G.R. No. 143171             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.

D E C I S I O N

CORONA, J.:

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 PLDT’s 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;

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. Albay’s 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

Donato’s 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 respondent’s 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 attorney’s fees in the amount which is equivalent to 10% of the total amount due the complainant.5

On appeal, the NLRC reversed the labor arbiter’s decision on the ground that respondent was a managerial employee and that loss of trust and confidence was enough reason to dismiss him.

Respondent’s 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 respondent’s 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. PLDT’s basis for respondent’s dismissal was not enough to defeat respondent’s 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 company’s 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 employee’s 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 employee’s 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 petitioner’s dismissal was not founded onclearly established facts sufficient to warrant separation from employment. The factual findings of the court a quoon 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 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 Rivera’s sworn statement and Donato’s affidavit — does not, in our view, establish respondent Tolentino’s complicity in the "internal arrangement" engineered by his subordinate de Rivera. We quote the labor arbiter’s incisive observation:

Undoubtedly, when respondents received the raw information regarding complainant’s 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 employee’s 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 respondent’s 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 respondent’s 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 employee’s circumstances, in the application of such punishment.

Certainly, a great injustice will result if this Court upholds Tolentino’s 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 arbiter’s decision. Thus, no competent evidence exists in the records to support PLDT’s 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 PLDT’s 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.

To protect labor’s 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 management’s 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 law’s 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 attorney’s 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 arbiter’s decision is AFFIRMED with MODIFICATION. The award of attorney’s 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.

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.

D E C I S I O N

CALLEJO, SR., J.:

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

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 Saro’s Trucking Services and Enterprises (Saro’s). On January 15, 1999, respondent De Guzman as Facilities Section Manager, for and in behalf of FCPP, signed a Garbage Collection Agreement5 with Saro’s, and the latter’s 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 Manaig’s 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 Saro’s Trucking Services, FCPP’s 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 Saro’s, 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 Saro’s is paying FCPP P2.50 per kilo of metal, you will buy it from Saro’s 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 Saro’s, per your instruction, to Sta. Rosa Baptist Church. After this, on July 12, 1999, the remaining scrap metals were again picked up by Saro’s. This time, the assorted metals were covered by Scrap/Garbage Pass NO. 3419. From these assorted [metals] 1,230 kgs. were purposely excluded from the gross weight to be reported and paid to FCPP. Again, these excluded metals were delivered to the same Baptist Church, per your instruction. According to Mr. Manaig, despite several demands from you, you have not yet remitted to him the payment for those assorted scrap metals which you caused to be delivered to Sta. Rosa Baptist Church.

In addition to the foregoing, it was likewise reported by Mr. Manaig that there were previous occasions in the past where you solicited from him empty drums, pails, and corrugated cartons, which were all part of those picked up from FCPP. Attached hereto are the statements given by the concerned employees of Saro’s.

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 Balayan13voluntarily executed handwritten statements on the matter.

According to their respective accounts of what transpired on July 10, 1999, a 10-wheeler truck arrived at the company warehouse at around 1:00 p.m. Assorted scrap materials were then hauled into the truck, including steel purlins. Knowing that they could still be used as braces for hepa-filter box hangers, SNK Mechanical Supervisor Balayan asked his superior, Nobuaki Machidori, if the hauling could be stopped, to which the latter consented. Balayan approached the driver of the truck and told him not to include the steel purlins; the warehouse helpers then began separating the steel purlins from the other scrap materials to be hauled.

Astillero had also requested the men to stop the hauling. SNK Engineer Victoriano had apparently told him that the steel purlins would still be used for construction. At around 2:00 p.m., respondent De Guzman called Victoriano and asked whether the scrap materials at the Fuji Electric Warehouse could already be collected by the scrap dealer. Victoriano assented, but requested that "the existing

c-purlins be dismantled" and that "20 lengths would be used as additional bracket support for heap box/FCU installation."14

Adrian Camcaman, an employee of the Facilities Department under respondent De Guzman, then arrived and informed Astillero that Victoriano had already given permission for the hauling to commence.15 Camcaman also executed a written 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 Saro’s Trucking Services is the regular buyer of FCPP’s scrap materials and they can buy from them. I referred the matter therefore to Mr. Roberto [Pumarez], Supervisor of Saro’s and told him of the intension of the Sta. Rosa Bible Baptist Church (SRBBC) to buy scrap metal. I further told him that since Saro’s is paying FCPP P2.60 of scrap metal, Sta. Rosa Bible Baptist Church can buy it from Saro’s at P3.00 per kilo a price higher than FCPP. The statement of Mr. [Pumarez] which says that "I will buy" it from Saro’s 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 Saro’s agreed. My part of the transaction ended there. Thereafter, as reported by my staff the scrap metals were delivered to the church by the Saro’s 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 Saro’s 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 Saro’s 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 Saro’s, 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. Saro’s had apparently been previously free to haul all the scrap materials without field supervision from petitioner FCPP.

On July 28, 1999, respondent Alvarez sent an e-mail message to his co-employees, expressing sympathy for the plight of respondent De Guzman. Respondent Alvarez used a different computer, but the event viewer system installed in the premises of petitioner FCPP was able to trace the e-mail

message to him. Thus, on even date, petitioner Espinosa issued an Inter-Office Memorandum addressed to respondent Alvarez, worded as follows:

TO : MR. ALLAN ALVAREZ

FROM : HRD and General Affairs Department

SUBJECT : SENDING OF E-MAIL MESSAGE SYMPATHETIC

TO MR. DE GUZMAN

DATE : July 28, 1999

___________________________________________________________

This is in reference to the July 28, 1999 E-mail message sent to all E-mail users from R. "Sato" …this morning.

Upon investigation, records reveal that you used the computer assigned to Shirley Bagnes and sent a message "hi" to yourself. Moreover, the event viewer-system showed that you logged at 7:19:58 (also using the computer of Shirley Bagnes).

Please explain in writing within 48 hours why no disciplinary action should be filed against you, including dismissal, for grossly presenting information which [is] highly confidential while an investigation on Mr. De Guzman is going on. Moreover, your action of obtaining the sympathy of employees through the use of the E-mail goes against your role as a key person holding a highly responsible position in the Facilities Section.

(Sgd.)

ERNESTO G. ESPINOSA

HRD and General Affairs 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:

I’m not [meddling] with the case of our boss but as Facilities member, we are sympathetic to the "case" against him. If the hearsay (sic) is true, that he is [charged] on the ground of manipulating the scrap management, then we totally disagree. It was "said" that he was charged with "qualified theft" due to pull-out of metal scrap for his church.

Our basis is pure hearsay but in all indication, we feel that the case is going against our boss. It was frustrating for us to be kept on dark side, helplessly waiting to defend him. We are afraid that one day, the case is already closed and we even have not said what we have to say. Sorry to have

[caused] the e-mail just to be heard (I regret but the damage has been done and could not do anything about it).

We [believe] that the action of the hauler is premeditated and hastily done to pin down our boss. The transaction between the Hauler and the Church has been transparent to us. Though the action has been immediate due to request of hauler to get the metal scrap, verbal agreement has been made. We had arranged hastily the hauling with the consent of Construction Contractor and know about the request of the Church. As agreed by the Church and [Hauler], the payment will be P3.00/kg plus hauling fee. Hence, the Hauler will profit P0.40/kg (already deducted their normal payment to our company of P2.60/kg). However, for an obvious reason, the hauler had not accepted the payment to make it look that he asked for the favor. And as hearsay, the case filed against him is very strong with [pre-arranged] evidence. We believe that the evidence has no merit at all. In fact, the Hauler had to pay the company on its entirety as we had recorded the full scale of scrap. It is the business and full responsibility of Hauler to sell its [goods] or donate [them] for "free." The church has no liability to our company but only the Hauler who have to settle all its account. The timing of these charges as we believe could be attributed to the improved waste management of our company. Beginning June, the hauler had to pay a bigger amount for scrap (P0.25 million/month) against its previous billing of P15,000/month. As ISO 14001 Promotion Secretariat, we are mandated [to continuously improve] our Environmental Management System. Aside from the direction of our President to "cut cost," it is our small way of helping on this objective.20

Respondent Alvarez was informed that his services were terminated on the ground of serious misconduct effective August 13, 1999 through a Memorandum of even date, worded as follows:

After a careful evaluation of your case, it is our well discerned view, as supported by competent and strong evidences, that you are guilty of serious misconduct.

Ordinarily, while an innocent and responsible expression of concern or opinion over the probable innocence or guilt of a co-employee, who is under administrative investigation, may not be considered as an infraction of company rules and regulations, the same consideration does not obtain in your case.

The following environmental circumstances which surrounded your E-mail message of concern over the preventive suspension upon Mr. Victor de Guzman, your superior, and whose case is still undergoing further impartial investigation, do not speak well of your true motive behind the action you have taken.

Firstly, to hide your identity as the source of the E-mail message, you intentionally used the computer of another employee, Shirley Bagnes. But before you actually sent the E-mail message, you tried to test the communication line between Shirley Bagnes’ computer and your assigned computer by using Ms. Bagnes’ computer in sending your computer the message "hi." Fortunately, however, our viewer-system was able to record you as the author of the E-mail message.

To further compound the situation, you timed-in at 7:46 a.m. (which you would later admit), in anticipation of a possible inquiry from the management as to the source of the message, to show that it was not possible for you to have sent the message just about the same time because you just arrived. It was later confirmed, however, that you were already using your computer as early as 7:21 a.m.

Moreover, we do not share your justification as contained in your July 29, 1999 written explanation, where you also readily admitted your culpability, that the reason why you were compelled to send an E-mail message was simply to show your support to Mr. De Guzman, who according to your premature and unsupported conclusion is innocent of the charges lodged against him. Nobody can say so at this point because the matter is still under investigation. Your explanation is contrary to the fact that, with malice and afterthought, you deliberately sent the E-mail message to almost 150 Filipino and Japanese officers and employees, who are almost entirely and officially not privy to the ongoing investigation.

Obviously, your foregoing actions at that time, as well as the tenor of your E-mail message, were evidently and maliciously premeditated to undermine the result of the ongoing administrative investigation involving Mr. De Guzman, and therefore, constitute serious misconduct. Moreover, your actions do not speak well of a ranking Senior Engineer in the Facilities Section especially in consideration of the fact that you have several employees reporting to you and should in fact, serve as their role model.

In view of the foregoing ineluctable facts, you are hereby terminated from the service, effective immediately. Please proceed to the Finance and Accounting Department to clear yourself from any accountability and to claim whatever unpaid salaries and benefits which are still due you as of this date.

For your information and guidance.21

Respondent De Guzman’s 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 attorney’s 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 Espinosa’s 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 Alvarez’s 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 Arbiter’s 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 Arbiter’s assessment an evaluation of the facts of the case, as well as the evidence adduced by both parties, had been quite thorough. Considering that the decision appealed from was supported by substantial evidence, there was no reason to deviate from the findings of the Labor Arbiter.

