them remained blank. Respondent Tada asked the petitioner to explain the discrepancies, but the latter merely replied, "Pagbigyan mo na lang ako, boss. Tulungan mo na lang ako, boss."6 On April 8, 1997, Tada went to the petitioners residence and confiscated all the paraphernalia used by the latter for his fieldwork, including the call cards and medicine samples. The car assigned to the respondent was likewise confiscated. On April 9, 1997, the petitioner filed an application for a "three-day sick leave," but indicated therein that he was going on leave only for two (2) days, from April 10 to 11, 1997. He claimed that he was suffering from severe diarrhea and with fever. 7 However, after the lapse of his applied leave of absence, the petitioner failed to report for work. Apparently, on April 15, 1997, the petitioner had already filed a complaint for illegal dismissal with the National Labor Relations Commission (NLRC) against the SPC, Epitacio Titong, Jr. (as President and General Manager), Danny T. Yu (as Division Manager) and Roberto Z. Tada (as Field Operations Manager), seeking the payment of backwages, moral damages, attorneys fees and other monetary benefits. The petitioner alleged that he was dismissed from employment as early as April 8, 1997 without any just or authorized cause, and without due process. He likewise prayed to be allowed to acquire the car assigned to him under the company car plan. The summons was received by the SPC on April 17, 1997. Nevertheless, a day before or on April 16, 1997, the petitioner received a telegram8 from the SPC instructing him to report to the office on April 18, 1997 and to see respondent Danny T. Yu who was the Division Manager. The petitioner, however, failed to comply. On April 18, 1997, respondent Tada sent a Memorandum9 to the petitioner requiring the latter to explain the following matters: 1. No Daily Coverage Report (DCR) submitted from February 10, 1997 up to April 7, 1997; 2. DCRs submitted were very much delayed, example: batch of DCRs up to January 10, 1997 were received 13 March 1997, batch of DCRs up to February 7, 1997 were received 18 March 1997; 3. More than 80 doctors allegedly visited and reported in DCRs covering the period September 1996 up to February 7, 1997 but whose individual doctors call cards are without the necessary signatures to prove they were visited. Why are these doctors

G.R. No. 146780. March 11, 2005 DENNIS A. CHUA, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, SCHERING-PLOUGH CORPORATION, EPITACIO TITONG, JR., DANNY T. YU, and ROBERTO TADA, Respondents. This is a petition for review on certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure from the October 31, 2000 Decision1 and January 18, 2001 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 57722. The antecedents are as follows: On June 1, 1995, petitioner Dennis Chua was hired as a Professional Medical Representative by Schering-Plough Corporation (SPC). The petitioner became a regular employee on December 1, 1995, and he was, thereafter, assigned to the Bicol Region. As a Professional Medical Representative, he was tasked to promote SPC and its products to physicians, hospitals, paramedics, including trade and government outlets in his assigned territory.2 To facilitate his duties as a medical representative, the petitioner was given a Kia Pride vehicle on June 28, 1995.3 Under the company car plan, the petitioner would be entitled to purchase the said car in July 1997, at a price corresponding to ten percent (10%) of the market value at the time of the purchase.4 One of the petitioners duties was to submit a Daily Coverage Report (DCR) every Monday, or at least to mail the same to the Field Operations Manager.5 Furthermore, he was required to have "call cards" signed by any of the eighty (80) doctors under his coverage to show that he indeed visited them and handed out promotional items. This system enabled the SPC to know how many doctors the petitioner had visited in a week and the number of call cards he was required to submit. Meanwhile, respondent Roberto Z. Tada, Field Operations Manager of the corporation for the Bicol Region, noticed that the petitioner filed his DCRs late on two occasions, and in batches at that. Specifically, a batch of DCRs up to January 10, 1997 was filed only on March 13, 1997, while another batch was filed only on March 18, 1997. The petitioner also failed to submit the requisite DCRs for the period

15
reported as calls in your DCR and samples reportedly issued without MD's signatures or acknowledgment; 4. Why the doctors call cards have no dates opposite the alleged signatures; 5. Claims for expense reimbursements covering the period February 16, 1997 up to March 31, 1997 without the corresponding DCRs; 6. You did not report to Mr. D.T. Yu in the office last April 18, 1997 despite the telegram sent to you requiring you to report.10 The same letter informed the petitioner that he was under preventive suspension effective April 11, 1997 while the case was under investigation. On May 8, 1997, while the case for illegal dismissal was pending resolution before the arbitration branch of the NLRC, the SPC sent another letter11 to the petitioner, informing him that his employment was terminated effective at the close of business hours of May 6, 1997. The SPC emphasized that the petitioner had been given an opportunity to explain his side, and that he had failed to do so. He was required to immediately turn over to respondent Tada all accounts, property and money in his possession.12 During the proceedings before the Labor Arbiter, the petitioner asserted that he was not given an opportunity to know the nature of the charges against him, nor a chance to explain his side. He further asserted that respondent Tada forced him to resign on the allegation of late submission of reports, but that he refused and instead filed an application for leave of absence. Respondent Tada then got angry and confiscated all the materials he used as a medical representative. The petitioner explained that his dismissal prevented him from submitting the DCRs for the period of February 10, 1997 to April 7, 1997. The SPC alleged, by way of answer to the complaint, that respondent Tada noticed discrepancies and anomalies in the DCRs filed by petitioner, including the late filing thereof in batches, and the failure to submit DCRs for the period of February 10, 1997 to April 7, 1997. Respondent Tada also noticed discrepancies in the doctors call cards, which were either unsigned, or, if at all signed, did not contain pertinent dates. It alleged that it sent a memorandum to the petitioner requiring him to explain his side, but that the latter failed to do so. The SPC emphasized that the petitioner was dismissed on the ground of gross and habitual neglect of duties. On September 30, 1998, Labor Arbiter Ramon Valentin C. Reyes rendered a Decision declaring the petitioners dismissal from employment as illegal. The Labor Arbiter held that the SPC failed to establish any ground for the petitioners dismissal and ordered the SPC to reinstate him. The dispositive portion of the decision reads: WHEREFORE, premises all considered, judgment is hereby rendered declaring complainants dismissal illegal and ordering respondents: 1.) To reinstate complainant to his former position as medical representative without loss of seniority rights and other privileges; 2.) To pay him full backwages and other monetary benefits from the time his compensation was withheld from him up to the time of his actual reinstatement without deductions for whatever earnings he may have received elsewhere during the period of his dismissal or in the amount of P164,340.00 (Basic pay of P5,600.00 + P3,530.00) In base and out base allowances April 1997 to September 30, 1998 or 18 mos. x P9,130.00 = (P164,340.00); 3.) Ordering respondents to deliver to complainant the company car to which he is entitled to under the company car plan, subject to the payment by him of lawful charges; and 4.) Ordering respondents to pay complainant the amount of P5,000.00 by way of indemnity and attorneys fees in a sum equivalent to ten percent (10%) of the monetary awards herein made in his favor. All other claims are dismissed for lack of merit. SO ORDERED.13 The Labor Arbiter ruled that the SPC failed to prove any just or authorized cause for the petitioners dismissal. He also declared that the petitioner was not able to comply with respondent Tadas memorandum requiring an explanation as to the alleged discrepancies, since the SPC had already dismissed the petitioner before he could do so. Upon motion of the petitioner, a Writ of Execution14 was issued on December 3, 1998, ordering the SPC to reinstate the petitioner to his former position without loss of seniority rights. Pursuant thereto, the petitioner was reinstated in the corporations payroll as of December 8, 1998.15 Meanwhile, the SPC appealed the decision of the Labor Arbiter to the NLRC. On October 19, 1999, the NLRC issued a Resolution,16 the dispositive portion of which reads: WHEREFORE, premises considered, the appeal is partially GRANTED and the Decision dated 30 September 1998 is AFFIRMED only in so far as the award of indemnity is concerned. Accordingly, a new decision is hereby entered finding respondent to have validly dismissed complainant. SO ORDERED.17

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The NLRC declared that while the petitioner was dismissed on valid grounds, he was not afforded due process. The NLRC ratiocinated that the petitioner was effectively dismissed on April 8, 1997, the date when the car and the other paraphernalia used by him as a medical representative were confiscated; he then no longer had the means to act as such employee of the SPC. It was only several days later when the petitioner was given an opportunity to explain his side. The NLRC concluded that while the petitioners dismissal was based on a valid ground, he was not afforded due process. Hence, while the NLRC deleted the award for backwages and other monetary awards, it retained the amount of P5,000.00 by way of indemnity in favor of the petitioner. The petitioner filed a motion for reconsideration of the said resolution, but the same was dismissed.18 The petitioner sought relief from the CA by way of a petition for certiorari, docketed as CA-G.R. SP No. 57722. The petitioner claimed that his dismissal was without just cause. He alleged that even assuming that his dismissal was for a just cause, the NLRC should have ordered the payment of backwages, and not merely an indemnity award of P5,000.00 based on ineffectual notice of termination. He cited the ruling of the Court in Serrano v. NLRC19 to bolster his claim. On October 31, 2000, the CA rendered a decision affirming, in toto, the resolution of the NLRC. The CA declared that the NLRC did not commit grave abuse of discretion in finding that the petitioners dismissal was based on a valid ground. The CA further held that the doctrine in Serrano adverted to could not be applied in the petitioners case as it was not yet in existence at the time the NLRC issued the assailed Resolution. The petitioner filed a motion for reconsideration which the appellate court denied in a Resolution20 dated January 18, 2001. Hence, this petition. The petitioner raises the following as errors in support of his petition: I THE COURT OF APPEALS GRAVELY ERRED, BLATANTLY DISREGARDED THE LAW AND ESTABLISHED JURISPRUDENCE, IN UPHOLDING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION. II THE COURT OF APPEALS GRAVELY ERRED AND FAILED TO AFFORD PROTECTION TO LABOR IN NOT APPLYING TO THE INSTANT CASE THE DOCTRINE LAID DOWN BY THIS HONORABLE COURT IN SERRANO VS. In the same light, the petitioner also failed to submit several doctors call cards, and submitted others which were incomplete; that is, undated although signed by the doctors. It must be stressed that the said call cards were also vital to the petitioners fieldwork. The requirement of asking the doctors to affix their signatures in the call cards, the date of the visit, as well as the samples and promotional items, if any, given to the doctors, enabled the SPC to verify whether such doctors were indeed visited by the petitioner. Gross negligence under Article 282 of the Labor Code, as amended, connotes want of care in the performance of ones duties, while habitual neglect implies repeated failure to perform ones duties for a period of time, depending upon the circumstances.25 Clearly, the petitioners repeated failure to submit the DCRs on time, as well as the failure to submit the doctors call cards constitute habitual neglect of duties. Needless to state, the foregoing clearly indicate that the employer NLRC, ET AL., G.R. NO. 117040, JANUARY 27, 2000.21 Anent the first issue, the petitioner contends that considering the respondents failure to comply with the two-notice statutory requirement, he is entitled to backwages, conformably to the ruling of this Court in Serrano v. NLRC.22 He asserts that although he was dismissed on April 8, 1997, the ruling of the Court in the said case is still applicable. In their comment on the petition, the respondents aver that the ruling of this Court should not be applied retroactively as it would violate the constitutional prescription against ex post facto laws. The petitioners termination from employment was anchored on the following: (a) gross and habitual neglect; (b) serious misconduct; and (c) willful disobedience to the lawful orders of the employer. Thus, it all boils down to the filing of the requisite DCRs due every Monday. As found by both the NLRC and the CA, the petitioner failed to file the DCRs on time on several occasions, and instead filed them in batches. Furthermore, the petitioner failed to submit the DCRs for February 10, 1997 to April 7, 1997. Considering that about ninety percent (90%) of the petitioners work as a medical representative entails fieldwork, such DCRs were vital to his job; the DCRs were the primary basis upon which the petitioners employer could track his accomplishments and work progress. Without the said DCRs, the employer would have no basis to determine if the petitioner was actually performing his assigned tasks or not. The petitioner himself did not dispute the delayed filing of the DCRs, and his failure to submit those for February 10, 1997 to April 7, 1997. The petitioner himself admitted that he was not able to submit the required DCRs because of his busy schedule, in his Reply Position Paper filed with the Labor Arbiter.23 The petitioner even postulated that he could have completed and submitted the said DCRs, had he not been terminated from employment.24

17
had a just cause in terminating the petitioners employment. As to the second issue of whether or not the petitioner is entitled to backwages, we agree with the ruling of the NLRC and the appellate court that the petitioner is not entitled to backwages. The petitioners contention that the ruling of the Court in Serrano v. NLRC26 should apply even if he was dismissed even before said ruling of the Court has no merit. When the petitioner was dismissed, the ruling of the Court in Wenphil Corporation v. NLRC,27 that an employee who was not accorded his statutory right to two-notice before his dismissal by his employer was entitled only to indemnity, was the prevailing doctrine. It can be recalled that in both Wenphil and Serrano, the respective employers therein failed to comply with the statutory two-notice requirement. The employer was ordered to pay indemnity to the employee in the Wenphil case; in Serrano, the employer was ordered to pay backwages from the time the employment was terminated until it was determined that the termination was for a just cause, due to the employers failure to comply with the statutory requirement which rendered the employees dismissal without legal effect. The matter has been laid to rest in the recent case of Agabon v. NLRC,28 where the Court held that a violation of an employees statutory right to two notices prior to the termination of his employment for a just cause entitles him to nominal damages of P30,000.00, absent sufficient evidence to support an award for actual or moral damages. The Court ruled in the Agabon case that it was abandoning the doctrine laid down in Serrano in this wise: After carefully analyzing the consequences of the divergent doctrines in the law on employment termination, we believe that in cases involving dismissal for cause but without observance of the twin requirements of notice and hearing, the better rule is to abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the employer. Such sanctions, however, must be stiffer than that imposed in Wenphil. By doing so, this Court would be able to achieve a fair result by dispensing justice not just to employees, but to employers as well.29 IN LIGHT OF ALL THE FOREGOING, the assailed Decision of the Court of Appeals is AFFIRMED with MODIFICATION. The respondents are ORDERED to pay, jointly and severally, indemnity to the petitioner in the amount of Thirty Thousand Pesos (P30,000.00). No costs. SO ORDERED.

G.R. No. 76272 July 28, 1999 JARDINE DAVIES, INC., petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION, JARDINE DAVIES EMPLOYEES UNION (FFW) and VIRGILIO REYES, respondents. This special civil action for certiorari seeks to set aside the Decision 1 of National Labor Relations Commission promulgated on March 17, 1986, and its Resolutions dated May 14, 1986 and August 19, 1986 which denied petitioner's motions for reconsideration. Petitioner is a domestic corporation engaged in general trading, including the exclusive distribution in the country of the world-renowned "Union 76" lubricating

18
oil manufactured by Unoco Philippines, Inc. Private respondent was a former sales representative of petitioner.1wphi1.nt A review of the records of this case reveals that petitioner engaged the services of a private investigation agency to conduct surveillance and investigation pertinent to reports that some of petitioner's products, particularly the "Union 76" lubricating oil, were being illegally manufactured, blended, packed and distributed. Consequently, a private investigator of the said investigation agency, confirmed that there were really fake "Union 76" lubricating oil in the market and reported further that the same were indeed being illegally manufactured, blended, packed and distributed by private respondent Virgilio Reyes. Petitioner then secured a search warrant which led to the seizure of some of the alleged fake items found in the apartment complex reportedly occupied by said private respondent. Thereafter, a criminal complaint for violation of Article 189 on unfair competition of the Revised Penal Code 2 was filed against private respondent and others. Subsequently, private respondent was likewise charged administratively for having committed serious misconduct inimical to the interest of petitioner company. Accordingly, he was advised to go on an indefinite leave. This eventually led to his termination from employment on February 23, 1983. Meanwhile, all the materials seized by virtue of the search warrant issued were released by order of the same court in view of a petition filed by private respondent's younger brother, Donato Reyes. Apparently, the younger Reyes convinced the court that he was the legal tenant of the apartment complex searched and that all the materials seized are legally owned by him. He further proved that he was legally engaged in the business of general merchandising, operating under the trade name of Lubrix Conglomerate, a single proprietorship duly licensed by the government in dealing with oil and lubricant products. Furthermore, he presented the receipts covering the purchases of the seized Unoco products purposely for packing the same in small containers to be resold to the public. Relying on the foregoing facts, private respondent sued petitioner for illegal dismissal. But the Labor Arbiter, Manuel R. Caday, dismissed his complaint. In a Decision dated September 24, 1985, the labor arbiter stated that the apartment complex allegedly occupied by private respondent was indeed the situs of the illegal manufacture, blending and packaging of "Union 76" oil and lubricating products. Convinced that private respondent was personally involved in the aforementioned illegal activity, the labor arbiter ruled that the private respondent committed an act of serious misconduct, fraud or willful breach of trust reposed in him by petitioner, a just cause for terminating employment. 3 Private respondent appealed to the NLRC. In its Decision dated March 17, 1986, the NLRC reversed the labor arbiter's judgment on the ground that there is no cogent reason for petitioner to lose its trust and confidence on private respondent, there being "no shadow of an act amounting to serious misconduct, fraud or breach of trust" on the part of private respondent. The NLRC disposed of the case as follows: WHEREFORE, premises considered, the Decision appealed from is hereby SET ASIDE and a new one entered ordering the respondent-appellee to reinstate complainant-appellant with full backwages without deduction or qualification whatsoever for earning elsewhere and without loss of seniority rights. SO ORDERED. 4 It's motion for reconsideration having been denied, petitioner filed the instant petition before us. The principal issue for resolution now is whether or not public respondent committed grave abuse of discretion in reversing the labor arbiter's judgment which found a just and valid cause for dismissal of private respondent by petitioner. Petitioner first contends that public respondent committed grave abuse of discretion in entertaining the appeal of private respondent despite its being filed out of time. Petitioner points out that private respondent received the decision of the labor arbiter on October 23, 1985, as indicated by the registry receipt, hence he had only until November 2, 1985 within which to appeal, pursuant to Article 223 of the Labor Code. Petitioner submits that the appeal received by public respondent on November 4, 1985, was filed beyond the reglementary period. 5 Petitioner concedes, however, that the last day for filing the appeal was November 2, 1985, which was a Saturday and a non-working day for NLRC. Clearly, the appeal could not have been filed on such date. Neither could it have been sent by registered mail because the post office was closed. The next day, November 3, 1985, was a Sunday. Accordingly, the appeal could still be filed on the next working day, Monday, November 4, 1985, the earliest day this could have been done. 6 Therefore, the appeal received by the public respondent was seasonably filed. Now, on the substantive issues, petitioner contends that public respondent gravely erred in ruling that private respondent was dismissed without valid and just cause, despite overwhelming evidence showing private respondent's commission of fraudulent and dishonest acts. 7 Petitioner avers that the findings of facts of public respondent are not supported by evidence as these are diametrically opposed to those of the labor arbiter who was in the best position to evaluate the parties' evidence. 8 Further, petitioner insists that the testimonies of its own witnesses, with its exhibits, show the existence of substantial evidence proving private respondent's serious misconduct. 9 Petitioner also asserts that public respondent acted arbitrarily when it ruled that the guilt of private respondent must be proved beyond reasonable doubt to validly justify termination of his employment. 10 Petitioner's attack on the alleged misappreciation of facts and distorted evaluation of