The NLRC also affirmed the Labor Arbiter’s finding that respondent De Guzman, a managerial employee who was routinely charged with custody and care of the petitioner’s property, was validly dismissed on the ground of willful breach of trust and confidence. Citing Cañete 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 Alvarez’s 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 Saro’s 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 Saro’s. 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 Guzman’s dismissal was not founded on clearly established facts sufficient to warrant his separation from work, the petitioner’s 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 Arbiter’s judgment is hereby REVERSED and SET ASIDE, and another one entered ordering the reinstatement of petitioners to their respective positions, without loss of seniority rights, and with full backwages.

SO ORDERED.26

The petitioners filed a motion for reconsideration of the said decision, which the appellate court denied in a Resolution dated May 14, 2003.

Aggrieved, the petitioners now come to this Court, ascribing the following errors committed by the CA:

I.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT TOTALLY IGNORED THE WELL ENTRENCHED RULE BEING FOLLOWED IN THIS JURISDICTION THAT FACTUAL FINDINGS OF THE NLRC AFFIRMING THOSE OF THE LABOR ARBITER, WHEN SUFFICIENTLY SUPPORTED BY EVIDENCE ON RECORD, ARE ACCORDED RESPECT AND FINALITY BY THE APPELLATE COURT.

II.

THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT RULED THAT THE DISMISSAL OF PRIVATE RESPONDENTS VICTOR DE GUZMAN AND ALLAN ANTHONY ALVAREZ WERE ILLEGAL, CONTRARY TO THE FINDINGS OF BOTH THE LABOR ARBITER AND NATIONAL LABOR RELATIONS COMMISSION.

III.

THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT COMPLETELY DISREGARDED THE FINDINGS OF BOTH THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION THAT PRIVATE RESPONDENT VICTOR DE

GUZMAN HAD WILLFULLY BREACHED THE TRUST AND CONFIDENCE REPOSED ON HIM BY PETITIONERS WHEN HE PREMATURELY DECLARED THE METAL [PURLINS] AS SCRAP MATERIALS.

IV.

THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT ACCEPTED HOOK [LINE] AND SINKER THE CONTENTION OF RESPONDENT VICTOR DE GUZMAN THAT THE TRANSACTION TO BUY THE STEEL [PURLINS] WAS BETWEEN STA. ROSA BIBLE BAPTIST CHURCH AND SARO’S 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 Saro’s 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 Saro’s. The petitioners stress that as the evidence would show, it was through respondent De Guzman that the delivery of steel purlins to Sta. Rosa was made possible. They reiterate that the respondent wanted to buy the steel purlins, since it was his precise intention to sell them to Sta. Rosa. The petitioners point out that as shown by his application for employment, respondent De Guzman is an active member of the said Church.

The petitioners also point out that respondent De Guzman is not an ordinary rank-and-file employee; he was the Facilities Manager, and concurrently, the Coordinator of the ISO 14000 Secretariat. As such, respondent De Guzman had the sensitive and confidential duty of managing the scrap disposal of petitioner FCPP, and his actuations justified his dismissal based on willful breach of trust.

Anent the case of respondent Alvarez, the petitioners assert that when he sent the e-mail message to more than 150 Filipino and Japanese officers and employees, there was a willful and malicious intent on his part to undermine the on-going investigation of his superior, respondent De Guzman.

The petitioners conclude that the penalty imposed upon the respondents is justified under the circumstances in the instant case.

In their comment, the respondents countered that as correctly held by the appellate court, their dismissal from employment has no valid and just cause. They stress that all the scrap metals were placed in the premises of petitioner FCPP, and it was not respondent De Guzman who had determined whether they could already be considered ready for disposal, but Machidori of SNK. Moreover, it was Saro’s 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 Court’s Ruling

The rule is that factual findings of quasi-judicial agencies such as the NLRC are generally accorded not only respect, but at times, even finality.28 However, when it can be shown that administrative bodies grossly misappreciated evidence of such nature as to compel a contrary conclusion, the Court will not hesitate to reverse its factual findings. Factual findings of administrative agencies are not infallible and will be set aside if they fail the test of arbitrariness.29 Thus, in this case where the findings of the CA differ from those of the Labor Arbiter and the NLRC, the Court, in the exercise of its equity jurisdiction, may look into the records of the case and re-examine the questioned findings. As a corollary, this Court is clothed with ample authority to review matters, even if they are not assigned as errors in their appeal, if it finds that their consideration is necessary to arrive at a just decision of the case.30

It is settled that to constitute a valid dismissal from employment, two requisites must concur: (a) the dismissal must be for any of the causes provided for in Article 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 employer’s 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 confidence-

a. loss of confidence should not be simulated;

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

c. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and

d. it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.37

In the case at bar, the grounds relied upon by petitioner FCPP in terminating the employment of respondent De Guzman are contained in the Inter-Office Memorandum dated August 23, 1999 which effectively terminated the latter’s 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 Saro’s Trucking Services, your intention to buy from Saro’s 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 Saro’s Trucking Services so that you can buy them (metals) later from Saro’s 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 Saro’s were still to be used in the construction of FCPP’s Building B. Thus, on July 10, 1999, while Saro’s employees were initially loading the metals, an Engineer of SNK Philippines, Inc., FCPP’s 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 Saro’s to deliver the metals to Sta. Rosa Baptist Church, where you are an active Church member;

5. That, as of this date, you have not yet settled/paid your obligation to Saro’s. That immediately after you were placed under preventive suspension and to support your explanation that the transaction was between Saro’s and Sta. Rosa Baptist Church, you caused, through some people representing to be members of the Baptist Church and who are unknown to Saro’s, to issue a check in favor of Saro’s. 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 Saro’s and tried to serve a letter addressed to Mr. Larry Manaig, Saro’s Proprietor, allegedly inquiring about the total obligation of the Baptist Church to Saro’s but, which was again not accepted as, in truth and in fact, there was really no transaction between Saro’s and the Sta. Rosa Baptist Church. All along, it was you and Mr. Camcaman who dealt directly with Saro’s.

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 Saro’s. 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 Saro’s, as what you want us to believe. At best, your explanation is a mere afterthought desperately concocted to exculpate yourself.

As Facilities Manager, a very sensitive and confidential position, the nature of your work demands of you that your actions should not be tainted with any suspicion or impropriety. However, you failed in this regard and abused your position to advance your self-interest.

In view of the foregoing, you are hereby terminated from the service, retroactive July 24, 1999, the date you were placed under preventive suspension. Please proceed to the Finance and Accounting Department to clear yourself from any accountability and to claim whatever unpaid salaries and benefits which are still due you as of this date.

For your information and guidance.38

Based on the foregoing, the Court finds and so holds that indeed, the petitioners’ reliance on the foregoing facts to justify the dismissal of respondent De Guzman from employment is misplaced.

First. The scrap metals, including the steel purlins, were already classified as scrap materials and ready for disposal. No less than the written statements of the witnesses for the petitioners confirm this. SNK Mechanical Supervisor Nat Balayan stated that the 10-wheeler truck was "about to load scrap irons, which includes c-[purlins]. Knowing that c-[purlins] could be used for braces of heap-filter box hangers, I immediately informed Mr. Machidori if I would stop the hauling, to which he consented." On the other hand, SNK Engineer Maurice Victoriano stated that when respondent De Guzman called him and inquired whether the scrap materials at the Fuji Electric Warehouse Area could already be disposed of, he (Victoriano) replied that "everything was [okay] for disposal considering that this is [FCPP’s] scope." The report of Machidori is particularly revealing:

I went to Fuji Electric Warehouse last July 10 (rainy day) to check [out] Warehouse situation. I noticed that scrap materials are being carried out by a truck. I met Mr. Adrian – Fujitsu Facilities Staff and asked me that they will take out those scrap materials. SNK Staff suggested using those scrap materials for BIF Hepa Box steel supports. So I requested Mr. Adrian [Camcaman] to separate some materials that we want to use and take out [the] others.

During our Construction meeting, Facilities explained that they controlled scrap and unpacked materials for disposal. Earlier I thought that taking out those materials are good for maintaining Fuji Electric Warehouse Area. So I requested them to take out those unrecycled materials.39

Thus, the Court agrees with the following ratiocination of the appellate court when it denied the petitioners’ motion for reconsideration of its decision:

[T]his Court would like to stress, as borne out by the pleadings submitted by both parties, that the subject scrap metal [purlins] were already in the scrap yard ready for hauling. It was the building contractor and not petitioner Victor de Guzman who determined whether the metals are scrap metals. Hence, the assertion of the private respondents that petitioner Victor de Guzman prematurely declared the metal [purlins] as scrap materials is without basis.40

In fine then, the materials at the said warehouse were already considered scrap and ready for disposal. The hauling was stopped by the SNK employees because their superiors felt that pieces of steel purlins could still be used in the construction of a building in the company premises. Thus, Victoriano and Balayan, with the conformity of their superior Machidori, requested that some pieces be left behind for the purpose.

Second. No fraud or bad faith could be attributed to respondent De Guzman, as evinced by his readiness to disclose his participation in the transaction between Saro’s 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 Guzman’s dismissal from employment is his alleged involvement in the purchase of the steel purlins from petitioner FCPP’s 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 Saro’s. 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.41Loss 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, Saro’s, 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 Guzman’s 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 member’s 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 employee’s 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 employee’s 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 employee’s 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 employer’s interest.58

In this case, the Court finds that respondent Alvarez’s 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 Saro’s Trucking (FCPP garbage hauler) and [accused] of manipulating scrap metal which is not true since the church buyer and Saros agreed for a fee of P3.00/kg. [where] Saro will profit P0.40/kg plus hauling fee.

Question: WHY?

Answer: Mr. De Guzman was able to improve the waste management wherein Saro have to pay close to P0.25 million pesos for June scrap alone against Saro’s previous collection of around P15,000/month only.

THE PLOT IS OBVIOUS BUT IS IT JUST TO SUSPEND A GOOD MAN LIKE MR. DE GUZMAN THAN A GARBAGE HAULER WHO DEVILISHLY [PROFITED] FROM FCPP WITHOUT SWEAT? PLS. HELP US…59

There is no showing that the sending of such e-mail message had any bearing or relation on respondent Alvarez’s 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 Saro’s, 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 employee’s 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 Worker’s Union (AWU) v. NLRC (291 SCRA 219 [1998]), the dismissed employee called his supervisor "gago ka" and taunted the latter by saying "bakit, ano’ng 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 company’s 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 don’t 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 company’s board of directors calling the executive vice-president and general manager a "big fool," "anti-Filipino" and accusing him of "mismanagement, inefficiency, lack of planning and foresight, petty favoritism, dictatorial policies, one-man rule, contemptuous attitude to labor, anti-Filipino utterances and activities." In this case, the records do not show that petitioner made any such false and malicious statements against any of his superiors.62

In fine, the petitioners failed to show that the respondents’ acts were sufficient to warrant their dismissal from employment, for loss of trust and confidence on one hand for respondent De Guzman, and for gross misconduct as against respondent Alvarez on the other. To reiterate, it has not been shown that the respondents had been previously found guilty of any infraction of company rules and regulations during the period of their employment.

Under Article 279 of the Labor Code, and employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to the payment of his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent, computed from the time his compensation was withheld from him (which, as a rule, is from the time of his illegal dismissal) up to the time of his actual reinstatement.63 These remedies give life to the worker’s 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 employee’s 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.

G.R. No. 125671           January 28, 2000

CONDO SUITE CLUB TRAVEL, INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION (Third Division) and FLORENCIO LALO, respondents.

QUISUMBING, J.:

This special civil action for certiorari assails the decision of public respondent dated January 29, 1996 in NLRC NCR Case 09-06751-94, and its resolution dated June 28, 1996, which denied petitioner's motion for reconsideration.

The records show that private respondent was first employed by Sunette Realty Development Corporation as "housekeeper" with a monthly compensation of P8,000.00. After two months, private respondent signed a new employment contract with petitioner, Condo Suite Club Travel Inc., under the same terms of employment. Both firms belong to ARCON Group of Companies, run by the same management and board of directors.

In July 1992, private respondent's salary was reduced to P6,000.00 because of adverse business conditions. Expectedly, private respondent complained with the management. To placate him, private respondent's salary was adjusted to P6,500.00. Private respondent was receiving such salary until his dismissal although he was then already performing the duties and responsibilities of a front desk supervisor in petitioner's hotel. Aside from his employment with petitioner, private respondent owned a car-for-hire, which he regularly rented to a certain Joselito Landrigan at the rate of P400.00 a day. Landrigan, in turn, operated the car as a taxi with himself as driver.1âwphi1.nêt

On August 15, 1994, Landringan approached Editha Mariano, front desk clerk at petitioner's hotel. He requested Mariano that his alleged collectible from a certain In Hu, a Korean guest in the hotel, be included in the hotel bill of said guest. He claimed that Mr. Hu owed him P2,000.00 for two-day rental of private respondent's car. Acceding to Landrigan's request, Mariano entered the amount in the statement of account of the guest to make the total billing of P16,710.00. Upon checking-out from the hotel, Mr. Hu paid his bill through his credit card. As he was in a hurry, he left without verifying his statement of account. This incident is reflected in the handwritten account of Mariano dated September 23, 1994, herein below quoted:

I was the front desk clerk on duty when Mr. In Hu Rm. 2002 checked-out on August 15, 1994. Before he checked-out Lito (driver) approached me and told me that a Korean from Room 2002 hired him for two days. He told me to charged (sic) him (the guest) P2,000.00.

I entered P2,000.00 to his Statement of Account and inform him of the total. He was so much in a hurry that he didn't get the latest Statement of Account for P16,710.00. I gave him the Card Holder's Copy and Company's Receipt for the same amount.1

While in Korea, Mr. Hu noticed the discrepancy between the statement of account issued by petitioner and the charge slip of his credit card. Thus, on coming back to the Philippines, he dropped by at petitioner's hotel and complained about the overbilling. The report of Allan Padua dated September 13, 1994, regarding the incident states:

Last August 8, 1994, Mr. In Hu checked in at Rm. 2002. He stayed for seven (7) days. He was so in a hurry when he checked out on August 15, 1994. He was charged thru his Visa card the amount of P16,710.00 without noticing that the written amount on his Statement of Account is only P14,710.00. He only noticed the discrepancy when he reached Korea.

Yesterday, September 12, 1994 in the morning, he came to the Front Desk and was complaining. I approached him and he showed me his charge slip and Statement of Account. Both seem not to tally. I made an investigation and found out that Front Desk personnel made a big mistake by charging him P2,000.00 higher than his actual bill in his (Mr. Hu) Statement of Account which is only P14,710.00.

Upon further investigation, I found out that the P2,000.00 in contention was entered as a transportation account which the guest denied because he (Mr. Hu) paid for his own transportation from the airport to [the] Condo Suite.

This incident resulted to Mr. Hu's transfer to the competitor, Suite Shine.2

In response to the abovequoted report, private respondent averred that although Padua's report did not mention him as the one responsible for the overbilling, he had to explain his side being the front desk supervisor and owner of the car involved in the controversy. He pointed out that the statement of account referred to by Mr. Hu was given a day before he checked out and did not reflect the latest charges, hence, the total billing shown amounted only to P14,710.00. Private respondent related that on his last day at the hotel, Mr. Hu was informed of his total account amounting to P16,710.00 which the latter acknowledged by signing and accepting the corresponding receipt. He recalled that Mr. Hu was indeed in a hurry so that the Korean did not get his latest statement of account which by then reflected the additional P2,000.00 and making the total charges P16,710.00.3

In the investigation that ensued, it was shown that there was really no car accommodation as claimed by Landringan. In his handwritten statement dated September 16, 1994, Landrigan admitted that he approached Mariano at the front desk and demanded payment for Mr. Hu's alleged transportation expense. He also claimed to have received the amount P2,000.00 through a check issued by petitioner on August 17, 1994 or two days after Mr. Hu left for Korea. However, he asserted that he returned the said amount on September 16, 1994, in order not to tarnish the image of petitioner hotel.4

Eventually, petitioner's staff confirmed the error in the billing of Mr. Hu. Upon return of the P2,000.00 by Landrigan, petitioner refunded the amount to the Korean.

On September 26, 1994, petitioner terminated the services of private respondent on the ground of loss of confidence for the latter's malicious intent to defraud a guest of the hotel.5

On September 14, 1994, before his dismissal, private respondent filed a complaint for diminution of salary before the Arbitration Branch of NLRC. Subsequently, after having been dismissed, private respondent amended aforesaid complaint and included the charge of illegal dismissal from employment. During the arbitration proceedings, petitioner offered to reinstate private respondent which the latter rejected. Thereafter, the labor arbiter, in a decision dated July 6, 1995, dismissed said complaint for diminution of salary and illegal dismissal for lack of merit.

On appeal, public respondent NLRC affirmed the order dismissing the complaint for diminution of salary, but modified the decision of the labor arbiter as regards illegal dismissal. It held that the overbilling incident is the singular handiwork of Landrigan as there is no evidence linking private respondent with the anomaly. It also ordered the reinstatement of private respondent with backwages but only up to the time when the offer of reinstatement was made on January 31, 1995. It disposed of the case as follows:

WHEREFORE, premises considered, the respondents are hereby ordered to reinstate herein complainants with backwages in the amount of P26,866.64. Accordingly, the dismissal of the complaint for diminution of salary is affirmed.

The appealed Decision is thus accordingly modified.

SO ORDERED.6

Its motion for reconsideration having been denied, petitioner filed the present petition. It seeks to annul the decision of public respondent ordering the reinstatement of private respondent. However, petitioner does not state the grounds relied upon for said annulment. We note that petitioner imputes neither lack or excess of jurisdiction, nor grave abuse of discretion, on the part of public respondent in rendering the assailed judgment.

Resort to a special civil action for certiorari under Rule 65 of the Rules of Court is limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and grave abuse of discretion amounting to lack of jurisdiction.7 The respondent acts without jurisdiction if he does not have the legal power to determine the case. There is excess of jurisdiction where the respondent, being clothed with the power to determine the case, oversteps his authority as determined by law. And there is grave abuse of discretion where the respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment as to be said to be equivalent to lack of jurisdiction.8 Since petitioner neither assails the jurisdiction of public respondent nor attributes grave abuse of discretion on part of the labor tribunal, this petition must fail.

Besides, petitioner did not comply with the rule on certification against forum shopping. The certification in this petition was improperly executed by the external legal counsel of petitioner. For a certification of non-forum shopping must be by the petitioner, or any of the principal parties and not by counsel unless clothed with a special power of attorney to do so. This procedural lapse on the part of petitioner is also a cause for the dismissal of this action.9

Even if the abovementioned procedural defects were to be set aside, the petition would still not prosper. Public respondent cannot be faulted for grave abuse of discretion. For we find its assailed judgment supported by factual and legal bases.

In its memorandum petitioner raises the following queries:

1. Whether there were just causes to terminate the private respondent?

2. Whether the reinstatement order by the Hon. NLRC is legal and proper?

3. Whether the award of backwages in the amount of P26,866.64 by the Hon. NLRC is legal and proper?10

Simply stated, the proper issue now for resolution is whether or not public respondent committed grave abuse of jurisdiction in modifying the decision of the labor arbiter and in ordering the reinstatement of private respondent.

The fundamental guarantee of security of tenure dictates that no worker shall be dismissed except for just and authorized cause provided by law, and after due process. The just and authorized causes are enumerated under Articles 282, 283 and 284 of the Labor Code. The due process requirement of notice and hearing is set-out in Article 277 (b) of the said Code.

As provided for in the Labor Code: "ART. 282. Termination by employer. — An employer may terminate an employment for any of the following causes: . . . (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. . . . " But it must be stressed that loss of confidence as a just cause for termination of employment is premised by the fact that an employee concerned holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employer's property. In the case of supervisory personnel occupying positions of responsibility, this Court has repeatedly held that loss of trust and confidence justifies termination.11

Termination of an employment on this ground does not require proof beyond reasonable doubt of the employee's misconduct. It is sufficient that there is some basis for the loss of trust or that the employer has reasonable ground to believe that the employee is responsible for the misconduct which renders him unworthy of the trust and confidence demanded by his position.12

The 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. Just cause must be shown, so as not to render the employee's constitutional right to security of tenure nugatory. Besides, for loss of confidence to be a valid ground for dismissal, the basis thereof must arise from particular proven facts. 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.13

In the instant case, petitioner failed to prove by ample evidence that private respondent intended to defraud Mr. Hu, as herein explained. Hence, there is no basis for petitioner to claim it lost the trust and confidence it had reposed upon private respondent. Noteworthy are the following circumstances that favor private respondent's innocence:

First. Mariano admitted in her written statement that she was the one responsible for entering the amount of P2,000.00 in Mr. Hu's statement of account. Nowhere in her written statement did she declare that private respondent directed her to make such entry. Further, petitioner failed to refute Mariano's declaration that the statement of account which she gave to Mr. Hu reflected only the total

charges due up to August 14, 1994, albeit he actually checked out of the hotel on August 15, 1994. This shows that the billing reflected on August 14, 1994 statement was not yet complete as the P2,000.00 outstanding account of Mr. Hu had yet to be incorporated therein.

Second. Landrigan, in his written statement admitted that he approached Mariano and he demanded payment of the transportation fee due him because he was previously hired by Mr. Hu's group for two days. Private respondent had nothing to do with Landrigan's demand for such payment. Landrigan believed in good faith that Mr. Hu actually owed him P2,000.00 when he served as driver for two days. That Landrigan returned the amount to petitioner did not in any way prove private respondent's wrongdoing.

Furthermore, the second statutory requirement for a valid dismissal stipulates notice and hearing. Before an employee can be dismissed, the employer must furnish the worker with two notices: (1) notice which apprises the employee of the particular acts or omissions for which dismissal is sought and (2) subsequent notice which informs the employee of the employer's decision to dismiss him. The twin requirements of notice and hearing constitute essential elements of the statutory process, and neither of these elements can be eliminated without running afoul of the procedural mandate.14

In this case, the evidence on record is devoid of any indication that petitioner complied with the requirements of due process prior to termination, as shown in the following discussion.

First. Petitioner did not notify private respondent of the particular acts or omissions for which he was dismissed. The incident report prepared by Mr. Padua is not the notice contemplated by law. Such report merely narrates the complaint aired by Mr. Hu against the front desk personnel. And, nowhere in said incident report did petitioner pinpoint private respondent as the person responsible for overcharging. In fact, it was only upon service of termination order that private respondent realized that the complaint of Mr. Hu was directed at him.