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evidence by public respondent stands, in our view, on hollow ground. Resort to judicial review of the decisions of the National Labor Relations Commission by way of a special civil action for certiorari under Rule 65 of the Rules of Court is confined only to issues of want or excess of jurisdiction and grave abuse of discretion on the part of the labor tribunal. It does not include an inquiry as to the correctness of the evaluation of evidence which was the basis of the labor agency in reaching its conclusion. Neither is it for this Court to re-examine conflicting evidence, reevaluate the credibility of the witnesses nor substitute findings of fact for those of an administrative body which has gained expertise in its specialized field. Arguably, there may even be an error in judgment. This, however, is not within the ambit of the extraordinary remedy of certiorari. 11 It is beyond dispute that loss of trust and confidence constitutes a valid ground for dismissing an employee. As provided for in the Labor Code: Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: xxx xxx xxx (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. xxx xxx xxx It is settled that loss of confidence as a just cause for terminating employment must be premised on the fact that an employee concerned holds a position of trust and confidence. 12 This situation obtains where a person is entrusted with confidence on delicate matters, such as care and protection, handling or custody of the employer's property, 13 as in this case. 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. 14 Likewise, it must be noted that proof beyond reasonable doubt is not required to dismiss an employee on the ground of loss of confidence. It is sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position. 15 This Court, however, has repeatedly stressed that the right of an employer to dismiss employees on account of loss of trust and confidence must not be exercised arbitrarily and without showing just cause, so as not to render the employee's constitutional right to security of tenure nugatory. Thus, although the dropping of a criminal charge for an employee's alleged misconduct does not bar his dismissal, and proof beyond reasonable doubt is not necessary to justify the same, still the basis thereof must be clearly and convincingly established. 16 Besides, for loss of confidence to be a valid ground for dismissal, such loss of confidence must arise from particular proven facts. 17 In other words, this ground must be founded on facts established by the employer who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may be fairly made to rest; otherwise the dismissal will be rendered illegal. 18 In the case at bar, private respondent was suspended and eventually dismissed for allegedly committing fraudulent acts and unfairly competing with petitioner. To justify its administrative action, petitioner somehow grave credence to the surveillance report implicating private respondent in the illegal manufacture, blending, packing and distribution of petitioner's products. Petitioner likewise relied on the result of the search on the apartment reportedly leased by private respondent from which alleged counterfeit "Union 76" oil products were seized. Unfortunately, these could not be deemed sufficient basis for petitioner to lose its trust and confidence on private respondent so as to justify the latter's dismissal. For evidently, the surveillance report is unreliable. As found by the NLRC, the conclusions therein were mere deductions not supported by any substantial corroborating evidence. Public respondent also observed that the petitioner failed to show concrete evidence to controvert the proof presented by private respondent that the packing of genuine "Union 76" oil in small containers was in support of the marketing policy of petitioner. Furthermore, as the Solicitor General points out, petitioner's agents surprisingly did not submit to laboratory test the alleged fake merchandise seized during the search, to determine its genuineness. 19 This deficiency could be attributed to the misstep of the private detectives who were specifically instructed to investigate precisely the reported counterfeiting of petitioner's products. Instead, the private investigators hurriedly concluded that the confiscated items were adulterated because they were not purchased directly from petitioner's warehouse. Petitioner's unexplained failure to ascertain the quality of the confiscated products is a virtual affirmation that the said articles are genuine, having been purchased from petitioner's dealers, and resold as is to end users. Accordingly, public respondent cannot be faulted in concluding that petitioner failed to substantiate its claim as to the actual existence of fake "Union 76" products. Another virtual confirmation that petitioner lacks factual basis for its distrust of private respondent was the subsequent judicial order releasing the articles seized during the search. As it appears on record, the court believed the explanation of Donato Reyes, brother of private respondent, that he was the lessee of the aforesaid apartment. Besides, the court declared that the owner of the confiscated goods was Donato Reyes, and there was no proof that the mentioned articles belonged to private respondent. More importantly, the order stated that there is no evidence to prove that Lubrix Conglomorate was faking petitioner's products because Donato Reyes purchased the seized goods from petitioner's authorized dealers as evidenced by receipts of the purchase. In sum, we hold that public respondent did not gravely abuse its discretion in ruling that petitioner failed to duly prove that the dismissal of private respondent was

20
justified on account of loss of trust and confidence. Hence, private respondent's dismissal was found illegal. With the finding that private respondent was illegally dismissed, an award of backwages is proper. It must be emphasized, though, that jurisprudence distinguishes between employees illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989, and those whose illegal dismissals were effected after such date. Thus, employees illegally dismissed prior to March 21, 1989, are entitled to backwages up to three (3) years without deduction or qualification, 20 while those illegally dismissed after are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. 21 Considering that private respondent was terminated from the service on February 23, 1983, he is entitled to backwages up to three years only, computed on the basis of his last monthly salary or pay. G.R. No. 143171 In addition to backwages, illegally dismissed employees are entitled to either reinstatement, if feasible, or separation pay, if reinstatement is no longer viable. 22 In our view, the circumstances obtaining in this case would not warrant the reinstatement of the private respondent. Antagonism and imputations of criminal act caused a severe strain in the relationship between petitioner and private respondent, not to mention the considerable length of time private respondent has been out of petitioner's employ. Thus, a more equitable disposition would be an award of separation pay equivalent to one (1) month's pay for every year of service with petitioner, a fraction of at least six (6) months being considered as one (1) whole year. 23 In the computation of separation pay, the three-year period wherein backwages are awarded must be included. 24 WHEREFORE, the instant petition is DENIED for lack of merit. The assailed decision of the NLRC is hereby AFFIRMED, subject to MODIFICATION that petitioner is hereby ordered to pay private respondent backwages, to be computed on the basis of his monthly salary or pay, up to three years; and separation pay, in lieu of reinstatement, equivalent to one month's pay for every year of service. Costs against petitioner.1wphi1.nt September 21, 2004 PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, ANTONIO O. COJUANGCO, JOSE P. DE JESUS, ENRIQUE D. PEREZ, ANTONIO R. SAMSON, RAUL J. PALABRICA, JOSE V. LADIA and NICANOR E. SACDALAN, petitioners, vs. ARTURO RAYMUNDO TOLENTINO, respondent. This is a petition to review, under Rule 45 of the Revised Rules of Court, the decision1 of the Court of Appeals2 in C.A. G.R. SP No. 50081 finding that respondent Arturo R. Tolentino was illegally dismissed and reversing the decision of the National Labor Relations Commission (NLRC). The dispositive portion of the Court of Appeals decision reads: WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. Accordingly, the decision dated 30 April 1997, of Labor Arbiter Eduardo J. Carpio is REINSTATED.3 Respondent Tolentino was employed in petitioner PLDT for 23 years. He started in 1972 as an installer/helper and, at the time of his termination in 1995, was the division manager of the Project Support Division, Provincial Expansion Center, Meet Demand Group. His division was in charge of the evaluation, recommendation and review of documents relating to provincial lot acquisitions. Sometime in 1995, Jonathan de Rivera, a supervisor directly under respondent Tolentino, was found to have entered into an "internal arrangement" with the sellers of a parcel of land which he recommended for acquisition under PLDTs expansion program. Quirino Donato, the attorney-in-fact of the landowner, executed an affidavit disclosing his "internal arrangement" with de Rivera. The "internal arrangement" consisted of the following: 1. out of P4,100,000.00 purchase price, only P3,400,000.00 will be automatically released to Mrs. Albay; 2. the P3,400,000.00 is net of all documentation and transfer expenses;

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3. payment will be released according to the following schedule: a) the first amount will be released to PNB Ilagan Branch to pay off Mrs. Albays outstanding loan; b) the second amount will be released to Mrs. Lourdes Albay upon completion of the transfer; c) the final amount will be released and delivered personally by de Rivera and company subject to the "internal arrangement."4 Donatos affidavit revealed that all follow-up calls regarding the transaction were to be directed to the office of respondent and de Rivera. Upon being apprised of this "internal arrangement," PLDT dismissed de Rivera. After he was dismissed, de Rivera submitted a sworn statement to PLDT implicating respondent as the person behind the anomalous "internal arrangement." Respondent, in an affidavit, denied this and pointed out that his authority to approve real estate acquisitions was limited to land valued below P200,000. Petitioner PLDT sent a notice of dismissal, effective October 27, 1995, to respondent Tolentino. Attached to this notice was a handwritten note from Nicanor E. Sacdalan, Vice-President of the Provincial Expansion Center, Meet Demand Group, giving respondent Tolentino the option to resign. Petitioner did not grant respondents request for a formal hearing but delayed the implementation of his dismissal. On December 4, 1995, petitioner informed respondent that his dismissal was already final and effective on December 5, 1995. Respondent then filed a complaint for illegal dismissal, moral and exemplary damages and other monetary claims against petitioner PLDT in January, 1996. The labor arbiter found that petitioner PLDT failed to prove and substantiate the charges against respondent and ruled that: WHEREFORE, judgment is hereby rendered declaring as illegal the termination of complainant, and ordering respondent PLDT to reinstate him to his former position with full backwages and other benefits which as of March 31, 1997 has already amounted to P656,800.00 (P41,000.00 x 16 mos.) which amount is subject to further adjustment until the complainant has been reinstated physically or in the payroll. Further, respondent PLDT is hereby ordered to pay herein complainant the amount of P1,000,000.00 for moral damages and P100,000.00 for exemplary damages plus attorneys fees in the amount which is equivalent to 10% of the total amount due the complainant.5 On appeal, the NLRC reversed the labor arbiters decision on the ground that respondent was a managerial employee and that loss of trust and confidence was enough reason to dismiss him. Respondents petition for certiorari was referred by this Court to the Court of Appeals6 which rendered the assailed decision reinstating the decision of the labor arbiter, that is, ordering respondents reinstatement. The issue before us is whether the Court of Appeals erred in ruling that the dismissal was not founded on clearly established facts sufficient to warrant separation from employment. Petitioner argues that, in the case of respondent Tolentino who was a managerial employee, loss of trust and confidence was sufficient to warrant dismissal. The petition is without merit. PLDTs basis for respondents dismissal was not enough to defeat respondents security of tenure. There is no dispute over the fact that respondent was a managerial employee and therefore loss of trust and confidence was a ground for his valid dismissal. The mere existence of a basis for the loss of trust and confidence justifies the dismissal of the employee7 because: [w]hen an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence, she gives up some of the rigid guaranties available to ordinary workers. Infractions which if committed by others would be overlooked or condoned or penalties mitigated may be visited with more severe disciplinary action. A companys resort to acts of self-defense would be more easily justified.8 Proof beyond reasonable doubt is not required provided there is a valid reason for the loss of trust and confidence, such as when the employer has a reasonable ground to believe that the managerial employee concerned is responsible for the purported misconduct and the nature of his participation renders him unworthy of the trust and confidence demanded by his position.9 However, the right of the management to dismiss must be balanced against the managerial employees right to security of tenure which is not one of the guaranties he gives up. This Court has consistently ruled that managerial employees enjoy security of tenure and, although the standards for their dismissal are less stringent, the loss of trust and confidence must be substantial and founded on clearly established facts sufficient to warrant the managerial employees separation from the company.10 Substantial evidence is of critical importance and the burden rests on the employer to prove it.11 Due to its subjective nature, it can easily be concocted by an abusive employer and used as a subterfuge for causes which are improper, illegal or unjustified.12 In the case at bar, this Court agrees with the Court of Appeals that the petitioners dismissal was not founded on clearly established facts sufficient to warrant separation from employment. The factual findings of the court a quo on the issue of whether there was sufficient basis for petitioner PLDT to dismiss respondent Tolentino are binding on this Court. In the exercise of the power of review, the factual determinations of the Court of Appeals are generally conclusive and binding on the Supreme Court.13 And they carry even more weight when they affirm those

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of the trial court or labor arbiter (in this case).14 After a thorough review of the records, we also came to the same factual conclusion as the Court of Appeals. The evidence relied upon by petitioner PLDT de Riveras sworn statement and Donatos affidavit does not, in our view, establish respondent Tolentinos complicity in the "internal arrangement" engineered by his subordinate de Rivera. We quote the labor arbiters incisive observation: Undoubtedly, when respondents received the raw information regarding complainants involvement in the anomalous transaction, there existed a plethora of possibilities. But we do not dwell on possibilities, suspicion and speculation. We rule based on hard facts and solid evidence. Thus, the dismissal of the complainant cannot justifiably be sustained since the findings in this case and the investigation of respondent Company failed to establish either complicity or culpability on the part of complainant. While dishonesty of an employee is not to be condoned, neither should a condemnation on that ground be tolerated based on suspicion spawned by speculative inferences. xxx True, complainant is a possible suspect, after all it was in his division where the said anomalous transaction emanated. However, the records are bereft of any showing that complainant is solely or partly responsible therefore (sic). Suspicion has never been a valid ground for the dismissal of an employee. The employees fate cannot, in justice, be hinged upon conjectures and surmises (quoting San Miguel Corporation v. NLRC, 18 SCRA 281). Evidently, respondents [petitioner PLDT] miserably failed to prove that the dismissal of complainant [respondent Tolentino] was for cause. The respondents evidence, although not required to be of such degree as is required in criminal cases, must be substantial. The same must clearly and convincingly establish the facts upon which loss of trust and confidence in the employee may be made to rest (quoting Plastic Starlite Industries Corp. v. NLRC, 171 SCRA 315).15 To be sure, respondent Tolentino was remiss in his duties as division manager for failing to discover the "internal arrangement" contrived by his subordinate. However, we disagree that dismissal was the proper sanction for such negligence. It was not commensurate to the lapse committed, especially in the light of respondents unblemished record of long and dedicated service to the company. In Hongkong Shanghai Bank Corporation vs. NLRC,16 we had occasion to rule that: The penalty imposed must be commensurate to the depravity of the malfeasance, violation or crime being punished. A grave injustice is committed in the name of justice when the penalty imposed is grossly disproportionate to the wrong committed. [D]ismissal is the most severe penalty an employer can impose on an employee. It goes without saying that care must be taken, and due regard given to an employees circumstances, in the application of such punishment. Certainly, a great injustice will result if this Court upholds Tolentinos dismissal. An employee illegally dismissed is entitled to full backwages and reinstatement pursuant to Article 279 of the Labor Code, as amended by RA 6715: 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. Although a managerial employee, respondent should be reinstated to his former position or its equivalent without loss of seniority rights inasmuch as the alleged strained relations between the parties were not adequately proven by petitioner PLDT which had the burden of doing so. In Quijano vs. Mercury Drug Corporation,17 we ruled that strained relations are a factual issue which must be raised before the labor arbiter for the proper reception of evidence. In this case, petitioner PLDT only raised the issue of strained relations in its appeal from the labor arbiters decision. Thus, no competent evidence exists in the records to support PLDTs assertion that a peaceful working relationship with respondent Tolentino was no longer possible. In fact, the records of the case show that PLDT, through VP Sacdalan, gave respondent Tolentino the option to resign.18 Such a deferential act by management makes us doubt PLDTs claim that its relations with respondent were "strained." The option to resign would not have been given had animosity existed between them. Furthermore, respondent was dismissed in December, 1995 when petitioner PLDT was still under the Cojuangco group. PLDT has since then passed to the ownership and control of its new owners, the First Pacific group which has absolutely nothing to do so with this controversy. Since there are no strained relations between the new management and respondent, reinstatement is feasible. This ruling is in line with the earlier pronouncement of the Court in Quijano that the strained relations doctrine should be strictly applied so as not to deprive an illegally dismissed employee of his right to reinstatement. To quote it fully: Well-entrenched is the rule that an illegally dismissed employee is entitled to reinstatement as a matter of right. Over the years, however, the case law developed that where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the tension and strained relations between the parties, or where relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. Some unscrupulous employers, however, have taken advantage of the overgrowth of this doctrine of "strained relations" by using it as a cover to get rid of its employees and thus defeat their right to job security.

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To protect labors security of tenure, we emphasize that the doctrine of "strained relations" should be strictly applied so as not to deprive an illegally dismissed employee of his right to reinstatement. Every labor dispute almost always results in "strained relations" and the phrase cannot be given an overarching interpretation, otherwise, an unjustly dismissed employee can never be reinstated.19 This Court is cognizant of managements right to select the people who will manage its business as well as its right to dismiss them. However, this right cannot be abused. Its exercise must always be tempered with compassion and understanding. As former Chief Justice Enrique Fernando eloquently put it: Where a penalty less severe would suffice, whatever missteps may be committed by labor ought not to be visited with consequence so severe. It is not only because of the laws concern for the workingmen. There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. The misery and pain attendant on the loss of jobs then could be avoided if there be acceptance of the view that under all the circumstances of a case, the workers should not be deprived of their means of livelihood. Nor is this to condone what has been done by them.20 To reinstate respondent is not to condone his "misstep" since his participation in the "internal arrangement" was not sufficiently established to warrant his dismissal from PLDT which he served faithfully for 23 years. The moral and exemplary damages awarded by the labor arbiter are hereby deleted since the dismissal of respondent was not attended by bad faith or fraud. Neither did it constitute an act oppressive to labor nor was it done in a manner contrary to morals, good customs or public policy.21 The Court affirms the award of attorneys fees on the basis of quantum meruit but reduces it to 5% of the total monetary award. Considering the circumstances of this case, the award is reasonable considering the explicit provisions of Article III of the Labor Code and Rule VIII, Section II, Book III of the Omnibus Rules Implementing the Labor Code.22 WHEREFORE, the petition is hereby denied. The Court of Appeals decision reinstating the labor arbiters decision is AFFIRMED with MODIFICATION. The award of attorneys fees is reduced to 5% of the total amount due respondent Tolentino. The award of moral and exemplary damages is deleted for reasons already explained. SO ORDERED. PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner, vs. ROLANDO MATIAS*, respondent. To constitute a valid cause to terminate employment, loss of trust and confidence must be proven clearly and convincingly by substantial evidence. To be a just cause for terminating employment, loss of confidence must be directly related to the duties of the employee to show that he or she is woefully unfit to continue working for the employer. The Case Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, seeking to reverse and set aside the September 16, 2002 Decision2 and the November 28, 2002 Resolution3 of the Court of Appeals (CA) in CA-GR SP No. 66212. The dispositive portion of the Decision reads: "WHEREFORE, in view of the foregoing, the petition is GRANTED. The assailed decision and resolution of the National Labor Relations Commission, Third Division are hereby ANNULLED and SET ASIDE. Accordingly, the Decision of the Labor Arbiter dated September 30, 1999 is hereby REINSTATED. No pronouncement as to costs."4 The assailed Resolution denied petitioners Motion for Reconsideration. The Facts The Court of Appeals narrated the factual antecedents of the case in the following manner: "Rolando Matias was employed by Construction and Development Corporation of the Philippines (CDCP, for short) on July 16, 1975 as Chief Accountant and Administrative Officer. During his employment with the company, various parcels of land situated at Don Carlos Bukidnon were placed in the names of certain employees as trustees for the purpose of owning vast tracts of land more than the limit a corporation can own which were primarily intended for CDCP agricultural businesses. By internal arrangement documents transferring back the properties to the corporation were executed. A land containing an area of 117,750 square meters was registered in the name of Matias on April 24, 1980 covered by Original Certificate of Title No. P-11315. "In 1981, Matias transferred to the main office of the CDCP as Head of the Corporate Accounting Department. In 1984, the loans of CDCP from various government entities were converted to equity thus making it a government owned or controlled corporation, and the name of CDCP was changed to Philippine National Construction Corporation (PNCC). Under a new set up, PNCC offered a