Second. Private respondent was not afforded his right to be heard. The hearing affords the employee an opportunity to answer the charge against him and to defend himself personally or with the help of a representative before dismissal is effected. Private respondent's reply letter addressed to Mr. Padua does not satisfy the requirement of ample opportunity to be heard. The said reply letter was written by private respondent in his capacity as front desk supervisor in order to shed light on the events that transpired involving Mariano and Landrigan. Private respondent was not then aware that the complaint was directed at him. Moreover, as there was no investigation conducted by petitioner, private respondent was not afforded an opportunity to confront Landrigan, Mariano or Mr. Hu.

In sum, there is no valid and just cause in terminating the employment of private respondent. With the finding that private respondent was illegally dismissed, he is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.15

Hence, aside from reinstatement, private respondent here is entitled to full backwages. However, the backwages awarded by public respondent was inadequate compensation for his travail. Public respondent limited private respondent's backwages from the date of his dismissal and up to the time when petitioner allegedly offered to reinstate private reinstatement. It explained that the failure of private respondent to work, after the supposed offer was made, can no longer be attributed to the

fault of petitioner. This, in our view, does not suffice to provide complete relief to the painful socio-economic dislocation of the employee and his family.

As previously stated, an employee who is unjustly dismissed is entitled to his full backwages computed from the time his compensation was withheld from him up to the time of his reinstatement. Mere offer to reinstate a dismissed employee, given the circumstances in this case, is not enough. If petitioner were sincere in its intention to reinstate private respondent, petitioner should have at the very least reinstated him in its payroll right away. We are thus constrained to conclude that private respondent should be paid by petitioner not only the sum of P26,866.64 awarded by the NLRC, but the petitioner should be held liable for the entire amount of backwages due the private respondent from the day he was illegally dismissed up to the date of his reinstatement. Only then could observance of labor laws be promoted and social justice upheld.

WHEREFORE, the instant petition is DISMISSED. The assailed DECISION of NLRC is AFFIRMED with the MODIFICATION that petitioner is hereby ordered not only to reinstate private respondent to his position but also to pay his full backwages from the day of his illegal dismissal until his actual reinstatement. Public respondent NLRC is hereby directed to make the computation of said full backwages including allowances and other benefits owing to the private respondent, and inform soonest all parties as well as this Court accordingly, within thirty days after receipt of this decision. Costs against petitioner.1âwphi1.nêt

SO ORDERED.

G.R. No. 158922             May 28, 2004

FERNANDO GO, petitioner, vs.COURT OF APPEALS and MOLDEX PRODUCTS, INC., respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This is a petition for review under Rule 45 of the Rules of Court seeking the reversal of the decision1 of the Court of Appeals dated June 30, 2003, in CA-G.R. SP No. 73349, which set aside the twin resolutions2 of the National Labor Relations Commission (NLRC).

The antecedent facts are as follows:

On April 26, 1986, petitioner Moldex Products, Inc. hired private respondent, Fernando Go as a salesman with a monthly salary of One Thousand Six Hundred Ninety One Pesos (P1,691.00) and an allowance of Five Hundred Ten Pesos (P510.00).3 Over the years, private respondent worked himself within petitioner's corporate structure until he eventually attained the rank of Senior Sales Manager with a monthly compensation of Fifty Thousand Pesos (P50,000.00) and an average sales commission of Fifteen Thousand Pesos (P15,000.00) per month.4

As the Senior Sales Manager of private respondent, petitioner was responsible for overseeing and managing the sales force of the company such as dealing with clients, getting orders, entering into agreement with clients, subject to the approval of higher management.5

Sometime in the middle of 1998, petitioner's attention was called by Antonio Roman, the Executive Vice-President and Chief Operating Officer of respondent corporation, regarding the discovery of alleged anomalies purportedly committed by the sales people under the Commercial and Industrial Division of the respondent's Marketing Department. The anomalies stemmed from the disbursement of funds by the respondent to government officials for the purpose of getting big supply contracts from the government.6

It appears that sometime in 1998, the accounts handled by the petitioner and his staff experienced collection problems. This difficulty in collection necessitated the conduct of an investigation by the respondent,7 which led to the discovery of anomalies. Among the sales personnel investigated was a member of petitioner's division. Consequently, respondent corporation dismissed a number of its personnel.8

For its part, respondent claimed that it also questioned petitioner and that "obviously feeling guilty for not exercising effective supervision over his subordinates, (petitioner) submitted a letter of resignation9 dated October 12, 1998 but effective on November 16, 1998."10 Respondent added that petitioner went on leave from October 12, 1998 to November 16, 1998. While on leave, petitioner worked for the release of his clearance and the payment of 13th month pay and leave pay benefits.

On the other hand, petitioner averred that he was not investigated. During his talk with the higher management of the respondent corporation, petitioner contended that the sales people who were found to be involved in the anomalies were directly getting instructions, relative to the disbursement of funds to government officials, from respondent's personnel who were occupying management positions higher than that of the petitioner.11

Petitioner further alleged that after the investigation, he was surprised to receive an advice from the respondent that his services were being terminated by the latter on account of command responsibility. But since the petitioner was not involved in the anomalies, he was promised payment of separation pay, commission and other benefits due him on account of his long and dedicated employment with the respondent. In addition, the respondent also granted to petitioner a distributorship agreement for the right to be a distributor of its products. In exchange, petitioner was asked to submit a courtesy resignation to the respondent.12 Thereafter, petitioner's responsibility as the senior sales manager of the respondent was eventually stripped from him.

On March 21, 2000, petitioner filed with the NLRC a complaint13 for constructive dismissal, separation pay, service incentive leave including damages and attorney's fees against the respondent.14 The case was docketed as NLRC NCR Case No. 00-03-01684-2000 and it was raffled to the office of Labor Arbiter Ermita T. Abrasaldo-Cuyuca.

On April 30, 2001, Labor Arbiter Abrasaldo-Cuyuca rendered a Decision15 the dispositive portion of which states:

WHEREFORE, judgment is hereby rendered in favor of the complainant and against the respondent.

1. Declaring the dismissal of complainant to be illegal;

2. Ordering respondent to pay complainant his backwages in the amount of P1,597,916.67;

3. To pay complainant his separation pay in the amount of P375,000.00

Ten Percent of the total award as attorney's fees.

Respondent appealed16 the aforesaid decision to the NLRC. On May 31, 2002, the Third Division of the NLRC promulgated a Resolution17 which affirmed with modification the Labor Arbiter's decision. As modified, the NLRC deleted the award of attorney's fees for lack of factual basis but it affirmed the rest of the Labor Arbiter's award in favor of herein petitioner. The dispositive portion of the decision reads:

WHEREFORE, the appealed decision is hereby AFFIRMED, with modification deleting the award of attorney's fees.

SO ORDERED.

Respondent sought a reconsideration of the NLRC decision which was denied in a Resolution18 dated July 31, 2002. Respondent filed a petition for certiorari with the Court of Appeals.19

As stated earlier, the Court of Appeals annulled and set aside the twin resolutions of the NLRC. In arriving at its decision, the Court of Appeals relied heavily on the annexes20 attached to the affidavit21 of Antonio Roman, the Senior Executive Vice and Chief Operating Officer of the respondent. The said annexes purportedly showed that, contrary to the allegations of the petitioner that he was stripped of his responsibility as a sales manager, he was actively performing his normal duties and functions between the periods of July and September 1998, the months immediately prior to his resignation on October 12, 1998.

Hence, this petition for review, raising the following arguments:

The Court of Appeals committed reversible error considering that:

1. It weighed at face value the sworn statement of Antonio Roman and its annexes, which were both presented for the first time on appeal;

2. It ruled that herein petitioner was not constructively dismissed rather he voluntarily resigned from the respondent;

3. It held that the petitioner's witnesses are biased and therefore tainted with prejudice against the private respondent;

4. It ruled that the resignation of the petitioner was not a result of the manipulation and deception of the private respondent, and;

5. It held that the NLRC committed grave abuse of discretion when it misappreciated the facts and rendered judgment contrary to established evidence.22

The petition lacks merit.

It is a well-established rule that the jurisdiction of the Supreme Court in cases brought before it from the Court of Appeals via Rule 45 of the 1997 Rules of Civil Procedure, as amended, is limited to reviewing errors of law.23 This Court is not a trier of facts. In the exercise of its power of review, the findings of fact of the Court of Appeals are conclusive and binding and consequently, it is not our function to analyze or weigh evidence all over again.24

The above rule, however, is not iron-clad. In Siguan v. Lim25 we enumerated the instances when the factual findings of the Court of Appeals are not deemed conclusive, to wit: (1) when the conclusion is a finding grounded entirely on speculations, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when the Court of Appeals, in making its findings went beyond the issues of the case and the same is contrary to the admission of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply brief are not disputed by the respondent; and when (10) the findings of fact are premised on the supposed evidence and contradicted by the evidence on record.

In the instant case, the issue is shrouded by a conflict of factual perception. We are constrained to review the factual findings of the Court of Appeals, because the conflict falls within the ambit of one of the recognized exceptions to the conclusiveness of its findings, i.e., when its findings of facts contradict those of the lower court, in this case that of the Labor Arbiter and the agency which exercised adjudicative functions over him, the NLRC.

The principal issue to be resolved in this case is whether or not the petitioner was constructively dismissed. Petitioner claims that his separation from employment with the respondent was a case of constructive dismissal, an allegation which the respondent refutes with its own set of evidence pointing to the petitioner's voluntary resignation.

After a careful review of the records of this case, we find sufficient reasons to uphold respondent's contention.

Constructive dismissal exists where there is a cessation of work because continued employment is rendered impossible, unreasonable or unlikely.26 It is present when an employee's functions, which were originally supervisory in nature, were reduced, and such reduction is not grounded on valid grounds such as genuine business necessity.27

Petitioner contends that he felt compelled to tender his resignation on October 12, 1998 because after the discovery of anomalies perpetrated by sales people under him, he started getting shabby treatment from the company, and that slowly, he was divested of his duties and responsibilities as the Senior Sales and Marketing Manager of the respondent. He, however, maintains that his resignation was involuntary.

In support of his contention, the petitioner submitted the respective affidavits of Mario Carangan III28 and Floriza Tuazon,29 his former co-employees, who both alleged that petitioner was one of the officers of respondent who was stripped of responsibilities and duties while the investigation of the anomalies was going on.

By way of rebuttal, the respondent challenged the contents of the sworn statements for being purely hearsay. With respect to the sworn statement of Ms. Floriza G. Tuazon, respondent argues that Ms. Tuazon resigned even before the petitioner. Thus, she could not be privy to the events involving petitioner which transpired after her resignation. More specifically, the cause of petitioner's resignation on October 12, 1998 was no longer within the competence of Ms. Tuazon.30 The sworn statement of Mr. Mario Carangan III also suffers from the same infirmity.

As correctly observed by the Court of Appeals:

It should be remembered that the petitioner has submitted a letter of resignation. It is thus incumbent upon him to substantiate his claim that his resignation was not voluntary but in truth was actually a constructive dismissal.31

The failure of the petitioner to fully substantiate his claim that the respondent stripped him of his duties and functions is fatal to his present petition. Except for the sworn statements previously discussed, which we have found to be lacking in probative value, petitioner did not present any other proof of the alleged stripping of his functions by the respondent. Petitioner's bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence.

Further, respondent presented copies of its confidential sales evaluation form32 which prove that, contrary to the allegations of the petitioner, he was still performing his duties and responsibilities one month prior to his resignation. This clearly negates his allegations that he was stripped of his duties.

Apparently, petitioner fully exercised the prerogatives and the responsibilities of his office as the Senior Sales Manager of the respondent during the time that the said functions were supposedly removed from him. Therefore, there can be no constructive dismissal to speak of. He who asserts must prove.33

Moreover, after petitioner resigned, he went on leave from October 12, 1998 to November 16, 1998, the date of the effectivity of his resignation. While on leave, he worked for the release of his clearance and the payment of his 13th month pay and leave pay benefits. In doing so, he in fact performed all that an employee normally does after he resigns. Petitioner has taken his theory of coerced or manipulated resignation out of the equation. If indeed the petitioner was forced into resigning from the respondent, he would not have sought to be cleared by the respondent and to be paid the monies due him. Resignation is the formal pronouncement or relinquishment of an office.34 The voluntary nature of petitioner's acts has manifested itself clearly and belie his claim of constructive dismissal.

The totality of the evidence indubitably shows that petitioner resigned from employment without any coercion or compulsion from respondent. His resignation was voluntary. As such, he shall only be entitled to his 13th month pay and leave pay benefits. These, however, have already been paid to him by respondent.35

WHEREFORE, the petition is DENIED and the decision of the Court Appeal dated June 30, 2003 is AFFIRMED. The complaint for constructive dismissal filed by respondent Fernando Go against petitioner is ordered DISMISSED.

SO ORDERED.

G.R. No. 154689             November 25, 2004

UNICORN SAFETY GLASS, INC., LILY YULO and HILARIO YULO, petitioners, vs.RODRIGO BASARTE, JAIMELITO FLORES, TEODOLFO LOR, RONNIE DECIO, ELMER SULTORA and JOSELITO DECIO, respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This is a Petition for Review on Certiorari seeking to set aside the Decision1 of the Court of Appeals dated October 18, 2001 and its subsequent Resolution dated August 7, 2002, which reversed the decisions of the Labor Arbiter and the National Labor Relations Commission (NLRC).

Respondents were regular employees of petitioner Unicorn Safety Glass Incorporated, a company engaged in the business of glass manufacturing. Respondents normally worked six (6) times a week, from Monday to Saturday, and were paid on a weekly basis. They were likewise officers of the organized union in petitioner company, owned and managed by the Spouses Lily and Hilario Yulo.

On March 2, 1998, Hilario Yulo, as general manager of Unicorn, issued a Memorandum2 informing respondents that effective April 13, 1998, their workdays shall be reduced due to economic considerations. Yulo cited several factors such as decrease in sales, increase in the cost of production, devaluation of the peso and increase in minimum wage, which contributed to the current economic state of the company. In a letter dated March 12, 1998, respondents registered their protest to the proposed reduction of working days and expressed doubts on the reasons offered by the company.3 Respondents also surmised that the management was merely getting back at them for forming a union especially since only the union officers were affected by the work reduction.

On April 6, 1998, Hilario Yulo issued another Memorandum4 announcing the implementation of a work rotation schedule to take effect from April 13, 1998 to April 30, 1998, which will effectively reduce respondents' workdays to merely three days a week. A copy of the planned rotation scheme was sent to the Department of Labor and Employment. Respondents wrote another letter of protest dated April 7, 19985 expressing their frustrations at the apparent lack of willingness on the part of petitioner company's management to address their concerns and objections. On the same day, respondents met with the Spouses Yulo and inquired as to the reasons for the imposition of the reduced workweek. They were told that it was management's prerogative to do so.6

On April 13, 1998, instead of reporting for work, respondents filed a complaint against petitioner company with the National Labor Relations Commission, docketed as NLRC Case No. NCR-00-04-

03277-98, for constructive dismissal and unfair labor practice, i.e., union busting, non-payment of five days service incentive leave pay and payment of moral and exemplary damages as well as attorney's fees. Respondents prayed for reinstatement and payment of full backwages.

Meanwhile, since respondents failed to report for work, petitioners sent each of them a telegram directing them to do so. On April 18, 1998, respondents sent Yulo a letter informing him that, in view of the management's apparent indifference to their plight and blatant violation of their rights, a complaint was lodged against petitioner company for constructive dismissal. Moreover, given the working environment they were subjected to, they decided not to report for work at all.7 Petitioner company replied by asking them to explain why they have not been reporting for work. However, respondents neither reported for work nor replied to petitioner company's telegrams.

On January 26, 1999, Labor Arbiter Felipe Pati rendered judgment finding that respondents were not constructively terminated by petitioner company. Thus:

Complainants claim that they were constructively terminated. However, evidence extant do not support this contention. What we see on records are the telegrams, letters and memoranda sent by respondents to complainants ordering the latter to report for work. Despite due receipt by the complainants of these communications, they simply ignored respondents' plea. Complainants deliberate refusal to report for work is very much evident from the number of letters they received from respondents which were all ignored.

It is true that complainants have sent to respondent a joint letter-reply dated April 18, 1998 (Annexes 35, Respondents Position Paper). However, said joint letter reinforces the fact that complainants were not terminated by respondents. In fact complainants admitted in this joint letter-reply that they have decided not to report for work because they did not agree with the report rotation adopted by respondents. From this admission and statement of complainant, we feel that the charge of illegal dismissal they filed against respondents is misplaced. If complainants strongly opposed the rotation adopted by respondents, they could have initiated an illegal rotation and not illegal dismissal case against respondents. As "good soldiers" complainants could initiate this case while they are reporting for work based on the adopted work rotation and let the Court decides whether or not this rotation is valid and legal. Certainly refusal to report for work is not a proper remedy.8

The Labor Arbiter likewise dismissed the charge of unfair labor practice for lack of legal and factual basis. Nonetheless, the Labor Arbiter ordered petitioner company to pay the respondents' claim for unpaid service incentive leave pay. The Labor Arbiter disposed of the case, thus:

WHEREFORE, the instant case is hereby dismissed for lack of merit. Respondents however, are ordered to pay complainants the total amount of P5,110.00 for unpaid service incentive leave pay as alluded in the above computation.

On the grounds of amicable settlement and subsequent withdrawals of their complaints, the cases of PAQUITO MANONGSONG and ELMER SULTORA are hereby dismissed with prejudice.

SO ORDERED.9

The case was appealed to the NLRC. During the pendency of the appeal, however, petitioner company filed a Motion to Dismiss alleging that respondents Basarte, Flores, Decio and Lor entered into amicable settlements and executed a "Waiver, Release & Quitclaim."10 Respondents' representative filed an Opposition thereto alleging that the "Waiver, Release & Quitclaim" executed by respondents were entered into without his knowledge and not in the presence of the Labor Arbiter; and that the amounts received by respondents were unconscionably inadequate.

In a decision dated October 31, 2000, the NLRC sustained the findings of the Labor Arbiter. On the issue of the amicable settlements, the NLRC stated:

We are not convinced that the amicable settlement entered into by complainants were involuntary and that the consideration thereof are unconscionable.

It is to be stressed that the complainants were the ones who went to the office of respondent for settlement. They acknowledged having signed the "Waiver, Release and Quitclaim" and brought the same before a Notary Public…. Given these factual circumstances, it is hard to believe that there was involuntariness on the part of the complainant when they settled their claims with respondent. In fact, almost a year have already lapsed since then. It is only now that complainants are claiming that their settlement was involuntary.

Anent complainants' claim that the consideration of settlement is unconscionable suffice it to state that the amount granted by way of settlement to complainants Rodrigo Basarte, Jaimelito Flores, Joselito Decio including that of complainant Teodolfo Lor (Records, p. 179) are more than the judgment award.11

The dispositive portion of the NLRC's decision states:

PREMISES CONSIDERED, the appeal from the Decision dated January 26, 1999 is hereby DISMISSED for lack of merit and the Decision is AFFIRMED.

Further, the motions to dismiss filed by respondents with respect to complainants Rodrigo Basarte, Jaimelito Flores, Joselito Decio and Teodolfo Lor are hereby GRANTED. Thus, insofar as said complainants are concerned their cases are dismissed with prejudice, as prayed for by respondents.

SO ORDERED.12

Unrelenting, the respondents filed a petition for certiorari with the Court of Appeals, which found respondents' case partly meritorious.

However, it declined to make a contrary finding on the charge of unfair labor practice for lack of clear-cut and convincing evidence. The dispositive portion of the Court of Appeals' decision is as follows:

UPON THE VIEW WE TAKE OF THIS CASE, THUS, the petition is substantially GRANTED. Private respondents are hereby ordered to reinstate to their former positions Rodrigo Basarte, Jaimelito Flores and Ronnie Decio, without loss of seniority rights and privileges, and to pay these three their full backwages from April 13, 1998 until their

reinstatement. Or, to award them separation pay, in case reinstatement is no longer feasible or possible. Private respondents are further sentenced to pay the aforenamed petitioners ten per cent (10%) of the total awards by way of attorney's fees. Costs shall also be taxed against private respondents.

SO ORDERED.13

Its Motion for Reconsideration having been denied, petitioners are before us on Petition for Review on Certiorari, raising the following assignment of errors:

I.

THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE RULING OF THE LABOR ARBITER A QUO WHICH WAS AFFIRMED BY THE NLRC HOLDING THAT PRIVATE RESPONDENTS WERE NOT ILLEGALLY DISMISSED FROM THEIR EMPLOYMENT.

II.

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RELEASE, WAIVER AND QUITCLAIMS EXECUTED BY PRIVATE RESPONDENTS RODRIGO BASARTE AND JAIMELITO FLORES NULL AND VOID.14

The petition lacks merit.

Constructive dismissal or a constructive discharge has been defined as quitting because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay.15Constructive dismissal, however, does not always take the form of a diminution. In several cases, we have ruled that an act of clear discrimination, insensibility, or disdain by an employer may become so unbearable on the part of the employee so as to foreclose any choice on his part except to resign from such employment. This constitutes constructive dismissal.16

In the case at bar, we agree with the Court of Appeals that petitioners' bare assertions on the alleged reason for the rotation plan as well as its failure to refute respondents' contention that they were targeted due to their union activities, merit the reversal of the Labor Arbiter's decision. It was incumbent upon petitioners to prove that the rotation scheme was a genuine business necessity and not meant to subdue the organized union. The reasons enumerated by petitioners in their Memoranda dated March 2, 1998 were factors too general to actually substantiate the need for the scheme. Petitioners cite the reduction in their electric consumption as proof of an economic slump. This may be true to an extent. But it does not, by itself, prove that the rotation scheme was the most reasonable alternative to remedy the company's problems.

The petitioners' unbending stance on the implementation of the rotation scheme was an indication that the rotation plan was being implemented for reasons other than business necessity. It appears that respondents attempted on more than one occasion to have a dialogue with petitioner Hilario Yulo to discuss the work reduction. Good faith should have prompted Yulo to hear the side of the respondents, to come up with a scheme amenable to both parties or attempt to convince the

employees concerned that there was no other viable option. However, petitioners ignored the letters sent by respondents, which compelled the latter to seek redress with the Labor Arbiter.