G.R. No. 156283

May 6, 2005

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retrenchment program and on December 31, 1984 Matias availed of the said program. "Sometime in 1985, the Conjuangco Farms owned by Mr. Danding Conjuangco acquired CDCP Farms Corporation wh[ich] took over the operations of said farms. Not long after, or in 1989, CDCP Farms Corporation ceased to operate. "In July 1992, two former CDCP employees, namely Reynaldo Tac-an and Luciano Tadena went to the house of Matias and brought with them duly accomplished documents and Special Power of Attorney for his signature and informed him that the lands in Bukidnon under his name with all the others were invaded by squatters, and that the said land were covered by the Comprehensive Agrarian Reform Program (CARP) where Matias name was included in the list of landowners. Matias reluctantly signed the document and after six months, he signed an acknowledgment receipt of P100,000.00 x x x. "On December 18, 1992, the Register of Deeds for the Province of Bukidnon cancelled the Original Certificate of Title No. P-11315 originally registered in the name of Matias and issued a new Transfer Certificate of Title No. T-36141 in the name of the Republic of the Philippines. The transfer of said parcel of land was made possible because Rolando Matias and Elena Esmeralda Matias received managers checks from the Land Bank of the Philippines in the amount of P102,355.96 and P219.22 and bond worth P203,478.48 as payment of Land Transfer Acquisition in November 1992. "On August 12, 1996, Matias was rehired by PNCC as Project Controller in Zambales PMMA Project. Subsequently, he headed the Core Group at the Central Office, Mandaluyong City. "Not long after, Mr. Felipe C. Al[d]ay, Head of the Realty Management Group of PNCC invited Matias to his office and showed him a listing of parcels of land in the name of different persons with the corresponding status including the latters name. On the basis of the listing, Mr. Alday told Matias that the transfer of the property registered in the latters name was not yet consummated by the LBP and then requested Matias to execute a Deed of Assignment in favor of PNCC pertaining to the said property. On September 16, 1997, Matias executed an Assignment of Real Property in his capacity, as registered owner of a parcel of land covered by OCT No. P-11315, in favor of PNCC for a consideration of P5,900.00. In the [D]eed of [A]ssignment, Matias guaranteed in writing that: That the Assignor hereby warrants that the above-described parcel of land is free from any lien or encumbrance. "In December 1997, Matias made a verbal follow-up as to the status of his appointment at the Central Office and was advised that it be already for signature by the President. A letter dated June 1, 1998 followed this. "On April 20, 1998, a memorandum was issued to Matias by PNCC through its Head, Administration Division, Ms. Janice Day E. Alejandro, directing the former to explain in writing why none of the following actions, falsification, estafa, dishonesty, and breach of trust and confidence, should be taken against him in connection with the Deed of Assignment. "In due time, Matias submitted his written explanation. On June 1, 1998, Ms. Alejandro first demanded x x x his resignation in lieu of termination. Thereafter, a letter advising him of his termination from the service on the ground of loss of trust and confidence effective June 15, 1998 was served. Hence, Matias filed a complaint for illegal dismissal and money claims against PNCC, on July 8, 1998 alleging that the dismissal on the ground of loss of trust and confidence was without basis."5 The above narration is substantially corroborated (or, at least, not controverted) by the parties respective Memoranda. After hearing, the labor arbiter6 (LA) held that herein respondent had been illegally dismissed. The LA thus ordered herein petitioner to reinstate respondent to the employees former position or to a substantially equivalent one, without loss of seniority rights, benefits and privileges; and to pay back wages in the amount of P242,666.66 and attorneys fees equivalent to P24,266.66.7 On appeal, however, sufficient basis for petitioners loss of trust and confidence in respondent was found by the National Labor Relations Commission (NLRC) as follows: "We are fully convinced that complainant [herein respondent] failed to disclose the fact that he had already received payments from the Land Bank of the Philippines for the transfer of the aforesaid parcel of land under his name by respondent [herein petitioner] PNCCs predecessor CDCP at the time when he executed an Assignment of Real Property involving the same parcel of land. As assignor, complainant guaranteed that it was free from lien and encumbrance. It is of no moment that complainant was advised by Mr. Felipe C. Alday, Jr. as Head of Equipment Management Division, that the aforesaid parcel of land was not yet compensated by Land Bank of the Philippines based on the list furnished by Land Bank Cagayan de Oro Branch (Annex A, of respondents Sur-Rejoinder). Surely, complainant committed an omission of relevant information that he had already received payments for the aforesaid parcel of land in December 1992. We are fully convinced that there was sufficient basis for loss of trust and confidence in warranting the termination from employment of complainant who held a position of trust project controller."8 Thus, the NLRC reversed the labor arbiters Decision and dismissed the Complaint.

25
Subsequently, respondent instituted a Petition for Certiorari before the CA. Ruling of the Court of Appeals The CA held that herein respondent had not acted with malice, deceit and bad faith when, in 1997, he executed the Deed of Assignment and guaranteed that the subject land was free from all liens and encumbrances, despite the fact that the property had already been sold to the Republic of the Philippines in 1992. The CA further noted that PNCC had acted anomalously in assigning its properties to different employees, purposely to evade the compulsory coverage of the Comprehensive Agrarian Reform Program (CARP). For having acted with fraud, petitioner had not come with clean hands in seeking sanctions against respondent. Thus, PNCC did not deserve the protection of the law. In reversing the NLRC and reinstating the labor arbiters disposition, the CA explained thus: "By and large, we find the dismissal of the petitioner on the ground of loss of trust and confidence to be not in order. Public respondents conclusion that the petitioner committed a breach of trust and confidence when he disposed the subject property without the consent of the management is not in accord with the established facts of the case. As correctly found by the labor arbiter, it was only in March 1998 when petitioner was following up his regular employment paper that the status of PNCCs alleged property in Bukidnon was verified, and that in September 1997, PNCC asked all its employees to execute a Deed of Transfer in favor of PNCC but as it is, only petitioner was singled out. In fact, petitioner was advised by Mr. Felipe C. Alday, Head of the Equipment Management Division of PNCC that the subject land was not yet compensated by the Land Bank of the Philippines based on the list furnished by the LBP Cagayan De Oro Branch. Hence, the representation of Mr. Felipe that the subject property was not yet compensated by the Land Bank prompted petitioner to sign the Deed of Assignment which was an already prepared document by the Legal Department of PNCC. The said representation merely instigated petitioner to omit to divulge a relevant fact leading to his dismissal on the ground of loss of trust and confidence. Clearly then, we apply the principle against the private respondent that he who comes to court must come with clean hands. Necessarily, we are not persuaded with respondents contention that the petitioner acted with malice, deceit and bad faith when he executed the deed of assignment in favor of PNCC in 1997 and warranted that the land is free from all liens and encumbrances, when the subject land had already been sold to the Republic of the Philippines in 1992. Moreover, in view of the fact that PNCC is also a party to the anomalous transaction of assigning the properties to different employees purposely to evade from the compulsory coverage of the Comprehensive Agrarian Reform Program, the act of private respondent of seeking remedy under the Labor Code and of charging complainant for having acted with fraud can not be sanctioned. Fraud implies willfulness or wrongful intent hence, the innocent non-disclosure of facts by the petitioner-employee to the private respondent-employer will not constitute a just cause for the dismissal of the employee."9 Hence, this Petition.10 The Issues Petitioner raises the following issues for our consideration: "I. The Honorable Court of Appeals erred in giving due course to the Petition when in fact the Petition was filed out of time. "II. The Honorable Court of Appeals seriously erred in finding that Rolando Matias was illegally dismissed. "III. The Court of Appeals committed grave abuse of discretion and serious error in completely ignoring the findings of the NLRC that Complainant Rolando Matias was guilty of breach of trust reposed in him by his employer."11 The second and the third issues, being closely related, will be discussed together. The Courts Ruling The Petition has no merit. It has not successfully shown any reversible error in the assailed Decision and Resolution. First Issue: Giving Due Course to Petition Justifiable Respondents Petition before the Court of Appeals, assailing the Decision and Resolution of the NLRC, was filed one day late. Nonetheless, upon motion of herein respondent, the CA reinstated "in the interest of substantial justice" the Petition that it had initially dismissed. The appellate court noted that he had no intention to delay the proceedings, and that the one-day delay in the filing of the Petition had not prejudiced the substantive rights of herein petitioner. Indeed, the prevailing trend is to accord party litigants the amplest opportunity for the proper and just determination of their causes, free from the constraints of needless technicalities. In Trans International v. Court of Appeals,12 this Court held that if the right to appeal would be curtailed by the mere expediency of holding that respondents had belatedly filed their notice of appeal, then the courts as the final arbiters of justice, would be abandoning their avowed objective to dispense justice based on the merits of the case, not on mere technicalities.13 In Siguenza v. Court of Appeals,14 the appeal, perfected thirteen (13) days late, was nonetheless allowed by the Court in the exercise of its equity jurisdiction, because

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"on its face the appeal appeared to be impressed with merit." In PNB v. Court of Appeals,15 the appeal, filed three (3) days beyond the reglementary appeal period, was allowed "in the higher interest of justice x x x (f)or to bar the appeal would be inequitable and unjust when viewed in the light of the trial courts decision x x x." The Court further took notice of the detailed demonstration by petitioners therein of the merits of their case, showing that they deserved another opportunity for the proper and just determination of their cause. In De Guzman v. Sandiganbayan,16 procedural rules were again relaxed to give way to substantial justice, especially when "transcendental matters" like life, liberty or State security were involved. The Court said: "The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice but not to bind and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical rules, shorn of judicial discretion. That is precisely why courts in rendering real justice have always been, as they in fact ought to be, conscientiously guided by the norm that when on the balance, technicalities take a backseat against substantive rights, and not the other way around. x x x." In the present case, the findings and conclusions of the labor arbiter and the NLRC are at odds, and the case concerns a labor matter to which our fundamental law mandates the State to give utmost priority and full protection. Hence, this Court finds no reason to disturb the CAs action giving due course to the certiorari Petition, despite the fact that it was filed one day late. The rationale behind the constitutional mandate to accord full protection to labor and to safeguard the employees means of livelihood should be given proper attention and sanction. Second Issue: No Just Cause for Dismissal In resolving the present controversy, the Court is guided by the basic principle in termination cases that the employer bears the burden of proving that the dismissal of the employee is for a just or an authorized cause.17 Failure to dispose of the burden would imply that the dismissal is not lawful, and that the employee is entitled to reinstatement, back wages and accruing benefits.18 Moreover, dismissed employees are not required to prove their innocence of the employers accusations against them.19 In the present case, petitioner invokes loss of trust and confidence as the ground for dismissing respondent. Under Article 282 of the Labor Code, as amended, loss of confidence must be based on "fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative." Ordinary breach does not suffice. A breach of trust is willful if it is done intentionally and knowingly without any justifiable excuse, as distinguished from an act done carelessly, thoughtlessly or inadvertently. 20 Petitioner alleges that respondent fraudulently breached its trust and confidence when, without its knowledge and consent, he disposed of the Bukidnon property; though actually belonging to petitioner, that property had purportedly been merely placed in trust under his name. Thereafter, he assigned the same property to petitioner, allegedly despite his full knowledge that the title had already been transferred -- with his active planning and participation -- to the Republic of the Philippines. The CA found petitioners allegations and conclusions to be unsupported by substantial evidence or by established facts. We agree. It was more than seven (7) years (in July 1992) after respondent had been separated from the employ of petitioner when two of his former co-employees at CDCP (petitioners predecessor) -- Reynaldo Tac-an and Luciano Tadena -- went to see him at his home in Quezon City, carrying accomplished documents and a Special Power of Attorney. They informed him that the pieces of land in Bukidnon, including that which had been placed by petitioner in his name, were covered by CARP; and that he therefore had to sign the documents. Relying on their representations, he did as he had been told. Petitioner has not at any time denied or repudiated the acts of Tac-an and Tadena. Thus, we cannot fault respondent for presuming that both employees were acting on its behalf. After respondent was rehired by petitioner in August 1996, the head of its Realty Management Group, Felipe C. Alday, summoned him. In his office, Alday showed respondent a list of parcels of land in the name of different persons, including the latters, with the corresponding status of each one. The former informed respondent that, for CARP purposes, the transfer of the property registered under the latters name had not yet been consummated. Alday then requested respondent to sign a prepared Deed of Assignment, in which the latter had purportedly reassigned the subject property to petitioner. It appears that the representations of Alday -- who, as head of petitioners Realty Management Group, presumably knew what he was talking about -- were relied upon by respondent. The fact that there was a priorly prepared Deed of Assignment in favor of petitioner, and that the Deed was ready for respondents immediate signature, further shows that Aldays acts were with the full knowledge and authority of top management. Petitioner should not now be allowed to penalize respondent for merely acting on the representations of its officer, whose primary function precisely related directly to the management of its real properties. After all, the fact that he had previously signed documents purporting to transfer the subject land to the

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government, pursuant to its agrarian reform program, is not totally inconsistent with the statement of Alday that the transfer of the same property had not been fully consummated. In addition, the documents presented to respondent, first by Tac-an and Tadena then by Alday, had priorly been prepared and readied for his signature. This fact negates petitioners assertion that he had actively planned and participated in the transfer of the property to the government for his personal benefit. Rather, it is apparent that he had no choice but to sign the documents presented to him by petitioners officers. He was aware that he was a mere employee being used as a dummy for the corporation, and that he had affixed his signature for no consideration other than his continued employment. Under the circumstances, he merely acceded to the will of petitioner, lest he lose his means of livelihood. Furthermore, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be so related to the performance of the duties of the dismissed employee as would show that he or she is unfit to continue working for the employer.21 Undeniably, the position of project controller -- the position of respondent at the time of his dismissal -- required trust and confidence, for it related to the handling of business expenditures or finances. However, his act allegedly constituting breach of trust and confidence was not in any way related to his official functions and responsibilities as controller. In fact, the questioned act pertained to an unlawful scheme deliberately engaged in by petitioner in order to evade a constitutional and legal mandate. We find the observations of the Office of the Solicitor General to be apropos in this regard: "x x x. Noteworthy is the unlawful scheme by PNCC of using its employees as dummies for the acquisition of vast tract of land in Bukidnon and thereafter compelling them to assign all rights over same properties in favor of PNCC. Such scheme by PNCC is a flagrant violation of the Constitution as regards the maximum area of real property which a corporation can acquire. "An ordinary laborer such as Matias will definitely submit to such scheme plotted by PNCC so as not to lose his source of livelihood. "PNCC, being Matias employer, induced if not compelled the latter to commit said acts. What was constitutionally prohibited to the Corporation was done indirectly by using Matias and all its employees. "PNCC and its administrative officers were also parties to the anomalous transactions of assigning the properties to different employees to indirectly evade the compulsory coverage of the CARP. PNCC cannot use the cloak of protection granted to employers under the Labor Code to terminate an optionless employee. Any party who seeks relief before any judicial tribunal must come with clean hands. "Since there was doubt as regards the real party at fault, it is equitable to resolve it in favor of labor."22 It has oft been held that loss of confidence should not be used "as a subterfuge for causes which are illegal, improper and unjustified. It must be genuine, not a mere afterthought to justify an earlier action taken in bad faith."23 Be it remembered that at stake here are the sole means of livelihood, the name and the reputation of the employee. Thus, petitioner must prove an actual breach of duty founded on clearly established facts sufficient to warrant his loss of employment.24 We stress once more that the right of an employer to dismiss an employee on account of loss of trust and confidence must not be exercised whimsically. To countenance an arbitrary exercise of that prerogative is to negate the employees constitutional right to security of tenure. In other words, the employer must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may be fairly made to rest; otherwise, the latters dismissal will be rendered illegal.25 WHEREFORE, the Petition is hereby DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioner.

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surfaced. Consequently, the audit team recommended that bills of lading should cover all backloading shipments; all collections from backloading shipment should be directly paid to the cashier who is responsible for procedural controls; and, incentive payments to the captain of the vessel and the cash advances for the port expenses should be covered by pro performs. 5 On 25 June 1992 another audit report was submitted detailing the accommodation of Mr. Elbert Jeanjacquet as a trade client whose account was 74% past due and unsecured yet was allowed as a contract grower for two thousand (2,000) chicken heads. The accounts of twelve (12) other customers granted extensions over and beyond the credit limit were further enumerated in the report. Except for two, all these accounts did not have any collaterals to secure them. 6 On 6 June 1992 a cash audit generated these findings: (a) cash collections were diverted to defray the area's operational and administrative expenses as the revolving fund was consumed before its replenishment in the form of countersigned checks from Cebu came; (b) personal "vales" (cash advances) were disbursed from the revolving fund in violation of company policies; and, (c) payments to suppliers were taken from the revolving fund instead of being paid in checks. 7 But, unlike in the first two audit examinations where no action was taken by VITARICH after receipt of the corresponding reports, Recodo this time was required to explain why he allowed the reported violations of company policies. 8 In his letter of 11 August 1992 Recodo clarified that the alleged personal "vales" were actually for business expenses and for wages of employees and that the use of collections to dafay operational and administrative expenses was unavoidable particularly when the chartered vessel was on dock unloading feeds while the replenishment of the revolving fund was delayed. He further assured VITARICH that all transactions with stevedores, shipping lines, PAL and piece workers were all on C.O.D. basis. 9 Admittedly, when petitioner Onofre Sebastian took over in June 1992 as Division head he was faced with a high volume of account receivables (A/R) accumulated during the time of Ben Cruz, his predecessor. To address the problem petitioner Sebastian and respondent Recodo conferred in the middle of July 1992 with the latter being instructed to cut down the accountabilities of Rex Cordova, a company salesman in Iloilo. Thereafter Recodo advised Cordova to reduce his technical credit extensions. In less than a month, the amount of account receivables was reduced from P800,000.00 to P205,000.00. 10. However on 27 August 1992 Recodo was asked again to explain within forty-eight (48) hours why he should not be terminated for failure to ground Rex Cordova in accordance with the 4 August 1992 memorandum of vice president Onofre Sebastian.1wphi1.nt The other grounds cited for terminating Recodo were his failure to reduce Cordova's A/R driver, the allowance of extension of his credit line, as well as the misrepresentation of his outstanding A/R. 11 The memorandum of 4 August 1992