We are mindful that every business strives to keep afloat during these times when prevailing economic situations turns such endeavor into a near struggle. With as much latitude as our laws would allow, the Court has always respected a company's exercise of its prerogative to devise means to improve its operations. Thus, we have held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.17 Further, management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its employees.18

However, the exercise of management prerogative is not absolute. By its very nature, encompassing as it could be, management prerogative must be exercised in good faith and with due regard to the rights of labor—verily, with the principles of fair play at heart and justice in mind. While we concede that management would best know its operational needs, the exercise of management prerogative cannot be utilized as an implement to circumvent our laws and oppress employees. The prerogative accorded management cannot defeat the very purpose for which our labor laws exist: to balance the conflicting interests of labor and management, not to tilt the scale in favor of one over the other, but to guaranty that labor and management stand on equal footing when bargaining in good faith with each other.19

In the case at bar, the manner by which petitioners exercised their management prerogative appears to be an underhanded circumvention of the law. Petitioners were keen on summarily implementing the rotation plan, obviously singling out respondents who were all union officers. The management's apparent lack of interest to hear what the respondents had to say, created an uncertain situation where reporting for work was tantamount to an acquiescence in an unjust situation.

Petitioners argued that they "exerted diligent and massive efforts" to make respondents return to work, highlighting the telegrams and memoranda sent to respondents.20 It is well established that to constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. Abandoning one's job means the deliberate, unjustified refusal of the employee to resume his employment and the burden of proof is on the employer to show a clear and deliberate intent on the part of the employee to discontinue employment.21

However, petitioners' charge of abandonment of work by respondents does not hold water when taken in light of the complaint for constructive dismissal. We have held that a charge of abandonment is totally inconsistent with the filing of a complaint for constructive dismissal— and with reason.22 Respondents cannot be said to have abandoned their jobs when precisely, the root cause of their protest is their demand to maintain their regular work hours. What is more, respondents even prayed for reinstatement and backwages. Clearly, these are incompatible with the proposition that respondents sought to abandon their work.

Anent the issue of the validity of the waivers and quitclaims executed by some of the respondents, petitioners argue that while admittedly, the amounts indicated therein were not substantial, it does not necessarily follow that these were executed under duress. Moreover, the waivers and quitclaims

were executed when the complaint for illegal dismissal was already dismissed by the Labor Arbiter. Thus, the waivers and quitclaims were executed under valid circumstances.

We do not agree. To be sure, the law looks with disfavor upon quitclaims and releases by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities. We have clarified the standards for determining the validity of quitclaim or waiver in the case of Periquet v. National Labor Relations Commission,23 to wit:

If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.

In the instant case, while it is true that the complaint for illegal dismissal filed by respondents with the Labor Arbiter has been dismissed, their appeal before the NLRC was still pending. In fact, petitioners even filed a Motion to Dismiss with the NLRC on the very ground that the respondents, or at least most of them, have executed said "Waivers, Releases and Quitclaims." Petitioners cannot therefore deny that it was in their interest to have respondents execute the quitclaims.

Furthermore, the considerations received by respondents Basarte and Flores were grossly inadequate considering the length of time that they were employed in petitioner company. As correctly pointed out by the Court of Appeals, Basarte worked for petitioner company for 21 years, that is, from 1976 to 1998, while Flores worked from 1991 to 1998. Basarte and Flores only received P10,000.00 and P3,000.00, respectively. In contrast, Manongsong and Soltura, two workers who opted to settle their respective cases earlier on, both started in 1993 only, but were able to take home P16,434.00 each after executing their waivers.

Article 279 of the Labor Code provides that an employee who is unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances, and to the other benefits or their monetary equivalent computed from the time of his actual reinstatement. However, if reinstatement is no longer possible, the employer has the alternative of paying the employee his separation pay in lieu of reinstatement.

WHEREFORE, the instant petition is DENIED, and the decision of the Court of Appeals of October 18, 2001 in CA-G.R. SP No. 63577 is AFFIRMED in toto. Costs against petitioners.

SO ORDERED.

G.R. No. 178453               April 16, 2009

GLORIA ARTIAGA, Petitioner, vs.

SILIMAN UNIVERSITY and SILIMAN UNIVERSITY MEDICAL CENTER/SILIMAN UNIVERSITY MEDICAL CENTER FOUNDATION, INC., Respondents.

D E C I S I O N

CARPIO-MORALES, J.:

Respondent Siliman University Medical Center (SUMC) hired Gloria Artiaga (petitioner) in June 1978.

On September 13, 1998, petitioner, then Credit and Collection Officer, resigned from SUMC by letter of even date reading:

I am writing this letter of explanation   with a broken spirit and in distress[ed] heart as if myself broken to pieces and I asked God to be my refuge in this time of tribulation. I am not this bad as you and others may think of me. I pray to Him to listen [to] my prayers to let me stand again. The people in the whole community condemned me.

I committed errors and mistakes in the posting of ledger cards   as seen on the cards but I could not be certain how I could do this. I can’t think anymore. Maybe some of [these] are temporary receipts. As to insurance payments as questioned by the auditors, all cheques coming from insurance company which are payable to SUMC are receipted and later posted to individual ledgers for in patient but for outpatient the Statement of Account is discounted once it is paid.

Sir, I am very sorry that this trouble happened and I am now struggling. I am just crushed and I don’t want to move anymore. Please forgive my mistakes. Please give me a chance to stand again.

I have endorsed my responsibility to the one who is taking over my work and I have oriented her of all she is supposed to do except those jobs like appearing [in] court for your legal cases related to patient account. Sir, please consider this letter a resignation letter because I could [not] think of something that could make me stand again and I have already asked the Lord for this decision.1 (Emphasis and underscoring supplied)

After petitioner submitted the above-quoted letter, the operation of SUMC was transferred from SU to petitioner Siliman University Medical Foundation, Inc. (the Foundation).

More than three years after petitioner resigned or on November 6, 2001, she filed a Complaint2 for constructive dismissal against SU, SUMC and the Foundation.

In her Position Paper,3 petitioner claimed that in the last week of August 1998, she was suddenly instructed to indorse all her responsibilities and/or papers to a new employee, one Mrs. Catacutan, and to give the latter an orientation about her duties within two weeks; that she was given no new assignment and when she asked for the instructions, no explanation was given except that a mention was made about some discrepancy in the posting of entries in four patients’ ledgers; that she asked to be allowed to dig up files of patients’ ledgers, official receipts, and charge slips to explain her side, but to no avail; that eventually, Mrs. Catacutan was designated to take her place as Credit and Collection Officer; and that after two weeks, as she was extremely humiliated and sensed that her continued employment without any new assignment would humiliate her further, she tendered her resignation on September 13, 1998.

In their Position Paper,4 respondents gave their side as follows: In September 1998, an audit report found irregularities in the transactions under petitioner’s control and supervision. Thus, petitioner was found to have posted official receipts and payments in the individual patient accounts receivable ledger cards but issued official receipts for lower amounts and misappropriated the difference. And she used fictitious receipts in posting payments in the patients’ ledger cards and kept the actual payments.5 Petitioner misappropriated a total ofP300,000.

SUMC thus wrote petitioner on September 11, 1998 requiring her to explain in writing, within five days, why no disciplinary action should be taken against her,6 and she was preventively suspended for 30 days and requested to turn over all monies, files, and records within her control.

Complying, petitioner, by the above-quoted Sept. 13, 1998, gave her explanation and at the same time tendered her resignation which was accepted.7

By Decision8 of November 29, 2002, Labor Arbiter Geoffrey P. Villahermosa dismissed the complaint   for lack of legal and factual basis.

On appeal, the National Labor Relations Commission (NLRC) set aside the Labor Arbiter’s Decision, it finding that petitioner was constructively dismissed. It thus ordered respondents to reinstate petitioner and pay her full backwages from September 13, 1998 up to the time of her actual reinstatement.9 Respondents’ Motion for Reconsideration10 having been denied,11 they filed a Petition for Certiorari12 before the Court of Appeals.

By Decision13 of May 30, 2006, the Court of Appeals reversed the NLRC decision and reinstated the Labor Arbiter’s decision, prompting petitioner to file the present petition.14

Petitioner faults the Court of Appeals in reevaluating the NLRC’s findings of fact for, so she contends, a petition for certiorari is limited to issues of want or excess of jurisdiction, and grave abuse of discretion does not include an inquiry as to the correctness of the evaluation of evidence.15

The Court is not impressed.

While review of NLRC decisions via Certiorari should be confined to issues of want of jurisdiction and grave abuse of discretion,16 grave abuse of discretion is committed when the board, tribunal or officer exercising judicial function fails to consider evidence adduced by the parties,17 as did the NLRC in the present case. Moreover, where a party’s contention appears to be clearly tenable, or where the broader interest of justice and public policy so require, the error may be corrected in a certiorari proceeding,18 as again in the present case.

In reversing the Labor Arbiter’s decision, the NLRC upheld petitioner’s version and found her to have been constructively dismissal. Petitioner presented no evidence to substantiate her claim, however.19

On the other hand, SUMC’s evidence of petitioner’s irregular acts is documented. And it sent petitioner a Notice of September 11, 1998 requiring her to explain her side and placing her under preventive suspension. Petitioner’s above-quoted letter-explanation cum resignation is self-explanatory.

Against the documentary evidence of respondents, petitioner’s claim thus fails.

Petitioner’s claim that respondents’ pieces of evidence were fabricated, viz,

Firstly, these documents [Notice of Preventive Suspension and Audit Report] were neither served [to] nor received by complainant. None of the documents even bear a signature identical to that written in her resignation letter. The signatures in Annexes ["2"] [Notice of Preventive Suspension] and ["3"] [September 11, 1998 Audit Report] are not even identical to each other. As claimed by respondents these two documents were supposedly received by complainant on September 11, 1998 or before her resignation. Strangely, the signature appearing on the left bottom of Annex ["3"] was dated 9/14/98 2:00PM while the recipient’s signature in Annex ["2"] has no date at all. Why [this] variance if the documents were actually given to complainant on the same day, September 11, 1998?20(Underscoring supplied)1avvphi1

does not persuade. Petitioner’s earlier-quoted explanation-resignation letter of September 13, 1998 unquestionably shows that she received the notices referred to, otherwise, to what matters she was explaining therein?

In fine, the Court of Appeals did not err in overturning the findings of the NLRC.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated May 30, 2006 is AFFIRMED.

SO ORDERED.

G.R. No. 176506               November 25, 2009

MERCK SHARP AND DOHME (PHILIPPINES) and PETER S. CARBONELL, Petitioners, vs.JONAR P. ROBLES, GEORGE G. GONITO and CHRISTIAN ALDRIN S. CRISTOBAL, Respondents.