G.R. No. 121905 May 20, 1999 VITARICH CORPORATION, DANILO SARMIENTO and ONOFRE SEBASTIAN, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION AND ISAGANI E. RECODO, respondents. VITARICH CORPORATION (VITARICH), together with its co-petitioners Danilo Sarmiento and Onofre Sebastian, 1 through this petition for certiorari, assails as grave abuse of discretion the reversal of its previous decision by public respondent National Labor Relations Commission (NLRC). Private respondent Isagani E. Recodo was hired by VITARICH, a feeds manufacturing corporation, as an Accounting Clerk in its office in Marilao, Bulacan. In 1979, he was promoted as Accounting Supervisor, then in 1986 as Sales Superintendent while assigned in Davao City. In 1988 he became the Sales Manager for Western Visayas based in Iloilo City with a monthly salary of P18,200.00. 2 As Sales Manager Recodo was supervised successively by three (3) division heads who were his immediate supervisors, namely, Dave Fernandez (1988-1989), Ben Cruz (1990-1992), and Onofre Sebastian (15 June 1992 up to Recodo's termination). 3 He also underwent several audit examinations in his line of work. In March 1991 VITARICH conducted an audit in Iloilo in response to a letter of a certain Espinosa pointing to anomalies in the backloading 4 and arrastre transactions of Recodo. The evaluation of the audit team found no concrete evidence that Recodo was receiving direct commission from the backloading of the chartered vessel but faulted him for his inadequate exercise of internal control regarding the matter, and no evidence either that Recodo had been receiving a share in the arrastre since the shipper and the arrastre operators managed by the Espinosa family denied this. However, an unaccounted difference of P14,002.50 in the backloading profits

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instructed Recodo to confirm all A/R drivers who were already two (2) weeks overdue to preclude any ghost deliveries and to ground all salesmen with A/R drivers who were already thirty (30) days old so that they could only resume deliveries after accounts were collected or payment arrangements were made. 12 In his 5 September 1992 letter Recodo explained that only the first paragraph of the faxed memorandum was readable so he had it verified. He only learned its full context when he was negotiating for the security of Cordova's past accounts. Thus, he postponed grounding Cordova until 20 August 1992 in order to bring about positive results. The negotiation reduced Cordova's A/R driver from P800,000.00 to P250,000.00 as of 19 August 1992 which amount would be further lowered to P150,000.00 by September. The alleged misrepresentation in the figures given was not deliberate but was merely a mental lapse due to tension at work. 13 After investigation, E.T. Enriquez, Head of Personnel, submitted his report on Recodo's alleged insubordination. Enriquez found that there was "no defensible ground for terminating (Recodo's) services." He cited as reasons therefor the nondocumentation of any warning given to Recodo to justify any loss of trust and confidence in him. 14 Nevertheless, VITARICH terminated Recodo on 15 October 1992 for violation of the 4 August 1992 Memorandum including policies on credit extensions and cash advances. On 13 October 1992, Recodo filed a complaint for illegal dismissal, non-payment of managerial incentive bonus and for moral and exemplary damages. Initially the complaint was directed against VITARICH and its president Danilo Sarmiento, but on 21 January 1993 vice president Onofre Sebastian was also included as respondent. On 23 June 1993 the Labor Arbiter adjudged VITARICH and its impleaded officers guilty of illegal dismissal and ordered them to pay Recodo seven (7) months back wages from November 1992 to May 1993 in the total amount of P418,600.00 plus 10% attorney's fees of P41,860.00. A separation pay of P291,200.00 was granted Recodo because reinstatement was no longer feasible in view of the strained relations between the parties. Moral and exemplary damages were not awarded since there was no finding of a valid reason to do so. For one to be entitled to theses damages, the manner in which the dismissal was made must be deliberate, malicious and tainted with bad faith. In this case the Labor Arbiter found no proof that petitioners acted in bad faith when they dismissed Recodo from employment. The claim for management incentive bonus was likewise denied as the grant of a bonus is a management prerogative. 15 The Labor Arbiter pointed out that although VITARICH justified the dismissal of Recodo by the audit reports on backloading, unauthorized credit extensions and cash disbursements and insubordination the company's dismissal letter was only anchored on insubordination without any mention of the past audits as bases thereof. Consequently, for want of prior notice, the Labor Arbiter ruled that lack of due process attended Recodo's termination. Nonetheless, the evidence of VITARICH relative to the charges of backloading and unauthorized transactions was examined. Thus, the Labor Arbiter reached the following conclusions: Firstly, there was no concrete evidence to support the claim that Recodo was receiving commissions or profited through hidden deals in the backloading transactions; nor did the company suffer any material loss as it even profited substantially therefrom. The Labor Arbiter noted that the transactions were undertaken upon the instructions of Recodo's supervisor, Dave Fernandez, hence, officially authorized by the company. They were properly documented by bills of lading considering that the shipper would suffer legal and other constraints if it were otherwise. 16 Secondly, credit extension limits, unsecured accounts and disbursements of cash collection for operational and administrative expenses were already part of the system when petitioner Onofre Sebastian took the helm as division head and instructed Recodo to solve the problems. Recodo exerted efforts to do so, especially with the reduction of Cordova's account and accomplished the lowering of overdue and unsecured accounts within a month. It was clear that the cash disbursements were utilized for official business. 17 Lastly, the Labor Arbiter significantly found that Recodo's explanation to the charges imputed to him by VITARICH was sincere and reasonable and that any breaches in company policies he might have committed were only ordinary, not willful to warrant his dismissal. 18 On appeal by VITARICH, the NLRC while finding a lack of due process in Recodo's dismissal reversed the Labor Arbiter's decision on the following rationale: (a) had the backloading transactions been properly handled by Recodo the profits would have been greater, hence, VITARICH suffered losses by such mismanagement; (b) although the backloading transactions were authorized by the division head, the proper handling thereof was the duty of Recodo and his failure to do so was enough basis for the company's loss of confidence in him; (c) violations of company policies were not mere carelessness since they were due to mismanagement by Recodo; (d) the non-grounding of salesman Cordova might have had a sincere and reasonable explanation but the very act of defying management's specific directives constituted a strong ground for its loss of trust and confidence; and, (e) Recodo's failure to require security for accounts and his allowing them to exceed the limit were contrary to accepted business practices and company policies. All told then, the series of infractions committed by Recodo were enough bases for his termination. Thus, in its 19 September 1994 decision, the NLRC set aside the judgment of the Labor Arbiter but awarded Recodo a P2,000.00 indemnity fee because he was terminated without due process. 19 Upon motion for reconsideration by Recodo, the NLRC issued its assailed resolution of 18 July 1995 reversing its earlier decision. It acknowledged that its previous decision was flawed by surmises on the backloading transactions, conjectures on the credit line extensions and speculations on the grounding of Cordova. The resolution applied the time-honored doctrine that the Labor Arbiter, as a trier of facts, had the superior oppotunity to test the credibility of witnesses and the veracity of the

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documentary evidence submitted. It further upheld the findings and recommendations of the audit teams that failed to find the accusation that Recodo violated a number of company policies. 20 On 14 August 1995 the NLRC denied a motion for reconsideration by VITARICH, hence, this petition based on the sole allegation that the reversal was a grave abuse of discretion as it was the main decision which was in accord with the facts. 21 We are not persuaded by VITARICH. In rectifying its previous appreciation and NLRC did not commit any abuse of discretion, much less grave. A careful scrutiny of the records reveals that the decision of the Labor Arbiter is suffused with the established facts and a correct understanding of them. Consequently, it is but proper for NLRC to abandon its former stance and adopt the Labor Arbiter. We can only agree with the preliminary statement by the NLRC in its 18 July 1995 resolutionn 22 One of the inherent powers of the Court to amend and control its processes and orders so as to make them conformable to law and justice includes the right to reverse itself, especially when in its honest opinion it has committed an error or mistake in judgement, and that to adhere to its decision will cause injustice to a party litigant (Astraquillo v. Javier, L-20034, January 26, 1965, 13 SCRA 125). It is beyond question that the issue on the dismissal of Recodo was not any of the backloading, credit limit and cash disbursement transactions insisted on by VITARICH as sufficient reasons for Recodo's dimissal but, as incisively pointed out by the Labor Arbiter, the alleged insubordination of Recodo. The very inaction by VITARICH on every audit belies its posture that it had lost its trust and confidence in Recodo as a consequence of the audit results. That it did not even notify Recodo of any charge against him after each audit nor that it asked for any explanation from him therefor, only proves that the imputations of alleged company violations were nothing more than mere garnishings to the more relevant charge of insubordination. The records do not even show that VITARICH deemed it necessary to penalize Recodo, not even only to warn him of any infraction. In fact, except for the alleged insubordination, it did not include any other charge against him in the termination notice. Quite obviously, since the alleged insubordination could not stand on its own merit, VITARICH had to prop it up with charges that had already been forgotten, set aside and deemed inconsequential. Being a mere afterthought to justify its earlier action of terminating Recodo, the allegations of policy violations do not constitute just causes of dismissal on account of the lack of confidence contemplated in Midas Touch Food Corporation v. NLRC 23 under which the guidelines for the application of the doctrine of loss of confidence are: (a) loss of confidence which should not be simulated; (b) it should not be used as a subterfuge for causes which are improper, illegal or unjustified; (c) it should not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and, (d) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith. Of the charge of insubordination, there is concrete evidence on record that Recodo was instructed by his superior to ground all all salesmen with due accounts; that Recodo delayed implementing the order and eventually grounded Cordova only after being made to explain his previous inaction. Apparently, there was a lawful, reasonable order to Recodo to support his actuations. While it may be true that there was a delay by Recodo in the implementation of his superior's order as regards Cordova's accounts, the question now to be resolved is whether the delay constitutes disobedience. If so, was it willful on the part of Recodo to risk his tenure in office based on loss of confidence? In AHS/Philippines, Inc. v. CA 24 we explained . . . willful disobedience of the employer's lawful orders, as a just cause for dismissal of an employee, envisages the concurrence of at least two (2) requisites: the employees assailed conduct must be willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. In its assailed resolution, the NLRC found 25 It would appear from the foregoing facts that the non-compliance by the complainant of the directive of Onofre Sebastian was not an open defiance to said directive but as one of the discretions which he has (sic) to take under the circumstances in his capacity as sales manager which to his mind would better serve the interest of the company. And true enough, his act turned to be more beneficial rather than being prejudicial to the company as it was shown earlier. While an employer is allowed a wide latitude to dismiss managerial employees on loss of trust and confidence, still the loss thereof must have some basis and must be proved by the employer otherwise the social justice policy of the labor laws and the Constitution will be for naught. 26 This very norm of social justice demands the presumption of good faith credited to the employees in the performance of their duties upon failure of their employer to prove just cause for their dismissal. 27 It is in obedience to the mandate of social justice and truth that the NLRC reversed its own decision contrary to the pull of pride and hubris, and for this, the NLRC must be commended, instead of censured, for reversing itself. WHEREFORE, the questioned resolution of the NLRC of 18 July 1995 reinstating the 23 June 1993 decision of the Labor Arbiter is AFFIRMED with the modification that the corresponding back wages of respondent ISAGANI E. RECODO be forthwith updated and released to him. SO ORDERED. G.R. No. 148205 February 28, 2005

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COCA-COLA BOTTLERS, PHILS., INC., petitioner, vs. KAPISANAN NG MALAYANG MANGGAGAWA SA COCA- COLA-FFW and FLORENTINO RAMIREZ, respondents. This is a petition for review of the Resolution1 of the Court of Appeals in CA-G.R. SP No. 58012 reversing the Resolution of the National Labor Relations Commission (NLRC) in NLRC NCR CASE CA 018341-99. The Antecedents Petitioner Coca-Cola Bottlers Phil., Inc. is a domestic corporation engaged in the manufacture, sale and distribution of softdrinks. It maintains plants in various areas of the country, among others, in Calamba and Sta. Rosa, Laguna, in Lipa City and Balayan, Batangas; in Sta. Cruz, Gumaca; in San Pablo City and Lucena City, Quezon Province; in Las Pias City, and Dasmarias, Cavite. On July 1, 1982, the petitioner hired Florentino Ramirez as "driver-helper" with the following duties: (a) as driver, he checks the trucks oil, water, wheels, etc.; (b) as helper, he is charged of loading and unloading trucks load; putting bottles in the coolers and displays company products to each outlet or customers store.2 Ramirez became a member of the respondent Kapisanan ng Malayang Manggagawa Sales Force Union, the bargaining representative of the rank- and-file employees of the petitioner company. In 1996, he was the "shop steward" of the union at the companys Batangas Sales Office.3 Sometime in October 1996, it happened that the route salesman for Route M11 was unavailable to make his usual routes. Since Ramirez had been driving for the route salesman for so long, the petitioner company decided to assign him as temporary replacement of the regular route salesman for routes M11, AMC and LPR. Thereafter, in a Letter dated December 5, 1996, the Officer-in-Charge of the Batangas Sales Office, Victor C. dela Cruz, informed the Officer-in-Charge of DSSDistrict 44, Rolando Manzanares, that a review of the copies of the invoices relating to the transactions of Ramirez in Rt. M11 revealed the following discrepancies: (a) the number of cases delivered to customers; (b) empty bottles retrieved from them, and (c) the amounts in Sales Invoices Nos. 3212215, 3288587, 3288763, 3288765 and 3288764, thus: a. Finance and Customers Copies of Sales Invoice No. 3288765 showing the deliberate omission in the finance copy of the delivery of 25 cases of Sprite (8 ounces) and the absence in the Customers Copy of the retrieval of 10 cases of Coke (1.5 liters). b. Finance and Customers Copies of Sales Invoice No. 3288764, a comparison of which shows that the retrieval of empty bottles amounting to Two Thousand Two Hundred Fifty Pesos (P2,250.00) reflected in the Finance Copy as having been collected was not reflected in the Customers Copy. c. Finance and Customers Copies of Sales Invoice No. 3212215 which shows that the refund of thirty-three (33) cases was reflected only in the Finance Copy. Ramirez received a Memorandum from District Office Nos. 44 and 45 requiring him to report to the said office starting December 5, 1996 until such time that he would be notified of the formal investigation of the charges against him.4 During the formal investigation conducted by a panel of investigators on December 20, 1996, Ramirez was not represented by counsel. He also manifested that he was waiving his right to be represented by counsel when the members of the panel asked him about it. Ramirez was then asked to explain the discrepancies subject of the charges, and narrated the following: (a) Re: Sales Invoice No. 3212215. Ramirez unloaded the products from the delivery truck in the morning and delivered the same to the customer. He then gave a copy of the sales invoice to the customer, which showed the quantity and prices of the products delivered. He told the customer to prepare the payment and that he would return later in the evening to collect the same. Because the customer did not have enough money on hand, he covered the deficit by returning 33 cases of empty bottles, which was reflected in the copy of the sales invoice forwarded to the sales department. Ramirez reasoned that he failed to note the return of the empty bottles in the copy of sales invoice he later delivered to the customer because the latter informed him that such copy had been misplaced. Besides, Ramirez and the customer had agreed that he (Ramirez) would just note the return of the empty bottles on the customers copy of the sales invoice the following day. Ramirez pointed out that the petitioner company did not suffer any loss because the empty bottles were turned over to it. (b) Re: Sales Invoice No. 3288587 dated October 12, 1996. Ramirez admitted that there the customer made an overpayment of P504.00. He claimed, however, that he returned the amount to the customer from his own money, and retained the P504.00 by way of reimbursement for the amount he had earlier given to the customer. Hence, the petitioner company and the customer did not suffer any loss. (c) Re: Sales Invoice No. 3288763 dated October 14, 1996. Ramirez claimed that he had erroneously written Sales Invoice No. 3288763 instead of Sales Invoice No. 3288765 (customers copy) in his RHF Report dated October 14, 1996. He also claimed to have overlooked Sales Invoice No. 3288763 when he issued a receipt to customers "Iglesia or Dolor Hernandez," and mistakenly issued Sales Invoice No. 3288763. He also declared that he failed to include Sales Invoice No. 3288765 in his

32
RHF Report as one of the cancelled invoices because it was already too late in the evening. (d) Re: Sales Invoice No. 3288764. Ramirez declared that it was only after he had unloaded and delivered the products to the customer and had given a copy of the sales invoice to the latter that he realized that the customer had returned several cases of empty bottles worth P2,250.00. He pointed out that he indicated the same in the copy of the sales invoice he submitted to the company, but failed to do so in the customers copy of the sales invoice. On February 11, 1997, Ramirez received a notice from the company informing him that his services were being terminated; that based on the investigation, it was clearly established that he violated Sections 10 and 12 of the CCBPI Employees Code of Disciplinary Rules and Regulations (Red Book); and that coupled with his prior infractions, his employment was terminated effective February 12, 1997. On March 17, 1997, Ramirez and the union filed a Complaint5 for unfair labor practice and illegal dismissal against the company with the Arbitration Branch of the NLRC, docketed as RAB-IV-3-8862-97-B. Ramirez claimed that although he was merely an acting salesman, the alleged violations for which he was dismissed, i.e., Sections 10 and 12 of the petitioner companys rules and regulations, particularly designated as fictitious sales and falsification of company reports, were normally only for full-fledged salesmen. He pointed out that: Firstly, respondent companys act of grounding individual complainant on alleged shortage in the bodega, has no factual basis, as no actual inventory was conducted; and Secondly, individual complainant was terminated for violations which are alien to his official functions and designation; and Lastly, as officer of the union, individual complainant was terminated at the time the collective bargaining negotiations was underway and at its critical stage. These facts clearly establish a classic case of an employer harassing an official of the union, which we humbly submit as a clear case of interference by an employer in the right of the workers to self-organization and to collective bargaining.6 Ramirez likewise claimed that he was denied of his right to due process, based on the following grounds: Firstly, individual complainant was dismissed without having been first issued a "notice of dismissal" which supposedly should contain the charges against him, which would be made as basis for his termination. Secondly, individual complainant was dismissed without affording him an ample opportunity to defend himself, as he was not notified in advance of the subject of the administrative investigation. Thirdly, individual complainant was terminated without just and valid cause, and in gross violation of his right to due process. Lastly, individual complainant was terminated by respondents in utter bad faith, as the decision on the said termination was arrived at, without any just and valid cause. Simply put, respondents simply acted oppressively, malevolently, and with grave abuse of prerogatives.7 For its part, the petitioner company alleged that the dismissal of Ramirez was based on the facts unearthed during the formal investigation, and that he was guilty of serious misconduct, a valid ground for termination of employment. Even if he was occupying the position of route driver/helper, he was nevertheless performing the functions and duties of a route salesman, and, as such, he not only committed fraud, but also willfully breached the trust and confidence reposed on him by the petitioner company. According to the petitioner company, considering the sanctions imposed on Ramirez for prior breaches of company rules, his dismissal from employment was with basis. The petitioner company also insisted that Ramirez was accorded his right to due process: he was notified of the charges against him, was subjected to a formal investigation during which he was allowed to explain the discrepancies, and was notified of the outcome thereof, as well as the bases of the termination of his employment. On July 31, 1998, the Labor Arbiter (LA) rendered judgment8 dismissing the complaint for lack of merit. The LA found that based on the evidence, there was a justifiable basis for the dismissal of Ramirez. According to the LA, it was of no moment that the official designation of Ramirez was "driver-helper," since he committed the infractions while he was performing the functions of an "acting salesman." The LA further found that due process had been complied with.9 Aggrieved, Ramirez appealed the decision to the NLRC, docketed as NLRC NCR CASE CA 018341-99. Ramirez argued that any errors or discrepancies he may have committed while he was assigned as route salesman were excusable. He pointed out that he was merely a driver/helper and had no formal training as route salesman before such temporary designation. He averred that the petitioner company dismissed him because of the on-going collective bargaining negotiations which were then in a critical stage. On September 20, 1999, the NLRC rendered a Resolution10 affirming the decision of the LA. It declared that the petitioner company had adduced documentary evidence to show that Ramirez failed to justify why the amount of P2,250.00 was not reflected in the customers copy of Sales Invoice No. 3288764. According to the NLRC, Ramirez also failed to justify the omission of the return of 33 cases of

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company products in the customers copy of Sales Invoice No. 3212215. The NLRC found the same to be sufficient basis for a finding of grave misconduct, which rendered Ramirez unworthy of the trust and confidence demanded of his position as an "acting salesman." Citing the ruling of this Court in Philippine Commercial International Bank v. Jacinto,11 the NLRC declared that Ramirezs claim that the penalty of dismissal was too harsh and disproportionate on account of his being a mere "acting salesman," was untenable. The NLRC, likewise, rejected Ramirezs plea of denial of due process, declaring that he was accorded the chance to be heard on the complaint against him and to adduce evidence on his behalf. It ruled that Ramirez failed to prove ill-motive on the part of the petitioner company for dismissing him. Upon the denial of his motion for reconsideration, Ramirez filed a petition for certiorari under Rule 65 of the Rules of Court with the Court of Appeals (CA), docketed as CA-G.R. SP No. 58012 wherein he alleged the following: 1. THE HONORABLE PUBLIC RESPONDENT SERIOUSLY ERRED, THEREBY COMMITTING GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION, IN AFFIRMING THE LABOR ARBITERS DECISION UPHOLDING THE LEGALITY OF INDIVIDUAL PETITIONERS DISMISSAL, CONSIDERING THAT: A. INDIVIDUAL PETITIONER WAS OFFICIALLY DESIGNATED AS "DRIVERHELPER," A POSITION WHICH DOES NOT INVOLVED (sic) THE ELEMENT OF "TRUST AND CONFIDENCE," YET, WAS TERMINATED FOR ALLEGED "LOSS OF TRUST AND CONFIDENCE;" B. INDIVIDUAL PETITIONER, AS A "DRIVER-HELPER" WAS MERELY TEMPORARILY ASSIGNED AS "ACTING SALESMAN" WHEN THE ALLEGED DISCREPANCY IN THE TRANSACTION DOCUMENTS TOOK PLACE; C. INDIVIDUAL PETITIONER WAS NOT SPECIFICALLY TRAINED AS "SALESMAN," THUS, CANNOT BE EXPECTED TO PERFORM IN THE SAME MANNER AS AN OFFICIAL ONE, WHO ARE PRECISELY "TRAINED" FOR THE ENDEAVOR. 2. THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION, IN FINDING THAT INDIVIDUAL PETITIONER WAS VALIDLY DISMISSED FOR LOSS OF TRUST AND CONFIDENCE, AS, EVEN IF THE SAID GROUND REALLY EXISTS, HE COULD HAVE BEEN ALLOWED TO CONTINUE HIS EMPLOYMENT, AS "DRIVER-HELPER" HIS OFFICIAL DESIGNATION, A POSITION WHICH DOES NOT INVOLVE AN ELEMENT OF "TRUST AND CONFIDENCE." 3. THE HONORABLE PUBLIC RESPONDENT, LIKE THE HONORABLE LABOR ARBITER A QUO, COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION, IN DECLARING THAT "COMPLAINANTS DESIGNATION AT THE TIME OF THE INFRACTION IS OF NO MOMENT." 4. IN SUM, THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION, IN NOT FINDING PRIVATE RESPONDENT GUILTY OF ILLEGAL DISMISSAL AND UNFAIR LABOR PRACTICE; AND IN NOT ORDERING PRIVATE RESPONDENT TO REINSTATE INDIVIDUAL PETITIONER TO HIS FORMER POSITION AS "DRIVER-HELPER," AND TO PAY FULL BACKWAGES, DAMAGES AND ATTORNEYS FEES.12 In a Decision dated October 25, 2000, the CA dismissed the petition.13 It ruled that the petitioners designation at the time of the infraction was of no moment; when he agreed to be an "acting salesman" for Route M11, AMC and LPR, he actually performed the duties of a salesman, and in so doing, assumed the responsibilities of the position. The CA further ratiocinated that notwithstanding Ramirezs lack of training, he had assumed and performed the duties of a salesman; hence, he was obligated to do so with due care, dedication, and with due regard to the exercise of the degree of diligence to prevent the commission of any serious error, mistake or blunder on his part. The CA also ruled that Ramirez had not been denied his right to due process. It concluded that the falsification of the sales invoices and receipts violated company rules and policy, and that he was guilty of gross misconduct which also constituted a breach of trust and confidence reposed on him by the petitioner company. Undaunted, the petitioner filed a motion for the reconsideration of the decision contending that: THE HONORABLE COURT SERIOUSLY ERRED WHEN IT HELD THAT THE FINDING AND DECLARATION OF THE LABOR ARBITER AND PUBLIC RESPONDENT THAT INDIVIDUAL PETITIONERS "DESIGNATION AT THE TIME OF THE INFRACTION IS OF NO MOMENT" HAVE LEGAL BASIS.14 THE HONORABLE COURT SERIOUSLY ERRED WHEN IT FAILED TO CONSIDER THAT INDIVIDUAL PETITIONER WAS OFFICIALLY DESIGNATED AS "DRIVER-HELPER," A POSITION WHICH DOES NOT INVOLVED (sic) THE ELEMENT OF "TRUST AND CONFIDENCE."15 THE HONORABLE COURT SERIOUSLY ERRED IN NOT FINDING THAT THE INDIVIDUAL PETITIONERS RIGHT TO DUE PROCESS WAS GROSSLY VIOLATED.16

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This time, the CA found merit in petitioners cause and, on January 30, 2001, issued a Resolution granting the said motion, and set aside its earlier ruling. WHEREFORE, premises considered, the petitioners motion for reconsideration is hereby GRANTED, and Our decision of 25 October 2000 is vacated. The assailed resolutions of public respondent dated September 20, 1999 and December 21, 1999 are REVERSED and SET ASIDE, and a new judgment is rendered, ordering the respondent company to reinstate petitioner Florentino A. Ramirez to his job as driver-helper without loss of seniority and other rights, and to pay him his full backwages, allowances and other benefits until his retirement, without diminution, or their monetary equivalent, plus 10% as attorneys fees. Costs against private respondent.17 The CA ratiocinated that as an acting salesman who did not possess the required basic training of a route salesman, Ramirez was made to discharge the duties of a route salesman. It also emphasized that as driver/helper, his job was not a position reposed with trust and confidence. Thus, the CA declared that the petitioner committed a mere oversight of certain internal control procedures in the proper recording of his sales and other transactions, resulting in the shortage in one transaction, offset by an overage in another. While he was inefficient and incompetent as a route salesman, he was not so as a driver/helper. Considering that he was merely discharging the functions of a salesman in an acting capacity, and that the petitioner company did not suffer any loss on account of the violations and/or omissions of Ramirez, the penalty of dismissal was too harsh. The CA also ruled that there was no dishonesty or a demonstration of moral perverseness as would justify the claimed loss of confidence attendant to the job, and, as such, gave Ramirez the benefit of the doubt. On the issue of due process, the CA ruled that the petitioner was not afforded due process because the panel of investigators focused on Ramirezs violations of internal control procedures instead of the substance of the charges against him.18 Aggrieved by the appellate courts volte face, the petitioner company filed the instant petition for review on certiorari, alleging that: THE HONORABLE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE CONTRARY TO LAW AND THE SETTLED RULINGS OF THE SUPREME COURT IN THAT: A. THE RESPONDENT WAS LAWFULLY TERMINATED FROM EMPLOYMENT. B. THE COURT OF APPEALS ACTED WITHOUT JURISDICTION IN RENDERING THE QUESTIONED RESOLUTIONS. C. THE FINDINGS OF FACT BY THE COURT OF APPEALS ARE CONTRARY TO THOSE OF THE HONORABLE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION AND ARE MERE CONCLUSIONS REACHED WITHOUT CITATION OR SPECIFIC EVIDENCE AND/OR ARE PREMISED ON THE PURPORTED ABSENCE OF EVIDENCE CONTRADICTED BY THE EVIDENCE ON RECORD.19 The core issue for resolution is whether or not respondent Florentino Ramirez was dismissed by the petitioner without just or valid cause. The Respondent Committed Irregularities in the Performance of His Duties as Route Salesman We find, as the CA did in its assailed Resolution, that the respondent, by his acts and omissions, committed irregularities in the performance of his duties. He made it appear in the customers copy of Sales Invoice No. 3212215 that the latter returned 33 cases of family-size empty bottles valued at P4,092.00; however, such transaction was not reflected in the invoice submitted by him to the petitioner company. A perusal of the customers copy of the sales invoice would show that the customer owed the petitioner company P9,045.00. However, in the petitioner companys copy of the sales invoice, the respondent declared that the customer returned 33 cases of empty bottles valued at P4,092.00; hence, the customer owed the petitioner only P4,953.40 which the customer paid. The respondent failed to indicate the return of the empty bottles in the petitioner companys copy of the sales invoice. The explanation of the respondent, that while he intended to correct the customers copy of the sales invoice he was unable to do so because such customers copy had been misplaced by the customer, is unacceptable. The respondent should have presented the affidavit of the customer to corroborate such claim. The fact that it turned out that the customer still had his copy of the sales invoice does not sit well with the respondents cause. In fine then, the explanation given by the respondent during the panel investigation is untrue. There is no dispute that the respondent overcharged the customer in Sales Invoice No. 3288587 in the amount of P504.00, and that the respondent returned the overpayment to the customer. However, the respondent was burdened to give a valid explanation for such overcharging on the customer, which he failed to do. The respondent also admitted that he failed to indicate in the customers copy of Sales Invoice No. 3288764 the customers retrieval of 210 cases of empty Coca-Cola bottles of varied sizes, amounting to P2,250.00. The respondent failed to give a valid explanation for his omission, although there appears to be no doubt that, indeed, the customer returned the 210 empty bottles to the petitioner through him. The Penalty of Dismissal For the Respondents Infraction is, however, Too Severe

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In order to effect a valid dismissal of an employee, the law requires that there be just and valid cause as provided in Article 282 and that the employee was afforded an opportunity to be heard and to defend himself.20 Pursuant to Article 282 of the Labor Code, an employees services can be terminated for the following just 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 duty-authorized representative; and (e) Other causes analogous to the foregoing. In termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause.21 Considering the nature of the charges and the penalties therefor, the petitioner is bound to adduce clear and convincing evidence to prove the same. We have always held that an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees.22 It is recognized that company policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally valid and binding on the parties and must be complied with until finally revised or amended, unilaterally or preferably through negotiation, by competent authority. The Court has upheld a companys management prerogatives so long as they are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements.23 For misconduct or improper behavior to be a just cause for dismissal, the same must be related to the performance of the employees duties and must show that he has become unfit to continue working for the employer.24 In cases when an employer may dismiss an employee on the ground of willful disobedience, there must be concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.25 In the present case, the respondent was dismissed for dishonesty, more specifically for violation of the company policy, and, more particularly, Sections 10 and 12 of Company Rules and Regulation No. 005-85, Fictitious sales transactions; Falsification of company records/data/documents/reports; Conspiring or conniving with, or directing others to commit fictitious transactions; and inefficiency in the performance of duties, negligence and blatant disregard of or deviation from established control and other policies and procedures. However, the petitioner failed to adduce clear and convincing evidence that the respondent had fictitious sales transactions, or that he falsified company records/documents/reports, or that he connived with customers of the petitioner to persuade them to commit fictitious transactions. It is undisputed that the respondent entered into the sales transactions subject of the complaint of the petitioner for and in behalf of the petitioner. While it is true that the respondent failed to indicate the return of the empty bottles made by a customer either in the petitioner companys copy of the sales invoice or in his reports on his sales transactions; and overcharged a customer in one transaction, there is no clear and convincing evidence that the respondent did so intentionally, for a wrong or criminal purpose. There is also no showing that the respondent intentionally defied the lawful orders or regulations of the petitioner. Indeed, as declared by the CA in its assailed resolution, the petitioner did not suffer any material loss by the respondents actuations: At the outset, it may be stated that the petitioners positive allegation that the individual petitioner was also an official of the petitioner union, being the latters "shop steward" at respondent companys Batangas Sales Office, as the real motive for his termination, has not been established by sufficient proof to justify a finding in their favor.1vvphi1.nt A quick review of the salient facts shows that individual petitioner Florentino A. Ramirez was hired by private respondent company on July 1, 1982, as "driverhelper," with the latest basic salary of P11,285.00 as of February 1997 and an average commission of P2,800.00 a month. As such "driver-helper," his official duties and responsibilities, among others, are as follows: (a) as driver, he checks the trucks oil, water, wheels, etc.; (b) as helper, he is tasked with loading and unloading trucks load; putting bottles in the coolers and displays company products to each outlet or customers store. Obviously, this job did not involve the same amount of trust and confidence as that of a salesman. Officially, petitioner Ramirez had no other alternate duties. It is not refuted that individual petitioner did not possess the required basic training to act as salesman, and that this fact was known to the private respondent company at the time it designated him as acting salesman during those days, particular October 02, 12, and 14, 1996, when no route salesman was available. It is also self-evident that the job description of the driver-helper hardly includes any task which would significantly overlap with those of the salesman as would afford the driver-helper, through time perhaps, the experience to adequately discharge the duties of a salesman. In fact, as admitted by the private respondent, because of the amount of trust and confidence involved in the job of a salesman, rigorous requirements and

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internal control procedures are enforced, and understandably, as well as strict accountability. From the parties various pleadings both in this petition, as well as in the case below, what becomes clear is that the private respondent suffered no damage whatsoever from the actuations of the individual petitioner. His alleged dishonesty was not proven. What he committed was merely non-compliance with, or oversight of, certain internal procedures in the proper recording of his sales and other transactions, resulting in a shortage in one transaction, which was nevertheless offset by an overage in another. It could be allowed that, indeed, he was inefficient and incompetent for the function of a salesman which he had to temporarily perform.26 In pointing out that the private respondent suffered no material loss, We note that it was very possible that the discrepancies found in the documents reflecting the individual petitioners transactions as an "acting salesman" could very well have been due to simple inadvertence and the fact that the customers, who for some reason failed to pay their accounts with exact cash but instead partly with empty bottles, later misplaced their copy of the invoice. Thus, their copy could not be corrected seasonably. The recording was very likely bungled further by individual petitioners lack of training and familiarity with the strict recording procedures. We are inclined to give him this benefit of the doubt. That the individual petitioner has not been specifically trained as salesman is undisputed. It is likewise uncontroverted that before an employee could qualify as a full-fledge "salesman," the respondent company requires as a condition sine qua non that he first undergo "basic salesman training" and several seminars to be acquainted with his specific functions. This is understandable, because the company salesman not only must find customers, promote and sell its products, but he also must account for his sales and inventory to the last centavo, every day, according to its internal controls and policies. It is obvious that this was not so with the individual petitioner. He was tasked with a duty involving trust and specialized skills for which he was never trained. His alleged failure to comply strictly with all the procedures, of which he was unfamiliar, was to be expected. Yet Ramirez was penalized as a full-fledge salesman, not as a driver-helper who was forced to perform the functions of acting salesman or perhaps risk being charged with insubordination. Then it was not just any penalty meted out to him, as if there is only one punishment possible for him: the supreme sanction of dismissal. We cannot but agree that the extreme penalty of dismissal was too harsh and manifestly disproportionate to the infraction committed, which appears to have been fully explained, and, in fact, to be not inexcusable under the circumstances. There was no dishonesty, no demonstration of such moral perverseness as would have justified the claimed loss of confidence attendant to the job. The company must bear a share of the blame for entrusting a mere driver-helper with a highly fiduciary task knowing that he did not possess the required skills. At most, Ramirez failed to comply with, or even violated, certain company rules of internal control procedures, but to say that it was deliberate is gratuitous. Perhaps, individual petitioner should first have been given a mere warning, then a reprimand or even a suspension, but certainly not outright dismissal from employment. One must keep in mind that a workers employment is property in the constitutional sense, and he cannot be deprived thereof without due process and unless it was commensurate to his acts and degree of moral depravity. 27 In Charles Joseph U. Ramos v. The Honorable Court of Appeals and Union Bank of the Philippines,28 the Court held that, in order to validly dismiss an employee on the ground of loss of trust and confidence under Article 282 of the Labor Code of the Philippines, the following guidelines must be followed: 1. The loss of confidence must not be simulated; 2. It should not be used as a subterfuge for causes which are illegal, improper or unjustified; 3. It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; 4. It must be genuine, not a mere afterthought, to justify earlier action taken in bad faith; and 5. The employee involved holds a position of trust and confidence.29 In Sulpicio Lines, Inc. v. Gulde,30 the Court emphasized that loss of trust and confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility or trust and confidence. As such, he must be invested with confidence on delicate matters, such as the custody handling or care and protection of the property and assets of the employer. In order to constitute a just cause for dismissal, the act complained of must be work-related. It must be shown that the employee is unfit to continue to work for the employer. Further, well-settled is the rule that "for loss of trust and confidence to be a valid ground for dismissal of an employee, it must be substantial and founded on clearly established facts sufficient to warrant the employees separation from employment."31 We agree that route salesmen are likely individualistic personnel who roam around selling softdrinks, deal with customers and are entrusted with large asset and funds and property of the employer. There is a high degree of trust and confidence reposed on them, and when confidence is breached, the employer may take proper disciplinary action on them.32 The work of a salesman exposes him to voluminous

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financial transactions involving his employers goods. The life of the softdrinks company depends not so much on the bottling or production of the product since this is primarily done by automatic machines and personnel who are easily supervised but upon mobile and far-ranging salesmen who go from store to store all over the country or region. Salesmen are highly individualistic personnel who have to be trusted and left essentially on their own. A high degree of confidence is reposed on them because they are entrusted with funds or properties of their employer.33 The designation of the respondent, who was employed as driver-helper, but temporarily assigned as route salesman for a period of three (3) days, did not automatically make him an employee on whom the petitioner reposed trust and confidence, for breach of which he shall be meted the penalty of dismissal. The assumption by the respondent, for only three days, of some of the duties of a route salesman on orders of the petitioner, did not automatically make him an employee holding a position of trust and confidence. Despite his additional duties, the respondent remained a driver-helper of the petitioner. Thus, respondent cannot be dismissed pursuant to Article 282 of the Labor Code. The rulings of the Court in Charles Joseph U. Ramos v. The Honorable Court of Appeals and Union Bank of the Philippines,34 cited by the petitioner are not on all fours applicable in this case. This is so because in Ramos, prior to the dismissed employees appointment as an acting branch manager, he was the branch cashier, the position next to the branch manager.l^vvphi1.net The positions of branch cashier and branch manager are positions endowed with trust and confidence. Moreover, upon the appointment of Ramos as Officer-In-Charge (OIC) branch manager, another person was appointed to serve as OIC branch cashier. Thus, for that period of time, Ramos ceased to be a branch cashier when he was appointed as OIC branch manager. In this case, however, the respondent continued to be a driver/helper when he was designated as an acting salesman. Although barren of experience and training as route salesman, the respondent had no choice but to comply with the petitioners orders and tried his best to do the task assigned to him. The ruling of the Court in Philippine Commercial International Bank v. Jacinto,35 is not also applicable in the present case. In that case, Jacinto was a customer relations assistant and was assigned to act as an alternate FX Teller when the FX Teller was not available. Both positions involved trust and confidence. Moreover, the employee (Jacinto) was not dismissed but only meted the penalty of suspension. In its assailed resolution, the CA ruled: That once, back in 1992, Ramirez had borrowed some empty bottles from a customer but later returned them the same day and was suspended for it, or that he went AWOL several times in 1996 and thus was meted a suspension of 2 days, are the only blemishes in his record of any significance. To our mind, coupled with his present predicament, these could not justify such a professed loss of confidence as to sever him from his employment of 14 years.36 We agree with the CA. As the Court ruled in Pepsi-Cola Distributors of the Philippines, Inc. v. NLRC:37 Moreover, private respondent was already penalized with suspensions in some of the infractions imputed to him in this case, like sleeping while on route rides, incomplete accomplishment of sales report and his failure to achieve sales commitments. He cannot again be penalized for those misconduct. The foregoing acts cannot be added to support the imposition of the ultimate penalty of dismissal which must be based on clear and not on ambiguous and ambivalent ground.1a\^/phi1.net Considering the factual backdrop in this case, we find and so rule that for his infractions, the respondent should be meted a suspension of two (2) months. IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Resolution of the Court of Appeals dated January 30, 2001 affirming the assailed resolution of the NLRC is SET ASIDE. The Decision of the Court of Appeals dated October 25, 2000 is AFFIRMED with the MODIFICATION that the respondent is meted the penalty of Two (2) months suspension. No costs.