D E C I S I O N

NACHURA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court is the Court of Appeals (CA) Decision1 in CA-G.R. SP No. 94265 which partially granted the petition for certiorari filed by respondents Jonar P. Robles, George G. Gonito and Christian Aldrin S. Cristobal and reversed the National Labor Relations Commission’s (NLRC’s) finding of illegal dismissal as regards Cristobal in NLRC CA No. 043454-2005. In turn, the NLRC affirmed the Labor Arbiter’s dismissal of respondents’ complaint against petitioner Merck Sharp and Dohme (Philippines) (MSD) for illegal dismissal.2

The facts, fairly summarized by the CA, follow.

[Respondents] Jonar P. Robles, George G. Gonito, and Christian Aldrin S. Cristobal (hereafter Jonar, George, and Christian, respectively and [respondents] collectively) are former health care

representatives assigned at the District V-MSD Cardiovascular Unit, Region I (hereafter MSD –V) of [petitioner corporation] Merck Sharp and Dohme x x x, a pharmaceutical corporation organized under Philippine law.

[Respondents] alleged that on November 28, 2003, they were summoned together with the other health care representatives in MSD-V by their Regional Sales Manager, Peter S. Carbonell [petitioner Carbonell] to a meeting. [Respondents] claim that no meeting took place. Instead, the other health care representatives were directed to leave while [respondents] were told to stay behind.

Thereafter, the director of Human Resources, General and Legal, Jerome Sarte, came and distributed to [respondents], Employees’ Notice to Explain (hereafter ENTE) dated November 27, 2003. [Respondents] were told that they were being preventively suspended based on an evidence gathered through an informer-witness. [Respondents] alleged that the ENTE was read aloud to them. A sample of an ENTE reads as follows:

Gonito, George

"It has come to the attention of management, through a signed document submitted by a source we cannot reveal at this point, that you may have been involved in several questionable transactions deemed contrary to company and corporate values. The seriousness of accusations contained therein prompted management to conduct an initial investigation of facts, which involved a re-review of the Expense Reports you have submitted beginning at the start of this year. Preliminary findings showed that there is cause for citing you under several provisions of the Company’s Code of Conduct, herein enumerated:

Facts of the case:

1. EXPENSE REPORT for January 16-31

Event: PR Campaign for VMMC Supply Department Receipt: Lorna’s Food Services – 6 February 2003, Php 2,500. Receipt appeared old and yellowish x x x When double checked x x x the person talked to said that they are not

engaged in Catering Services An independent private investigation agency commissioned by the

company, x x x was able to locate said Lorna’s Food Services x x x she denied having validly issued the said receipt and that the signature in the said receipt was not her hand nor any other authorized signatory of her business. In other words, the transaction covered by the said receipt is fictitious.

x x x x

2. EXPENSE REPORT for April 16-30 x x x

Event: Journal Club Meeting Receipt: Lorna’s Food Services – 23 April 2003, Php 3,500.

Same comments as above on phone double checking and proprietor declaration.

Receipt[,] however[,] had a Control Number (397), which according to private investigation agency appeared to be manually stamped and therefore spurious. x x x

POSSIBLE DISCIPLINARY INFRACTION/S

1. DISHONESTY: Misrepresentation, forging, or falsifying personal or company records. ( 1st Offense – Termination)

2. OFFENSES AGAINST COMPANY INTEREST: Submitting false, misleading, or inaccurate data about the work of other employees.

a) willful (1st Offense – Termination)

b) Due to negligence (1st Offense – Written Reprimand)

3. LOSS OF TRUST AND CONFIDENCE

You are hereby required to explain in writing your side on the facts above mentioned, within seventy-two (72) hours upon receipt of this notice (Tuesday, 2 December 2003). Kindly state in clear terms your reasons behind this issue and explain why no corrective action, including termination of employment should be taken against you for above alleged actions. Please take note also that your written response will be taken without prejudice to other incriminatory findings which may be discovered in the course of formal investigation and hearing of this case.

x x x x

In the meantime, pending completion of formal investigation and hearing of this case, and in view of the seriousness of the charges raised in the light of the sensitivity of the position you presently occupy, management is putting you under PREVENTIVE SUSPENSION effective immediately upon receipt of this notice. You shall be notified in due course of the scheduled administrative investigation to be conducted by the Company. Please make the necessary turn over of your Company Car to the Admin. Officer within twenty-four (24) hours, as well as other company properties in your possession before going on preventive suspension. The company will allow you to further use your company issued cell phone while on Preventive Suspension to allow open communication lines when this case is on-going. However, billing for your calls during said period will be fully charged to your personal account."

[Respondents] were directed to submit a written explanation within 72 hours from receipt and their salaries and benefits will be withheld indefinitely. [Respondents] assert that the ENTEs were general and the documents [referred] to were not attached.

On December 1, 2003, [respondents] filed with the Labor Arbiter a complaint for illegal suspension. On December 4, 2003, [petitioners] summoned [respondents] for a hearing. During the said hearing, [respondents] reiterated their request that they be furnished a copy of the alleged primary findings against them. [Petitioners] refused stating that the investigation is not a formal hearing thus, a trial type proceeding was inapplicable.

On December 22, 2003, [respondents] Jonar and George received a Notice of Corrective Action (hereafter NOCA) informing them that management has decided to terminate their services effective immediately. Christian, however, was informed that his suspension was lifted. Jonar and George filed a supplemental complaint affidavit for illegal termination.

Christian, on the other hand, reported back for work. He was shocked, however, when he discovered that he was reassigned to District I of Baguio City and La Union as his new area of responsibility. Christian requested for a transfer. His request was not favorably acted upon, instead, he received his second ENTE dated January 19, 2004, for dishonesty and offenses against company interest. [Respondent] Christian answered the ENTE stressing that although he was previously exonerated, he is again being charged for the same offense. To support his case, Christian secured a certification from the Chief Resident of the Department of Family Medicine FEU-NRMF with regard [to] his sponsoring [a] lecture in the said department on May 7, 2003. Thereafter, Christian got sick due to the stress brought about by his receiving several ENTEs. As such, he was compelled to apply for a sick leave. Christian stated that his sick leave application was not acted upon and instead he received his third ENTE dated February 4, 2004, for insubordination, serious misconduct or willful disobedience. Christian, thereafter, resigned citing oppression and utter unbearability of the work atmosphere. Christian then amended his complaint for constructive dismissal.

On November 15, 2004, the Labor Arbiter rendered a decision dismissing [respondents’] complaint for utter lack of merit. Upon appeal to the NLRC, the latter affirmed the Labor Arbiter.3

Undaunted, respondents filed a petition for certiorari before the CA alleging grave abuse of discretion in the NLRC’s dismissal of their complaint.

As previously adverted to, the CA partially granted the petition for certiorari and declared that respondent Cristobal was constructively dismissed by petitioner MSD.

Hence, this petition for review on certiorari raising the following issues:

1. [WHETHER THE] COURT OF APPEALS DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS WHEN IT GAVE DUE COURSE TO PRIVATE RESPONDENT’S (CRISTOBAL’S) PETITION FOR CERTIORARI.

2. [WHETHER] THE COURT OF APPEALS GRAVELY ERRED WHEN IT REVERSED THE NLRC DECISION.

3. [WHETHER THE] HONORABLE COURT MAY REVIEW FACTUAL CONCLUSION[S] OF THE COURT OF APPEALS WHEN CONTRARY TO THOSE OF THE NLRC OR THE LABOR ARBITER.4

We first dispose of the procedural issues.

The issue of whether we can review factual conclusions of the CA, when contrary to those of the administrative tribunal, need not detain us unnecessarily. We have long held in a number of cases that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence.5 Corollary thereto is our

well-entrenched holding that this Court is not a trier of facts; this is strictly adhered to in labor cases.6 However, the rule admits of exceptions when: (1) the findings are grounded entirely on speculation, surmises or conjectures; (2) the inference made is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) in making its findings, the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both appellant and appellee; (7) the findings are contrary to those of the trial court; (8) the findings are conclusions without citation of specific evidence on which they are based; (9) the facts set forth in the petition, as well as in petitioner’s main and reply briefs, are not disputed by respondent; (10) the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.7 In the case at bar, we gave due course to MSD’s petition as the findings of fact and the conclusions of law of the Labor Arbiter and the NLRC differ from those of the CA.

MSD next contends that the CA gravely erred when it did not dismiss outright respondent Cristobal’s petition for certiorari for the latter’s failure to first file a motion for reconsideration of the NLRC’s resolution.

While MSD is correct in stating that, generally, certiorari, as a special civil action, will not lie unless a motion for reconsideration is filed before the respondent tribunal to allow it an opportunity to correct its imputed errors,8 the rule admits of the following exceptions:

(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;

(b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court;

(c) where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable;

(d) where, under the circumstances, a motion for reconsideration would be useless;

(e) where petitioner was deprived of due process and there is extreme urgency for relief;

(f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable;

(g) where the proceedings in the lower court are a nullity for lack of due process;

(h) where the proceedings was ex parte or in which the petitioner had no opportunity to object; and

(i) where the issue raised is one purely of law or where public interest is involved.9

The second and fourth exceptions are applicable in this case. As pointed out by respondent Cristobal, Jean Sarmiento, one of the complainants in NLRC-NCR Case No. 00-12-13804-2003 before the Labor Arbiter who was similarly situated as Cristobal and had likewise claimed constructive dismissal by MSD, filed a motion for reconsideration which was perfunctorily denied by the NLRC. At that moment, respondent Cristobal was justified in directly filing a petition for certiorari with the CA to annul the NLRC resolution. In point is Abraham v. National Labor Relations Commission:10

The rationale for the requirement of first filing a motion for reconsideration before the filing of a petition for certiorari is that the law intends to afford the tribunal, board, or office an opportunity to rectify the errors and mistakes it may have lapsed into before resort to the courts of justice can be had. In the present case, the NLRC was already given the opportunity to review its ruling and correct itself when the respondent filed its motion for reconsideration of the NLRC’s initial ruling in favor of petitioner. In fact, it granted the motion for reconsideration filed by the respondent and reversed its previous ruling and reinstated the decision of the Labor Arbiter dismissing the complaint of the petitioner. It would be an exercise in futility to require the petitioner to file a motion for reconsideration since the very issues raised in the petition for certiorari, i.e. whether or not the petitioner was constructively dismissed by the respondent and whether or not she was entitled to her money claims, were already duly passed upon and resolved by the NLRC. Thus the NLRC had more than one opportunity to resolve the issues of the case and in fact reversed itself upon a reconsideration. It is highly improbable or unlikely under the circumstances that the Commission would reverse or set aside its resolution granting a reconsideration.11

We now come to the pivotal issue for our resolution: whether respondent Cristobal was constructively dismissed by petitioner MSD.

MSD is adamant that the CA erred in not characterizing the work reassignment of respondent Cristobal as falling within the ambit of management prerogative and, thus, beyond challenge. In addition, MSD postulates that the work reassignment of medical representatives, such as respondent Cristobal, is not only dictated by the nature of the work, but is, more importantly, written in the employment contract.

Once more, we agree with MSD’s statement of the general rule that the work reassignment of an employee is a management prerogative. Indeed, even the Constitution recognizes "the right of enterprises to reasonable returns on investments, and to expansion and growth."12 Yet, we are quick to point out that the invocation of management prerogative carries the corresponding burden of proving such contention. We reiterated as much in the recent case of Norkis Trading Co., Inc. v. Gnilo:13

Well-settled is the rule that it is the prerogative of the employer to transfer and reassign employees for valid reasons and according to the requirement of its business. An owner of a business enterprise is given considerable leeway in managing his business. Our law recognizes certain rights, collectively called management prerogative as inherent in the management of business enterprises. We have consistently recognized and upheld the prerogative of management to transfer an employee from one office to another within the business establishment, provided that there is no demotion in rank or diminution of his salary, benefits and other privileges and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprises effectively.