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petitioner, vs NATIONAL LABOR RELATIONS COMMISSION and ISABELO O. VILLACENCIO, respondents. Assailed in this petition for certiorari under Rule 65 of the Revised Rules of Court are the Decision 1 dated December 27, 1994 of the public respondent National Labor Relations Commission (NLRC) in NLRC Case No. V-0423-93 (RAB Case No. 0702-016690) which ordered the payment of separation pay and backwages to private respondent Isabelo O. Villacencio, and its Resolution 2 dated August 18, 1995 denying petitioner's Motion for Reconsideration. The facts show that private respondent Isabelo O. Villacencio worked with petitioner ACMDC from January 23, 1970 to February 2, 1990. He started as an ordinary laborer/helper in the Mill Department. In 1973, he became supervisor of the Tailings Disposal Department. In 1982, he was elevated as a junior staff of the department. Finally, he was promoted general foreman of the Tailings Disposal and Water Supply Department with a monthly salary of P7,440.00. He held this position until his services were terminated on February 2, 1990. 3 As general foreman, Villacencio was the second-to-the-highest man in the department which has a field office located in Magdugo, Toledo City. Under Villacencio were some fifty nine (59) workers whom he supervised through regular field inspections. Villacencio was assigned a service jeep and a service motorcycle which he used alternately. He was given the privilege to withdraw the necessary fuel/gasoline for the vehicles at the Transport Department located inside the main compound of ACMDC. 4 On September 8, 1989, Engineer Conrado Sanchez of the Services Division wrote a memorandum requesting that Villacencio be investigated for alleged anomalies at the Magdugo Tailings Field Office. Villacencio was charged before the Special Investigation Board with acts of malfeasance consisting of: 1. withdrawal of company-owned gasoline for the refueling of his personal jeep; 2. use of company personnel on company time as well as company-owned materials for the assembly of a jeep not belonging to the company; and 3. granting of authority to non-company personnel to withdraw company-owned stocks. He was summoned on January 9, 1990, and investigations were conducted on January 12 and 13, 1990. 5 G.R. No. 122033 May 21, 1998 ATLAS CONSOLIDATED MINING & DEVELOPMENT CORPORATION, On January 25, 1990, the Special Investigation Board 6 found Villacencio guilty of the charge of withdrawing on various dates a total of 192 liters of company-owned gasoline which he used to refuel his private jeep and of the charge of using company personnel on company time in the assembly of his jeep. The third charge was

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dismissed for insufficiency of evidence. Villacencio was dismissed from work on February 2, 1990. He lodged a complaint against ACMDC before the Regional Arbitration Branch No. VII, NLRC, Cebu City, on February 19, 1990 for illegal dismissal with prayer for reinstatement and backwages plus damages. The case was assigned to Labor Arbiter Reynoso A. Belarmino. 7 Meanwhile, ACMDC initiated a criminal complaint against Villacencio for the misappropriation of 192 liters of gasoline amounting to P1,086.72. An Information for Estafa was filed against Villacencio before the Municipal Trial Court of Toledo City. After trial, he was found guilty and sentenced to suffer the indeterminate penalty of two (2) months and one (1) day of arresto mayor as minimum to one (1) year and eight (8) months of prision correccional as maximum, and to pay ACMDC the amount of P1,086.72 for the misappropriated gasoline. 8 Villacencio appealed his conviction to the Regional Trial Court of Toledo City. For failure of the prosecution to establish the guilt of Villacencio beyond reasonable doubt, the appellate court acquitted him. 9 On August 9, 1993, Labor Arbiter Belarmino rendered a Decision 10 dismissing Villacencio's complaint of illegal dismissal for lack of merit. Aggrieved, Villacencio appealed to the NLRC. On December 27, 1994, the NLRC reversed the Labor Arbiter's decision. It held: We have thoroughly reviewed the record of this case and found no sufficient evidence against the complainant for wrongdoing. . . . xxx xxx xxx WHEREFORE, the respondent is hereby ORDERED to pay complainant separation pay equivalent to one-half month pay for every year of service, a fraction of 6 months service being considered one whole year. Complainant's severance pay is P74,400.00 (January 23, 1970 to February 2, 1990; 1/2 of P7,440.00 = P3,720.00 x 20 years) . Appealed Decision Reversed. SO ORDERED. 11 Both parties filed their respective Motion for Reconsideration. ACMDC's motion assailed the public respondent's decision for allegedly misapprehending the Labor Arbiter's decision. On the other hand, Villacencio's motion prayed for reinstatement and award of backwages in addition to separation pay. On August 18, 1995, the public respondent rendered a Resolution granting Villacencio's prayer for backwages and denying ACMDC's motion. Its dispositive portion reads: xxx xxx xxx WHEREFORE, the Motion for Reconsideration filed by respondent-appellee is hereby DENIED for lack of merit. On the other hand, the Motion for Reconsideration filed by complainant-appellant is granted and our Decision is hereby modified to include backwages to complainant from February 1990 up to the present. SO ORDERED. 12 Hence, the instant petition. The main issue is whether or not public respondent NLRC acted with grave abuse of discretion amounting to lack of jurisdiction in reversing the Decision of the Labor Arbiter and holding private respondent's dismissal illegal. Both parties urge us to weigh the evidence presented by them in light of the contradictory factual findings of the Labor Arbiter and the public respondent. We shall do so to settle the conflict. 13 In illegal dismissal cases, the employer bears the burden of proof to show that the dismissal is for a just or authorized cause. 14 The charges against private respondent are: (1) withdrawal of 192 liters of gasoline from company stocks for his private use; and (2) knowingly allowing company personnel to work on company time in the assembly of a privately-owned jeep. To prove the first charge, petitioner presented the Tenders Logbook showing the unsigned entries of gasoline withdrawals allegedly made by private respondent. Wilfredo Caba and Bienvenido Villacencio also testified that private respondent refused to sign the entries when requested to do so. 15 The evidence for the private respondent shows that during his more than twenty (20)year stint with petitioner, he received several awards and commendations for his contribution in the areas of production, services and smooth operation of his department. The management recognized his, ability in handling his subordinates and in protecting company assets in relation to his assigned duties. As a stickler for company rules, he never held back on issuing warnings, admonitions and even suspensions against erring subordinates. Consequently, he earned the ire of some of his subordinates. Among them were Wilfredo Caba whom he suspended on December 12, 1987 for sleeping while on duty; June Climaco whom he suspended on September 19, 1987 for failing to observe safety rules in handling flammable materials; Felix Gonzales whom he warned for quitting work earlier than the prescribed time; and Bienvenido Villacencio, together with Caba, Gonzales and F. Garnece, whom he warned on January 18, 1990 for leaving blank spaces on the withdrawal logbook. He also denied the requests of Caba, Villacencio, Gonzales and Climaco for promotion from 1988 to 1989. 16 He averred that these workers made willful assertions of falsehood in charging him and testifying against him.

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In sum, private respondent's position is that the logbook entries do not prove that he received the 192 liters of gasoline since his signature does not appear therein and that the witnesses presented by the petitioner to explain the absence of his signature in the logbook entries were motivated by vengeance since he offended their feelings when he disciplined them and denied their requests for promotion. Loss of trust and confidence to be a valid ground for an employee's dismissal must be clearly established. 17 We hold that the proofs presented by the petitioner are insufficient to show dishonesty on the part of the private respondent. The Standard Guidelines of ACMDC require that all withdrawals of consumable items and the borrowing of company materials and equipments should be recorded in the Tender's Logbook by the tender on duty and should be signed by the withdrawing party. The tender on duty is also required to immediately report to his supervisor any discrepancy, error or irregularity. Needless to stress, the best evidence of any withdrawal is the Tender's Logbook. In the case at bar, the gasoline withdrawal entries were made by tenders Caba and Villacencio. Private respondent's signature does not appear in the logbook, thus, there is no proof that he actually withdrew and received the gasoline. The same entries also indicate that the gasoline was filled into the "service jeep" or "service pick-up" assigned to the private respondent. No clear reference was made that the said gasoline was used in the personal jeep of private respondent. Accordingly, the logbook cannot be relied upon to establish the alleged dishonesty of private respondent. The explanation of Caba and Bienvenido Villacencio on the lack of signature of the private respondent on the logbook is not persuasive. For one, they appear to have an axe to grind against the private respondent. For another, they admitted that persons other than the assigned tenders could get hold of the logbook and write entries thereon. The entries in the logbook, are therefore not tamper proof. It has also been established that the service jeep of private respondent was used by other supervisors who have no privilege to withdraw gasoline from the company supply. 18 All these give credence to private respondent's contention that the 192 liters of gasoline were filled into his service jeep at the instance of the supervisors who caused the same to be charged against him. The second charge against the private respondent is likewise bereft of proof. The Solicitor General's observation on this factual issue is correct, viz: xxx xxx xxx Similarly, anent the charge of use of company personnel to work overtime on private respondent's personal jeep, it needs more than the testimony of witness June Climaco for the charge to prosper. The Authorization to Work Overtime dated May 14, 1989 (Exh. "S", p. 38, Records) indicates that A. Saavedra, A. Sepada and V. Rago were among those authorized to work overtime "to assist in emergency repair of busted 280 CIC Tailings Line' (ibid) on that date. The same does not show or affirm petitioner's contention that said workers were not actually authorized or did not actually perform the required work but were at the Magdugo Field Office working on private respondent's personal jeep. On the contrary, the Authorization to Work Overtime (Exhibit "S") appears regular on its face, as in fact, the same bears the imprimatur indicated by the signature not only of private respondent alone but of three (3) other officers, namely: the Supervisor, J. V. Climaco, Jr., the Department Head, J. N. Tecson, and the Division Manager, C. N. Sanchez. If ever there was an irregularity, these officers would likewise have to be answerable to the company, instead of letting private respondent bear the burden alone. Thus, petitioner's version that the three (3) workers did not perform the authorized work cannot be accorded credence since the same is belied by the very document (Exh. "S") adduced by petitioner. It cannot be upheld on the mere say-so of witness Climaco who, in the first place, admits to have testified upon petitioner's request (TSN, July 17, 1991 p. 30) and may have been moved by some ill-feelings against private respondent who, alone time, meted him the penalty of suspension (p. 60, Records). 19 We reject the ruling of the Labor Arbiter that since private respondent neglected to inspect the logbook and thus failed to discover the irregularity, he committed breach of trust. Settled is the rule that under Article 283 (c) of the Labor Code, the breach of trust must be willful. 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 employer's arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. It should be genuine and not simulated; nor should it appear as a mere afterthought to justify earlier action taken in bad faith or a subterfuge for causes which are improper, illegal or unjustified. It has never been intended to afford an occasion for abuse because of its subjective nature. 20 Private respondent explained that he failed to inspect the logbook for about two (2) months before its disappearance because he was preoccupied with some emergency works brought about by a storm. 21 With the foregoing explanation, it cannot be said that private respondent's failure was willful. IN VIEW WHEREOF, the assailed Decision and Resolution of public respondent NLRC are AFFIRMED. Costs against petitioner.

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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 P43,100.003 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 Agreement5 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 Pumarez8 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

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. This is a petition for review under Rule 45 of the Rules of court assailing the Decision1 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

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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 Victoriano12 and Nat Balayan13 voluntarily executed handwritten statements on the matter. According to their respective accounts of what transpired on July 10, 1999, a 10wheeler 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 statement16 regarding the matter. In his Explanation17 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.

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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 Director19 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.

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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 Memorandum22 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.

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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.

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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 rankand-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 email 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

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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 reexamine 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 28231 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 Commission36 the guidelines for the application of the doctrine of loss of confidencea. 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;

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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]. 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 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.

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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 separation56. 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?

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any such false and malicious statements against any of his superiors.62 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 US59 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 vicepresident 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 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.

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G.R. No. 139526 October 25, 2005 RAMATEK PHILIPPINES, INC. and MORRIS WEINBERG, Petitioners, vs. MA. ANELIA DE LOS REYES, Respondent. The Case This is a petition for review1 of the Resolutions2 dated 31 March 1999 and 6 July 1999 of the Court of Appeals in CA-G.R. SP No. 52018. The Court of Appeals dismissed the petition for having been filed out of time. The Facts In August 1995, RAMATEK PHILIPPINES, INC. ("RAMATEK") hired Ma. Anelia de los Reyes ("Anelia") as RAMATEKs comptroller. In September 1995, RAMATEK entered into a sub-contracting agreement with Sicar Micro-Electronics Corporation ("Sicar Corporation"). Nestor de los Reyes ("Nestor"), Anelias husband, was a major stockholder, Treasurer and Chief Operations Officer of Sicar Corporation. On 5 July 1996, Sicar Corporation and Nestor filed a civil case for damages against Lawrence Esparaz, Percy Jarin, and Edgardo Linsangan ("RAMATEK officials"), in their capacity as Plant Manager, Secretary, and Operations Manager, respectively, of RAMATEK for their unilateral termination of the contract between RAMATEK and Sicar Corporation without authority from RAMATEK.3 Later, Morris Weinberg ("Weinberg"), the chairman of the Board of Directors of RAMATEK, informed Anelia that she should file a leave of absence while the case between RAMATEK and Sicar Corporation was ongoing. On 31 July 1996, Anelia filed an indefinite leave of absence effective 1 August 1996 until "after the negotiations of the case."4 On 5 August 1996, Weinberg sent an electronic mail ("e-mail") to Anelia, requesting for Anelias voluntary resignation. The e-mail reads: ANELIA: IT IS WITH GREAT REGRET THAT I MUST INFORM YOU OF MY REACTION TO THE SICAR AFFAIR. YOUR CONNECTION IN THIS MATTER HAS CAUSED ME TO LOSE MY FAITH AND TRUST IN YOU. IT IS A MAJOR

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CONFLICT OF INTEREST SITUATION. I HAVE ASKED RAMATEKS MANAGING DIRECTOR TO REQUEST FROM YOU A VOLUNTARY RESIGNATION INSTEAD OF IMMEDIATE TERMINATION. AND TO DO THE SAME FOR ANY OTHER EMPLOYEES INVOLVED. I REGRET HAVING TO TAKE THIS ACTION. IT PAINS ME VERY MUCH. MORRIS WEINBERG5 In a letter dated 9 September 1996, RAMATEK required Anelia to explain within 72 hours some of her allegedly questionable transactions. RAMATEKs President and General Manager Lawrence Esparaz ("Esparaz") signed the letter which reads: September 9, 1996 Ms. Ma. Anelia Delos Reyes 2484 Aladdin Street, Pandacan, Manila Dear Ms. Delos Reyes: A review of the various records and transactions of your office yielded serious questions that require explanation on the following, to wit: 1) The bidding of fourteen (14) pcs. of iron works (table) wherein you awarded the account to Ms. Viola Mocorro who offered a bid of Phil. Pesos 37,700.00 or about Phil. Pesos 2,692.85 per table, as against Mr. Ronnie Yucarans minimum bid offer of Phil. Pesos 2,105.00 per table; 2) Your purchase of five (5) units Olympia Heavy Duty typewriter, Model SG3-N, 15" carriage, Elite Type from Mitec International Corporation, at a cost of Phil. Pesos 14,000.00 per unit, when there was an existing offer from FCR Business Machines Corp. at a much reduced price of Phil. Pesos 11,950.00 per unit; 3) The roofing works at the Cordova Condominium Building which you awarded to Ms. Viola Mocorro at a cost of Phil. Pesos 250,000.00 as against a bid/quotation submitted by a certain Wally Bondoc for the same scope of work only at a cost of Phil. Pesos 90,000.00; 4) Your cash advances amounting to Phil. Pesos 500,000.00 per SBTC Check No. 285965 dated January 12, 1996, for the purchase of furnitures and fixtures for the BF House, which to date remain unliquidated, despite repeated demand, and/or lapse of (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." Your strict compliance is hereby enjoined. Very truly yours, RAMATEK PHILIPPINES, INC. (signed) LAWRENCE ESPARAZ President/General Manager6 Anelia failed to claim the letter which RAMATEK sent to her by registered mail. RAMATEK sent Anelia another letter dated 2 October 1996 inviting Anelia to attend an administrative investigation on her alleged questionable transactions.7 The investigation was scheduled on 10 October 1996 at RAMATEKs office in Carmona, Cavite. Anelia was absent at the investigation, during which the investigating body8 concluded that Anelias transactions were grossly disadvantageous to RAMATEK considerable length of time; 5) Your failure to submit/produce various company documents, paperworks, despite the lapse of sufficient time from its demand; 6) Unauthorized deposit of company funds/checks into personal bank accounts. Please explain in writing, within 72 hours, why no disciplinary action should be imposed against you for violation of Article 282 of the Labor Code of the Philippines which provisions we quote hereunder: "ART. 282. Termination by employer. An employer may terminate an employment for any of the following just 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;

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and constituted sufficient ground for Anelias termination under Article 282(c) of the Labor Code.9 In a letter dated 14 October 1996, RAMATEK terminated Anelias employment effective 15 October 1996 for committing the alleged anomalies amounting to breach of trust and confidence.10 Meanwhile, on 20 September 1996, Anelia filed with the National Labor Relations Commission ("NLRC") a Complaint for illegal suspension, illegal dismissal, illegal withholding of salary, allowances and 13th month pay, and damages. On 5 August 1997, the Labor Arbiter ruled in favor of Anelia. The Labor Arbiter held that petitioners failed to prove their allegation that Anelia engaged in anomalous transactions grossly disadvantageous to RAMATEK. The Labor Arbiter found the charges against Anelia false and baseless. Further, the Labor Arbiter held that RAMATEK terminated Anelia without due process. The Labor Arbiter stated that the records show that RAMATEK made the decision to dismiss Anelia even before RAMATEK requested Anelia to explain the charges against her. The dispositive portion of the Labor Arbiters decision reads: WHEREFORE, judgment is hereby rendered finding complainant to have been illegally dismissed from employment by respondent corporation and concomitantly ordering said respondent company to reinstate her with backwages. Respondent company is also ordered to pay her salary for July 15 August 1, 1996, her proportionate 13th month pay for 1996 and attorneys fees equivalent to ten (10%) percent of the financial award. Other claims are hereby ordered dismissed for lack of merit. SO ORDERED.11 On 15 August 1997, petitioners appealed the Labor Arbiters decision. On 12 December 1997, the NLRC dismissed the appeal for failure to perfect the same. The NLRC found that the surety bond filed by petitioners was spurious. Petitioners filed a replacement bond and the NLRC reconsidered its decision on petitioners motion. The NLRC held that there was no showing that petitioners purposely posted a fake surety bond. In a Resolution dated 31 August 1998, the NLRC upheld the factual findings of the Labor Arbiter. However, the NLRC found that Anelias reinstatement was no longer feasible due to strained relations and held that Anelia should instead be granted separation pay. Further, in accordance with Article 11112 of the Labor Code, the NLRC held that the attorneys fees should be based on the awards representing unpaid salary for the period of 15 July to 1 August 1996 and the 13th month pay. The dispositive portion of the NLRC Resolution reads: The Court of Appeals dismissed the petition based on Section 4, Rule 65 of the 1997 Rules of Civil Procedure, as amended by this Court in an En Banc Resolution dated 21 July 1998. The resolution, which is contained in Circular No. 39-98,14 took effect on 1 September 1998. The amended provision reads: SEC. 4. Where and when petition to be filed. The petition may be filed not later than sixty (60) days from notice of the judgment, order or resolution sought to be assailed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, and unless otherwise provided by law or these Rules, the petition shall be filed in and cognizable only by the Court of Appeals. If the petitioner had filed a motion for new trial or reconsideration in due time after WHEREFORE, the instant motion for reconsideration is hereby GRANTED. The appealed Decision is hereby AFFIRMED with MODIFICATION in that aside from the payment of full backwages reckoned from date of dismissal on August 5, 1996 up to the finality of this Decision (less wages, if any, received by complainant by virtue of reinstatement, actual or payroll, if at all, during the pendency of the appeal), respondents are further ordered to grant complainant separation pay equivalent to one (1) month salary per year of service, reckoned from date of employment on August 1995 up to the finality of this decision. The attorneys fees awarded should be adjusted and based only on the awards representing the unpaid salary covering the period from July 15 to August 1, 1996 and 13th month pay. SO ORDERED.13 Petitioners received on 27 October 1998 the NLRC Resolution. On 5 November 1998, petitioners filed a motion for reconsideration, which NLRC denied in a Resolution dated 27 November 1998. Petitioners received the NLRC Resolution denying the motion for reconsideration on 25 January 1999. On 26 March 1999, petitioners filed a petition for certiorari with the Court of Appeals. On 31 March 1999, the Court of Appeals dismissed the petition for having been filed out of time. Hence, this petition. The Ruling of the Court of Appeals

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notice of said judgment, order or resolution, the period herein fixed shall be interrupted. If the motion is denied, the aggrieved party may file the petition within the remaining period, but which shall not be less than five (5) days in any event, reckoned from notice of such denial. No extension of time to file the petition shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days. (Emphasis supplied) The Court of Appeals stated that when petitioners filed their motion for reconsideration on 5 November 1998, eight (8) days had elapsed from 27 October 1998 when they received the NLRC Resolution dated 31 August 1998. When the NLRC denied petitioners motion for reconsideration, which denial petitioners received on 25 January 1999, petitioners had only the remaining fifty-two (52) days or until 18 March 1999 to file the petition for certiorari. Thus, the Court of Appeals held that the petition for certiorari that petitioners filed on 26 March 1999 was clearly filed out of time. The Issues Petitioners raise the following issues: 1. THE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT DENIED DUE COURSE TO THE PETITION ON THE GROUND THAT THE REGLEMENTARY PERIOD HAD ALREADY LAPSED. 2. THE COURT OF APPEALS ERRED IN NOT GIVING DUE COURSE TO THE PETITION DESPITE THE FACT THAT PETITIONERS RAISED SUBSTANTIAL AND NOVEL ISSUES WHICH, IF NOT RESOLVED, WOULD NOT CONFORM TO THE DEMANDS OF SUBSTANTIAL JUSTICE. 3. THE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT REFUSED TO RESTRAIN THE NLRC WHICH RESOLVED THE ILLEGAL DISMISSAL CASE WITHOUT RULING FIRST ON PETITIONERS MOTION FOR INHIBITION.15 The Ruling of the Court We find the petition partly meritorious. Petitioners filed the petition for certiorari with the Court of Appeals within the 60-day period provided in Section 4 of Rule 65, as amended by Circular No. 56-2000.16 However, to avoid further delay, the Court will resolve the petition on the merits instead of remanding the case to the Court of Appeals. Retroactive Application of Circular No. 56-2000 The Court of Appeals applied the amendment under Circular No. 39-98 in computing the period for filing a petition for certiorari. However, this Court further amended the reglementary period for filing a petition for certiorari in En Banc Resolution dated 1 August 2000 in A.M. No. 00-2-03-SC. The resolution, which is contained in Circular No. 56-2000, took effect on 1 September 2000. The latest amendment of Section 4 of Rule 65 of the 1997 Rules of Civil Procedure reads: Sec. 4. When and where petition filed. The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of the said motion. The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in the aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed in and cognizable only by the Court of Appeals. No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding fifteen (15) days. (Emphasis supplied) In a number of cases,17 this Court applied retroactively Circular No. 56-2000. This Circular reckoned the 60-day period to file a petition for certiorari from the date of receipt of the notice of the denial of the motion for reconsideration or new trial, if one was filed. In these cases, this Court ruled that a petition for certiorari which had been filed past the 60-day period under Section 4 of Rule 65, as amended by Circular No. 39-98, was deemed seasonably filed provided it was filed within the 60-day period counted from the date of receipt of the notice of the denial of the motion for reconsideration. In Narzoles v. NLRC,18 this Court explained: The Court has observed that Circular No. 39-98 has generated tremendous confusion resulting in the dismissal of numerous cases for late filing. This may have been because, historically, i.e., even before the 1997 revision to the Rules of Civil Procedure, a party had a fresh period from receipt of the order denying the motion for reconsideration to file a petition for certiorari. Were it not for the amendments brought about by Circular No. 39-98, the cases so dismissed would have been resolved on the merits. Hence, the Court deemed it wise to revert to the old rule allowing a party a fresh 60-day period from notice of the denial of the motion for reconsideration to file a petition for certiorari. x x x the Court resolved, in A.M. No. 00-2-03-SC, to further amend Section 4, Rule 65 x x x In view of its purpose, the Resolution further amending Section 4, Rule 65 can only

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be described as curative in nature, and the principles governing curative statutes are applicable. Curative statutes are enacted to cure defects in a prior law or to validate legal proceedings which would otherwise be void for want of conformity with certain legal requirements. They are intended to supply defects, abridge superfluities and curb certain evils. They are intended to enable persons to carry into effect that which they have designed or intended, but has failed of expected legal consequence by reason of some statutory disability or irregularity in their own action. They make valid that which, before the enactment of the statute was invalid. Their purpose is to give validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with. Curative statutes, therefore, by their very essence, are retroactive. In the present case, the petition filed in the Court of Appeals was indeed filed beyond the 60-day period if computed from the time the notice of judgment was received and interrupted only by the filing of the motion for reconsideration. However, if the 60-day period is reckoned from the receipt of the notice denying the motion for reconsideration, as provided under Circular No. 56-2000, then the petition for certiorari was filed on time. Petitioners received on 25 January 1999 the notice denying their motion for reconsideration of the NLRC Resolution. Under Section 4 of Rule 65, as amended by Circular No. 56-2000, petitioners had 60 days or until 26 March 1999 to file the petition for certiorari with the Court of Appeals. Since petitioners filed their petition for certiorari on 26 March 1999, we hold that they filed their petition seasonably. Loss of Trust and Confidence We agree with the findings of the Labor Arbiter and the NLRC that RAMATEK illegally dismissed Anelia. This Court defers to the factual findings of labor officials, who possess the expertise in matters within their jurisdiction, provided substantial evidence support such factual findings.19 Thus, absent any proof that the factual findings of the Labor Arbiter and the NLRC are capricious or arbitrary, such findings have conclusive effect on this Court and deserve finality.20 As found by the Labor Arbiter, Anelia was able to prove that the charges against her were false and baseless. According to the Labor Arbiter: Despite the gravity of the charges, there is nothing competent in the records to substantiate the same. Even as respondent corporation has the burden to prove just cause, otherwise we are to rule in favor of the employees right to security of tenure, respondents failed to undertake the burden. On the other hand, complainant explained to the satisfaction of this Office that the charges against her are utterly false and baseless. Her "Complaint/Affidavit" dated January 7, 1997, in relevant part, reads: "5. Numbers 1 and 3 of the accusations against me, as I have already said, were false. What I have awarded to Ms. Mocorro was the fabrication of ten (10) pieces of steel tables at a cost of P2,050.00 per piece, said tables. Enclosed as Annex "I" is a copy of the Affidavit of Mr. Cesar Mocorro stating the pertinent facts thereof which is contrary to the accusations against me by said respondent Lawrence Esparaz. I have no knowledge of the said fourteen (14) pieces of steel tables. And, I did not know of any bid of certain Ronnie Yucaran as claimed by respondent Lawrence Esparaz. If there was such fourteen (14) pcs. of steel tables, the same were ordered by them. Relative to the Cordova Condominium repair, the bid of Mr. Wally Bondoc was P485,000.00. The bid sheet of Mr. Bondoc, I gave to Ariel Figueroa. I do not know where respondents Lawrence Esparaz and Ariel Figueroa got the bid of P90,000.00 for the repair of the Cordova Condominium; 5.1 Number 2 of the accusation against me was likewise false. There was no existing offer from said FCR Business Machines Corporation at the time or before the said typewriters were bought from Mitec International Corporation. The purchase thereof was likewise with the approval of respondent Lawrence Esparaz. Enclosed as Annex "J" is the affidavit of Mr. Ignacio Tiu of Mitec Intl. Corp. pertaining to the acquisition of the said typewriters; 5.2. As regard number[s] 4 and 5, I have no cash advances of P500,000.00 as per SBTC Check No. 285965 dated January 12, 1996. The said amount which I withdrew from the drawee bank were all used in the purchase of the furnitures and fixtures for the BF House. When we purchased those things, Mr. Morris Weinberg and respondent Rosalie [Balutan were] with me at the store. They are the ones who choosed [sic] the items. Enclosed as Annex "K" is the affidavit of Cecille Arcal, daughter of the proprietress of Amies store and proprietress of the Ohbets Gen. Merchandise, located at Stall B, Cash and Carry, Cosmopolitan Center, Filmore Street, Makati, Metro Manila. All the corresponding receipts thereof were at the files of Ramatek. I have nothing in my possession documents belonging to Ramatek. All of which are in their possession, including some of my personal things which they ransacked after I was suspended in August 1996 and was not allowed to enter the company premises. Even my phone calls are now barred as per order/instructions of respondent Lawrence Esparaz; 5.3. Anent the Mitsubishi GLXI, the same was acquired by my husband, Nestor V. de los Reyes, who until now is still paying the monthly amortization thereof." Against complainants aforesaid allegations exculpating her from the charges, substantiated no less by corroborating testimonies and documents, respondent did not submit any countervailing evidence such that this Office is constrained to adjudge complainants dismissal as being without just cause. Respondents having failed to substantiate their charges against complainant with competent and credible evidence, this Office perceives that the primordial inspiration

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for her dismissal was the filing by her husband of a civil suit against three (3) company officials, a matter which respondents cannot legally use against complainant to deprive her of her tenurial rights. This is because the suit was not filed by the complainant against the company or its officials but by her husband. There is no showing that the filing of the suit was a joint decision by the couple or was instigated by complainant as to charge complainant with disloyalty or a conflict of interests. Moreover, it appears that complainants husband was merely asserting and exercising his right to seek redress in the courts, a matter which respondents should not begrudge complainant about. Finally, the case was amicably settled by the parties such that there can be no rational justification for respondents to dismiss complainant just because a plaintiff in the civil suit happened to be her husband.21 Indeed, RAMATEK started hurling charges against Anelia after her husband, Nestor, filed a case against RAMATEK officials. In fact, Anelia was forced to file an indefinite leave of absence because of the pending case, upon the request of Weinberg, the chairman of RAMATEKs Board of Directors. Also, one month before RAMATEK asked Anelia to explain her alleged anomalous transactions, Weinberg already requested Anelia to tender her resignation because of the civil case filed by Anelias husband and Sicar Corporation against RAMATEK officials. In this case, petitioners, which have the burden of establishing the facts as bases for their loss of confidence in Anelia, failed to prove their allegations against Anelia. Petitioners evidence are insubstantial and inadequate to support a conclusion that Anelia engaged in anomalous transactions. RAMATEK relied mainly on the audit findings of its external auditor, Jerry Victor Masiclat ("Masiclat"), to bolster its claim that Anelia misappropriated RAMATEKs funds. Thus, in a separate criminal complaint, Esparaz attached Masiclats audit reports22 in the Affidavit-Complaint23 to prove estafa against Anelia. However, in a Joint Resolution dated 14 June 1999,24 the Assistant Provincial Prosecutor of Calamba, Laguna, recommended that the criminal case of estafa filed by RAMATEK through Esparaz against Anelia be dismissed for lack of probable cause. In the same resolution, the Assistant Provincial Prosecutor recommended the filing of Informations for Perjury against Esparaz and Masiclat for making untruthful statements in their respective affidavits. Likewise, in a Resolution dated 10 September 1998, the Office of the City Prosecutor of Manila dismissed another case of estafa25 that RAMATEK filed against Anelia. Loss of confidence as a ground for dismissal does not require proof beyond reasonable doubt. The law requires only that there be at least some basis to justify it. Thus, there must be some evidence to substantiate the claim and form a legal basis for loss of confidence.26 The employer cannot exercise arbitrarily and without just cause the right to dismiss an employee for loss of trust and confidence.27 Motion for Inhibition Petitioners allege that the NLRC should have ruled first on their motion for inhibition before resolving the illegal dismissal case. Such failure of the NLRC to rule on the motion for inhibition does not affect the validity of the Resolution of the NLRC in the illegal dismissal case. The records show that petitioners have the penchant of filing motions for inhibition. Aside from filing a motion for inhibition against the Third Division of the NLRC, petitioners previously filed a motion for inhibition against Labor Arbiter Arthur Almansec.28 Petitioners moved for the inhibition of the Third Division of the NLRC because Anelias husband allegedly visited frequently the office of Commissioner Ireneo Bernardo, a member of the Third Division. According to petitioners, there was no need to establish or prove that these visits by Anelias husband damaged petitioners cause because these visits somehow tainted the partiality of the decision-making body.29 Petitioners cannot just move to inhibit a division of the NLRC based on mere suspicion. There should be evidence to prove their charge of partiality.30 This Court cannot tolerate acts of litigants who on obviously frivolous grounds seek to disqualify a judge or in this case, a labor arbiter and a division of the NLRC, under a plea of supposed bias, hostility, prejudice or prejudgment.31 WHEREFORE, we SET ASIDE the Resolutions dated 31 March 1999 and 6 July 1999 of the Court of Appeals. We AFFIRM the Resolution of the National Labor Relations Commission dated 31 August 1998.

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the account of petitioner at the Rural Bank of Central Pangasinan. Sometime in January 1999, petitioner, through its Finance Department, noticed that several checks payable to petitioner from the collections in the Area V office were returned due to insufficiency of funds. On January 19, 1999, Josefina Mandapat, Sandra Frias and Marites Radac, petitioners Finance Manager, Chief Accountant and Legal Assistant, respectively, confronted respondents with their discovery. Respondent de Vera admitted that the checks were issued by her sister and that she encashed them from the money collected from petitioners customers. On January 21, 1999, Mrs. Josefina Mandapat submitted a memorandum to petitioners General Manager, Salvador M. de Guzman, detailing their findings about the bounced checks. On February 2, 1999, she submitted an addendum to her memorandum. G.R. No. 145800 January 22, 2003 On February 4, 1999, petitioner, through de Guzman, issued a memorandum to respondents placing them under preventive suspension and requiring them to explain in writing within forty-eight (48) hours why they misappropriated cooperative funds. In the same communication, a hearing was set on February 13, 1999 at 9:30 a.m. at the Board Room of petitioner before Atty. Teodoro Fernandez. In their respective Answers/Explanations, respondents denied having misappropriated the funds of petitioner cooperative. They alleged that: (1) the checks that bounced were redeposited with the Rural Bank of Central Pangasinan; (2) the amount representing the face value of the checks had been used by petitioner as of December 15, 1998; (3) there was never any shortage in the cooperative money or funds in their possession; and (4) they never violated any policy of the cooperative and on the contrary, they have been very religious in remitting the funds and money of petitioner.1 At the scheduled hearing on February 13, 1999, respondents, with assistance of counsel, appeared before Atty. Teodoro Fernandez. Respondent de Vera testified and admitted that she encashed the checks of Evelyn Joy Estrada because the latter is her older sister and that she has a soft spot for her; that Mrs. Estrada owns a sash factory and that she merely wanted to help her sister meet her business obligations; that sometime in November 1998, Mrs. Marites Radoc, Chief Accountant of petitioner, called her attention to one check which bounced thrice; that this check was eventually replaced by her sister with cash; that despite the bouncing of some other checks, all checks were eventually funded and paid to petitioner, hence, petitioner incurred no losses in its collections; that she has worked for petitioner for nineteen (19) years and this is the first time she has been charged administratively by petitioner. Respondent Macaraeg admitted that she knew of the accommodations given by

CENTRAL PANGASINAN ELECTRIC COOPERATIVE, INC., petitioner, vs. GERONIMA MACARAEG and MARIBETH DE VERA, respondents. In this petition for review on certiorari, petitioner Central Pangasinan Electric Cooperative, Inc. challenges the decision of the Court of Appeals in CA-G.R. SP No. 55128 affirming the decision of the voluntary arbitrator in NCMB-RBI-PM-VA-503-99 ordering the reinstatement of respondents to petitioners employ and payment of their backwages. Petitioner is an electric cooperative duly organized and existing under Philippine laws. Respondent Geronima Macaraeg and Maribeth de Vera are employees of petitioner at its office in Area V, Bayambang, Pangasinan. Respondent de Vera was employed as teller whose primary duty was to accept payments from petitioners consumers in Bayambang and remit her collections to the cashier, herein corespondent Geronima Macaraeg. Respondent Macaraegs duty was to deposit the daily collections of the office to petitioners account at the Rural Bank of Central Pangasinan in Bayambang. From January 1998 to January 1999, respondent de Vera accommodated and encashed the crossed checks of her sister, Evelyn Joy Estrada. Evelyn issued two hundred eleven (211) crossed checks amounting to P6,945,128.95 payable to petitioner cooperative despite the absence of any transaction or any outstanding obligation with petitioner. In turn, respondent de Vera, with the knowledge and consent of respondent Macaraeg, paid the full value of these checks from the cash collections of petitioner. At the end of the day, respondents credited the checks as part of their collection and deposited the same together with their cash collection to

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respondent de Vera to her sister; that she allowed her subordinate to do it because respondent de Vera is her kumare, and that she knew that Mrs. Estradas checks were sufficiently funded. She worked for petitioner for twenty-two (22) years and has never had an administrative charge. Mrs. Josefina Mandapat, Finance Manager of petitioner, testified as petitioners witness. She stated that she prepared a report on the findings of their accountant regarding the encashment of Evelyn Joy Estradas checks, and that the encashment of said checks is prohibited under an office memorandum. On March 10, 1999, Atty. Fernandez submitted his findings to the General Manager of petitioner. On March 19, 1999, on the basis of said findings and recommendation, the General Manager issued to respondents separate notices of termination, effective April 9, 1999, for "serious misconduct, and breach of trust and confidence reposed on them by management."2 Respondents, with the help of the President and representative of the Union, Central Pangasinan Electric Cooperative (CENPELCO) Employees Association-Tupas Local Chapter No. R01-0012, questioned their dismissal before the National Conciliation and Mediation Board (NCMB). They claimed that their dismissal was without just cause and in violation of the Collective Bargaining Agreement (CBA), which requires that the case should first be brought before a grievance committee. Eventually, the parties agreed to submit the case to a voluntary arbitrator for arbitration. On August 12, 1999, the voluntary arbitrator rendered a decision in favor of respondents, viz.: "WHEREFORE, in view of the foregoing, the undersigned arbitrator finds and so holds: (1) That the parties failed to comply with the provisions of the GRIEVANCE PROCEDURE of the Collective Bargaining Agreement; (2) Reinstate immediately upon receipt of the Decision complainants GERONIMA MACARAEG and MARIBETH DE VERA to their former positions without loss of seniority rights; (3) Pay complainants their backwages to be reckoned from the time their employment has been [sic] illegally terminated up to their actual reinstatement based on their last salary. Parties are hereby enjoined to be faithful with their commitment to abide by this Decision which under their Collective Bargaining Agreement is final, executory and not subject to appeal. SO ORDERED."3 Petitioner appealed to the Court of Appeals via a petition for review. On August 17, 2000, the Court of Appeals rendered a decision dismissing the petition and affirming the decision of the voluntary arbitrator. Hence, the present course of action. Petitioner claims that: "(1) The Honorable Court of Appeals gravely abused its discretion in finding that the procedure leading to the termination of respondents Maribeth de Vera and Geronima Macaraeg was in violation of the provisions of the Collective Bargaining Agreement (CBA) particularly Steps 1-4, Article XIII of the said Agreement. (2) The Honorable Court of Appeals gravely abused its discretion in holding that petitioner illegally terminated the services of herein private respondents."4 The petition is impressed with merit. At the outset, we hold that the first issue raised in the petition pertaining to the alleged violation of the CBA grievance procedure is moot and academic. The parties active participation in the voluntary arbitration proceedings, and their failure to insist that the case be remanded to the grievance machinery, shows a clear intention on their part to have the issue of respondents illegal dismissal directly resolved by the voluntary arbitrator. We therefore find it unnecessary to rule on the matter in light of their preference to bring the illegal dismissal dispute to voluntary arbitration without passing through the grievance machinery. This leads us to the next issue of whether respondents were validly dismissed. To constitute a valid dismissal from employment, two requisites must be met, namely: (1) it must be for a just or authorized cause, and (2) the employee must be afforded due process.5 We hold that there exist a valid reason to dismiss both employees. Article 282(c) of the Labor Code allows an employer to dismiss employees for willful breach of trust or loss of confidence.6 Proof beyond reasonable doubt of their misconduct is not required, it being sufficient that there is some basis for the same or that the employer has reasonable ground to believe that they are responsible for the misconduct and their participation therein rendered them unworthy of the trust and confidence demanded of their position.7 To be sure, the acts of the respondents were clearly inimical to the financial interest of the petitioner. During the investigation, they admitted accommodating Evelyn Joy Estrada by encashing her checks from its funds. They did so without petitioners knowledge, much less its permission. These inimical acts lasted for more than a year, and probably would have continued had it not been discovered in time. All along, they were aware that these acts were prohibited by the Coop Checks Policy.8 Clearly,

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there was willful breach of trust on the respondents part, as they took advantage of their highly sensitive positions to violate their duties. Moreover, the acts of the respondents caused damage to the petitioner. During those times the checks were illegally encashed, petitioner was not able to fully utilize the collections, primarily in servicing its debts. In her memorandum9 dated January 21, 1999, Finance Manager Josefina Mandapat reported how petitioner is prejudiced, thus: "Though the checks were funded, it constitutes a violation of Coop Policy. Checks that are covered even by local clearing only take three days to be converted to cash and when returned another three (3) days to retry clearing. The cooperative is deprived of the privilege to maximize use of its collections primarily in servicing its debts considering the state of calamity and even at the moment wherein we worry every time if we can payoff (sic) our NAPOCOR power bill."10 It is not material that they did not "misappropriate any amount of money, nor incur any shortage relative to the funds in their possession."11 The basic premise for dismissal on the ground of loss of confidence is that the employees concerned hold positions of trust. The betrayal of this trust is the essence of the offence for which an employee is penalized.12 In the case at bar, the respondents held positions of utmost trust and confidence. As teller13 and cashier,14 respectively, they are expected to possess a high degree of fidelity. They are entrusted with a considerable amount of cash. Respondent de Vera accepted payments from petitioners consumers while respondent Macaraeg received remittances for deposit at petitioners bank. They did not live up to their duties and obligations. Nor is there any doubt that petitioner observed procedural due process in dismissing the respondents. In separate memoranda dated February 4, 1999 and signed by the General Manager ( de Guzman), the respondents were both appraised of the particular acts or omissions constituting the charges against them. They gave their own "answer/explanation" to the charges. They participated in the investigation conducted at petitioners board room on February 13, 1999 at 11:30 a.m. They were represented by counsel during the investigation. Finally, notices were sent to them on March 19, 1999, informing them of the basis of their termination. In fine, private respondents were given due process before they were dismissed. Time and again, we have stressed that due process is simply an opportunity to be heard.15 We are aware that the respondents Macaraeg and de Vera have been employed with the petitioner for 22 and 19 years of continuous service, respectively, and this is the first time that either of them has been administratively charged. Nonetheless, it is our considered view that their dismissal is justified considering the breach of trust they have committed. Well to emphasize, the longer an employee stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company. 16 Considering that they have mishandled the funds of the cooperative and the danger they have posed to its members, their reinstatement is neither sound in reason nor just in principle. It is irreconcilable with trust and confidence that has been irretrievably lost.17 IN VIEW WHEREOF, the petition is GRANTED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 55128 (affirming the decision of the voluntary arbitrator in NCMB-RBI-PM-VA-5-03-99) are reversed and set aside. On January 4, 1989, petitioner, thru its Personnel Manager, Mrs. Lolita Agus, required private respondent to explain in writing why she should not be meted disciplinary sanctions for her erroneous assortment and packaging of 2,680 dozens of infant wear. On the same day, she submitted her written explanation, admitting her error and pleading that "Kaya inihihingi ko po nang paumanhin ang aking pagkakamali." 4 Similarly on January 24, 1989, Marietta Elizon, private respondent's supervisor and Ester Rellesiva, the packer, received a memo requiring them to explain why they should not be penalized, Marietta Elizon submitted her explanation on February 2, 1989 5 and Ester Rellesiva on January 25, 1989. 6 Petitioner found private respondent guilty of negligence and she was dismissed from employment effective January 11, 1989, Marietta Elizon, on the other hand, was suspended from employment for one (1) month effective February 12, 1989 on the ground of negligence through command responsibility. Ester Rellesiva was found innocent on the ground that when she undertook the packing of the infant wear, the same were already sealed in black plastic bags and could no longer be checked. The National Federation of Labor Union (NAFLU), in behalf of Virginia Antiola, filed a complaint for unfair labor practice and illegal dismissal against Judy Philippines, Inc. and Lolita Z. Agus. NAFLU alleged that the dismissal of Virginia Antiola was unjustified because the infant wear erroneously assorted by Antiola should not have been shipped to the buyer had the company's supervisor and the buyer's quality comptroller exercised due diligence in the performance of their duties in ensuring that the goods were properly assorted. NAFLU assert that the act of petitioner in dismissing private respondent Antiola is a manipulative scheme designed to support its deliberate attempt to get rid of her from the service. Petitioner countered that instead of following the written instruction of her supervisor, private respondent deviated therefrom which resulted in erroneous packaging of the infant wear. Thus, petitioner, avers that the dismissal of private respondent Antiola was valid and lawful, premised on the ground of negligence. The Labor Arbiter's decision rendered on April 26, 1990 found the dismissal justified, viz:

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prerogative to exercise its inherent power to discipline its workers. Upon careful study and perusal of the entire records of the instant case this office is inclined to uphold the act of the petitioner on dismissing individual complainant, as lawful, premise on the ground of fault and negligence causing an irreparable damage to the goodwill of the petitioners' business, especially considering that the latter is an export oriented entity. For more than one and one half months (1 1/2) from November 15, 1988 up to January 4, 1989 while she, individual complainant, was in the process of sorting the finished products she failed to notice the errors she had been committing. She had neglected her duty to check for herself her accomplishment whether or not it tallys with the written instruction of her supervisor in her possession. She admitted in her own written admission that she failed to check her errors and that she really committed the erroneous assortment since the very beginning. The claim of complainants that the act of petitioner in dismissing individual claimant is discriminatory, tainted with unfair labor practice, on the ground that supervisor, Marietta Elizon, was made to suffer only one month suspension while individual claimant was punished too severely by dismissal, is untenable. The degree responsibility between individual claimant and supervisor can not be the same. The wrongful act was committed by complainant while her supervisor was merely remiss of her duty to supervise complainant. In the case of Edwin Estabillo, the buyer's quality controller, he is checking the quality of the infants wear and not specification. In addition, he is not an employee of the herein petitioner under which the latter may impose appropriate discipline. Concerning complainants claim that Virginia Antiola was not accorded due process before she was dismissed, records show that complainant Antiola was required to explain in writing within (20) hours why she should not be meted any disciplinary action for her negligence, that of having assorted the goods erroneously and contrary to the instruction given her. Complainant Antiola in compliance with the memorandum, submitted her written admission of guilt, which in turn became the basis of the petitioner in terminating her service. On the basis of the foregoing circumstance, this Labor Arbiter is of the view that due process mandated under B.P. 130 is substantially satisfied. There is no need for a hearing because herein individual claimant has pleaded guilty. While it is true that individual complainant has committed the infraction for the first time, as the records will show, and that she has voluntarily admitted guilt, it could not likewise be denied that respondent company suffered substantial losses brought about by individual complainant's wrongful act. She should have checked her accomplishment against the written instruction of her supervisor, before turning over the same to the packer for the packing. Let it be recalled that before turning over the assorted goods to the packer, it is already packed in black plastic bags presumably by individual complainant herself. Regrettably, the latter failed to exercise due diligence in the performance of her assigned tasks. Much as we are bound to uphold the right of workers to security of tenure, we cannot, as in this case, deny capital its WHEREFORE, premises considered, let the instant case be, as it is hereby DISMISSED for lack of merit. SO ORDERED. 7 Private respondent appealed to the National Labor Relations Commission. In reversing the decision of the labor arbiter, the NLRC said that: The most, arguendo, that may be said against complainant here is that in failing "to exercise due diligence in the performance of her assigned task(s),' she committed "Gross . . . neglect" in the performance of her duty. But pertinently, Article 282(b) of the Labor Code requires that to qualify as a valid cause for dismissal such neglect must not only be gross, it should be "Gross and habitual neglect" in character. Noting that the Labor Arbiter, himself admits that "individual complainant has committed the infraction for the first time, as the records will show" (Decision, p. 6 Record, p. 54), we thus rule that the penalty of dismissal is quite severe here. Against the backdrop that the complainant was dismissed on January 12, 1989 and has been deprived by petitioner company of wages for about three years and four months, we opine that an award of reinstatement plus one year backwages will suffice. WHEREFORE, the appealed decision is hereby set aside. The respondents are hereby directed to reinstate complainant with backwages limited to one year. SO ORDERED. 8 Petitioner's motion for reconsideration and/or appeal was denied in an Order dated August 30, 1993. Hence, this petition for review, the petitioner contending that: I THE NLRC SERIOUSLY ERRED, AS A MATTER OF LAW, IN NOT HOLDING THAT UNDER ARTICLE 223 OF THE LABOR CODE THE APPEAL FILED BY PRIVATE RESPONDENT TO THE NATIONAL LABOR RELATIONS COMMISSION FROM THE DECISION OF LABOR ARBITER ARTURO V. CASUCO WAS FILED BEYOND THE REGLEMENTARY PERIOD AND THAT THE SAID DECISION OF LABOR ARBITER CASUCO HAD ALREADY BECOME FINAL AND EXECUTORY. II

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ASSUMING FOR THE SAKE OF ARGUMENT THAT THE DECISION OF LABOR ARBITER ARTURO CASUCO HAD NOT YET BECOME FINAL AND EXECUTORY AND THAT PRIVATE RESPONDENT'S APPEAL COULD BE ENTERTAINED, THE NATIONAL LABOR RELATIONS COMMISSION SERIOUSLY ERRED AS A MATTER OF LAW IN HOLDING THAT THE OFFENSE COMMITTED BY PRIVATE RESPONDENT DID NOT CONSTITUTE A JUST CAUSE FOR DISMISSAL UNDER ARTICLE 282 OF THE LABOR CODE. On the question of whether or not the appeal before the National Labor Relations Commission had been seasonably made, we rule in favor of private respondent. Petitioner contends that private respondent received a copy of the Decision of Labor Arbiter Arturo Casuco on May 2, 1990. She had therefore, ten calendar days therefrom, or until May 12, 1990, to file her appeal to the NLRC. However, she filed her appeal only on May 14, 1990, or two days beyond the reglementary period. 9 Petitioner points out that the appeal was filed out of time and should be dismissed. It is admitted that private respondent Antiola received the labor arbiter's decision on May 2, 1990. Under Article 223 of the Labor Code, as amended, the period to appeal to the Commission is ten (10) calendar days, to wit: Art. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards or orders. xxx xxx xxx Since the 10-day period provided in Article 223 of the Labor Code refers to ten calendar days and not to ten working days, this means that Saturdays, Sundays and Legal Holidays are not to be excluded, but included, in the computation of the 10day period. This is in line with the objective of the law for speedy disposition of labor cases with the end in view of protecting the interest of the working man. 10 In subsequent cases, We ruled that if the tenth day to perfect an appeal from the decision of the Labor Arbiter to the NLRC falls on a Saturday, the appeal shall be made on the next working day, 11 as embodied in Section 1, Rule VI of the NLRC Rules of Procedure promulgated on January 14, 1992. This conclusion arrived at by the Court recognizes the fact that on Saturdays the offices of NLRC and certain post offices are closed. Private respondent filed her appeal on the twelfth calendar day following receipt of the copy of the labor arbiter's decision, since the tenth day, May 12, 1990, is a Saturday. 12 Following the above enunciated doctrine, the filing of the appeal on May 14, 1990, the next working day, is considered to be within the reglementary period provided for by law, hence, seasonably made. Even assuming arguendo that the appeal was filed beyond the period allowed by law, We have at times overlooked this particular procedural lapse. In the case of Firestone Tire and Rubber Co. v. Larosa 13 and reiterated in Chong Guan Trading vs. NLRC 14 this Court allowed the filing of appeals from the decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice. Thus, technical rules of procedure in labor cases are not to be strictly applied if the result would be detrimental to the working man. 15 Technicality should not be permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties. 16 Moreover, under Article 218 (c) of the Labor Code, the Commission is empowered to "correct, amend, or waive any error, defect or irregularity whether in substance or form," in the exercise of its appellate jurisdiction. Therefore, We find no grave abuse of discretion on the part of the NLRC in entertaining the appeal of private respondents, even if, as alleged by petitioner, it was filed two days late. The Constitution guarantees the right of workers to "security of tenure." 17 In upholding the same, Article 277 (b) in relation to Section 1 of Rule XIV (Book Five) of the Labor Code, requires the existence of a valid to justify the termination of an employee. Without a valid cause, dismissal of employees may not properly be done. While it is true that the decision to dismiss or lay off an employee is management's prerogative, it must be made without abuse of discretion, for what is at stake is not only the employee's position but also his means of livelihood. 18 Therefore, he should be protected against any arbitrary deprivation of his job. 19 At any rate, where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's concern for the workingmen. There is, in addition, his family to consider. Unemployment brings about hardships and sorrows on those dependent on the wageearner. The misery and pain attendant to the loss of jobs then could be avoided if there be acceptance of the view that under all circumstances of a case the workers should not be deprived of their means of livelihood. 20 Petitioner anchors its right to terminate the employment of Virginia Antiola on the ground of "gross neglect of duties," under Article 282 (b) of the Labor Code. Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. 21 We affirm the finding of the NLRC that "Article 282 (b) of the Labor Code requires that . . . such neglect must not only be gross, it should be 'Gross and habitual neglect' in character." As aptly pronounced by the NLRC, "the penalty of dismissal is quite severe here" noting that the labor arbiter himself admits that she committed the infraction for the first time. Considering that private respondent worked with the company for four years with no

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known previous bad record, the ends of social and compassionate justice would be better served if she was merely suspended from work rather than terminated. We are not, however, unmindful of the negligence committed by respondent Antiola. The employer's obligation to give his workers just compensation and treatment carries with it the corollary right to expect from the workers adequate work, diligence and good conduct. Nonetheless, private respondent's wrongdoing does not warrant dismissal inasmuch as dismissal is the ultimate penalty that can be meted to an employee. 22 In view of the foregoing, We rule that Judy Philippines, Inc. had no valid cause to dispense with the services of private respondent. We shall now deal with the consequences that should visit the petitioner for illegally dismissing private respondent Virginia Antiola. Under the law, 23 an employee is entitled to reinstatement and to his full backwages when he is unjustly dismissed. Note, however, that reinstatement and backwages are separate and distinct reliefs given to an illegally dismissed employee. 24 Reinstatement means restoration to a state or condition from which one had been removed or separated. 25 One who is reinstated assumes the position he had occupied prior to the dismissal and is, as an ordinary rule, entitled only to the last salary in that position. 26 Backwages, on the other hand, is a form of relief that restores the income that was lost by reason of unlawful dismissal. 27 Public respondent NLRC deemed it proper to order the reinstatement of private respondent Virginia Antiola. We find no cogent reason to set aside public respondent's findings on this matter. Be that as it may, we cannot sustain the ruling of public respondent in awarding backwages limited to one year. Republic Act No. 6715, which took effect on March 21, 1989, amended Article 279 of the Labor Code, provides that an illegally dismissed employee is entitled to 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. 28 We have ruled, however, that this amendment has no retroactive effect. In such case, theaward of backwages to an employee whose illegal dismissal occurred before March 21, 1989, is limited to a period of three (3) years without deduction or qualification. 29 Following the above enunciated doctrine, the dismissal of Virginia Antiola having been effected on January 11, 1989, entitles her to backwages for a period of three (3) years, without deduction or qualification. WHEREFORE, the decision of public respondent National Labor Relations Commission dated June 30, 1993 is hereby AFFIRMED subject, however, to modification that petitioner Judy Philippines, Inc. be ordered to pay private respondent Virginia Antiola backwages for a period of three (3) years, without qualification or deduction. SO ORDERED.