The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.

The employer bears the burden of showing that the transfer is not unreasonable, inconvenient or prejudicial to the employee; and does not involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal.14

In the case at bar, specifically in the matter of respondent Cristobal’s transfer, the Labor Arbiter and the NLRC promptly dismissed Cristobal’s charge of constructive dismissal. Both labor tribunals relied heavily on the stipulation in the employment contract which reads:

9. You agree to be assigned to any work for such period as may be determined by [MSD] whenever the operations thereof require such assignment. It is also understood that, depending upon the operational requirements of [MSD], you may be assigned to any location in the Philippines. These assignments are subject to change any time whenever necessary in the interest of [MSD].

This provision, coupled with their finding that the new assignment did not involve a demotion in rank and/or a diminution in pay, led to the labor tribunals’ uniform conclusion that Cristobal unjustly refused to comply with his new work assignment, and was, therefore, not constructively dismissed.

In marked contrast, the CA, in ruling that Cristobal was constructively dismissed, had this to say:

This Court, however, takes exception to the ruling of the NLRC as regards the case of Christian. The pertinent portion of the NLRC’s ruling reads as follows:

"x x x. It is undisputed that complainants Sarmiento, Cristobal and Tomeldan were merely transferred to their new assignments as a result of an annual implementation of the new Territorial configuration/PHR Assignments usually done by the Company at the start of every year. x x x The records of the case are bereft of any evidence showing that their resignation was an involuntary one; and it was resorted to because their continued employment has become impossible, unreasonable or unlikely. It is worthy to note that said transfers affect not only the [respondents] but some other co-employees as well, which included three (3) other District Managers."

The facts of the case at bar show that after Christian’s suspension was lifted, he was given a new assignment. Christian requested for a transfer which was not granted. Thereafter, Christian received a new ENTE containing the charges similar to the ones for which he was already exonerated. Moreover, [petitioners] failed to explain why they did not act on Christian’s application for sick leave and instead gave him another ENTE. The events that thereafter transpired lead to the conclusion that Christian’s continued employment with [petitioner MSD] has become unbearable.1awwphi1It is settled that constructive dismissal exists when an act of clear discrimination, insensibility or disdain on the part of the employer has become so unbearable as to leave an employee with no choice but to forego continued employment.

Indeed it is settled that "the objection to the transfer being grounded on solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer." A scrutiny of the facts of the case at bar, however,

shows that the transfer of Christian reeks with bad faith as to consider his case one of constructive dismissal. Under the law, Christian has to be reinstated to his former position with full backwages from the time he was dismissed up to his actual reinstatement.15

We are in accord with the appellate court’s ruling that respondent Cristobal was constructively dismissed by MSD.

Time and again we have ruled that in constructive dismissal cases, the employer has the burden of proving that the transfer of an employee is for just and valid grounds, such as genuine business necessity.16 The employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank or a diminution of salary and other benefits. If the employer fails to overcome this burden of proof, the employee’s transfer is tantamount to unlawful constructive dismissal.

Our holding in Westmont Pharmaceuticals, Inc. v. Samaniego17 is instructive, to wit:

Westmont and Unilab failed to discharge this burden. Samaniego was unceremoniously transferred from Isabela to Metro Manila. We hold that such transfer is economically and emotionally burdensome on his part. He was constrained to maintain two residences – one for himself in Metro Manila, and the other for his family in Tuguegarao City, Cagayan. Worse, immediately after his transfer to Metro Manila, he was placed "on floating status" and was demoted in rank, performing functions no longer supervisory in nature.

There may also be constructive dismissal if an act of clear insensibility or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. This was what happened to Samaniego. x x x.18

As with Westmont and Unilab in the cited case, MSD failed to discharge the required burden of proof. The following circumstances negate MSD’s claim that, on the whole, the transfer of Cristobal was done in good faith and based on just and valid grounds:

1. Although MSD was unable to prove the initial charge against Cristobal, the threat of an investigation remained like a Damocles sword looming over him. Eventually, Cristobal’s preventive suspension was lifted, and he was reassigned subsequently to a different district. In the meantime, Cristobal was again asked to explain a similar charge of dishonesty and acting against the interest of MSD, likewise based on an expense report supported by a receipt from Lorna Food Services. We note that MSD claims that it commissioned an investigation agency to ascertain the veracity of some reports of employees’ fraudulent transactions. The second charge against Cristobal was ostensibly based on an expense report for a different date. However, this expense report was likewise supported by a receipt issued by Lorna Food Services, which should have been within the knowledge of MSD. And as the first charge did not stick, the second, yet identical, charge of dishonesty--coupled with a very far reassignment-- undoubtedly, created an oppressive atmosphere for Cristobal.

2. Cristobal’s request for reassignment was not acted upon and was, ultimately, denied. In fact, no business reason whatsoever was stated in the electronic mail to justify the necessity of transferring Cristobal. Curiously, the list of district assignments in 2003 and 2004 submitted by MSD in evidence clearly shows that only Cristobal was reassigned, and to a station infinitely distant from where he lived. To make matters worse, upon denial of

the request for transfer, Cristobal was ordered to report for work in the new assignment the very next day. This clearly demonstrates an insensitivity to the welfare of Cristobal and his family given that he lives in Marikina and was now required to report immediately for work in the Baguio and San Fernando areas.

3. Lastly, MSD did not give any reason why Cristobal’s request for a five-day sick leave was denied.

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 94265 is AFFIRMED. Petitioner Merck Sharp and Dohme (Philippines) is ordered to REINSTATE respondent Christian Aldrin S. Cristobal and to pay him full backwages. No costs.

SO ORDERED.

G.R. No. 177114               April 13, 2010

MANOLO A. PEÑAFLOR, Petitioner, vs.OUTDOOR CLOTHING MANUFACTURING CORPORATION, NATHANIEL T. SYFU, President, MEDYLENE M. DEMOGENA, Finance Manager, and PAUL LEE, Chairman, Respondents.

R E S O L U T I O N

BRION, J.:

In our Decision of January 21, 2010, we granted petitioner Manolo Peñaflor’s (Peñaflor) petition for review on certiorari and reversed the Court of Appeals (CA) decision of December 29, 2006 and resolution of March 14, 2007. We found that Peñaflor had been constructively dismissed from his employment with respondent Outdoor Clothing Manufacturing Corporation (Outdoor Clothing). Outdoor Clothing now seeks a reconsideration of this ruling.

FACTUAL BACKGROUND

Peñaflor was hired as probationary HRD Manager of Outdoor Clothing on September 2, 1999. On March 13, 2000, more than six months from the time he was hired, Peñaflor learned that Outdoor Clothing’s President, Nathaniel Syfu (Syfu), appointed Edwin Buenaobra (Buenaobra) as the concurrent HRD and Accounting Manager. After enduring what he claimed as discriminatory treatment at work, Peñaflor considered the appointment of Buenaobra to his position as the last straw, and thus filed his irrevocable resignation from Outdoor Clothing effective at the close of office hours on March 15, 2000. He thereafter filed an illegal dismissal complaint with the labor arbiter claiming that he had been constructively dismissed. The labor arbiter agreed with Peñaflor and issued a decision in his favor on August 15, 2001.

On appeal, the National Labor Relations Commission (NLRC) reversed the labor arbiter’s ruling in its September 24, 2002 decision. When Peñaflor questioned the NLRC’s decision before the CA, the

appellate court affirmed the NLRC’s decision. Hence, Peñaflor filed a petition for review on certiorari with the Court.

The Court’s January 21, 2010 Decision

Our January 21, 2010 decision focused on resolving the issue of whether Peñaflor’s resignation from Outdoor Clothing was voluntary or a forced one, the latter making it a constructive dismissal equivalent to an illegal dismissal. We found it crucial to determine whether Peñaflor filed his resignation letter before or after the appointment of Buenaobra as concurrent HRD and Accounting Manager. If the resignation was submitted before Syfu’s appointment of Buenaobra, little support would exist for Peñaflor’s allegation of constructive dismissal, as the appointment would merely be intended to cover the vacancy created by Peñaflor’s resignation. If however the resignation was made after the appointment of Buenaobra, then factual basis exists to consider Peñaflor as constructively dismissed by Outdoor Clothing, as the resignation would be a response to the unacceptable appointment of another person to a position he still occupied.

Peñaflor claimed that he filed his undated resignation letter on the very same date he made his resignation effective – March 15, 2000. On the other hand, Outdoor Clothing contended that the letter was submitted on March 1, 2000. In support of this allegation, Outdoor Clothing presented three memoranda:

a. the March 1, 2000 memorandum from Syfu to Buenaobra appointing the latter as the concurrent HRD and Accounting Manager;

b. the March 3, 2000 memorandum from Buenaobra to Syfu accepting the appointment; and

c. the March 10, 2000 office memorandum from Syfu informing all concerned of Buenaobra’s new appointment.

Our analysis of the records led us to conclude that Peñaflor submitted his resignation on March 15, 2000 as a response to the appointment of Buenaobra to his post.

We considered suspicious Outdoor Clothing’s above memoranda because these were only presented to the NLRC on appeal, but not before the labor arbiter. They were not even mentioned in Outdoor Clothing’s position paper filed with the labor arbiter. The failure to present them and to justify this failure are significant considering that these are clinching pieces of evidence that allowed the NLRC to justify the reversal of the labor arbiter’s decision.

The surrounding circumstances of the issuance of these memoranda also cast doubts on their authenticity. Although the memoranda directly concerned Peñaflor, he was never informed of their contents nor given copies. While the March 10, 2000 memorandum bore signatures of its recipients, there were no marks on the March 1 and 3, 2000 memoranda indicating that their intended recipients actually received them on the date they were issued. It was likewise strange that Peñaflor’s resignation and Buenaobra’s appointment would be kept under wraps from the supposed filing of Peñaflor’s resignation letter on March 1, 2000 up to Syfu’s issuance of the March 10, 2000 office memorandum, since the turnover of responsibilities and work load alone to a successor in a small company such as Outdoor Clothing would have prevented the resignation from being kept a secret.

We also considered the timeliness of Peñaflor’s resignation. It was highly unlikely for Peñaflor to resign on March 1, 2000, as claimed by Outdoor Corporation, considering that he would have become a regular employee by that time. It did not appear logical that an employee would tender his resignation on the very same day he was entitled by law to be considered a regular employee, especially when downsizing was taking place and he could have availed of its benefits if separated from the services as a regular employee.

Considering the above circumstances, and applying basic labor law principles, the Court ruled that Peñaflor was constructively dismissed from his employment with Outdoor Clothing. We thus reversed the CA’s decision and resolution and reinstated the decision of the labor arbiter which found the respondents (Outdoor Clothing and its corporate officers) jointly and severally liable to pay Peñaflor backwages, illegally deducted salaries, proportionate 13th month pay, attorney’s fees, moral and exemplary damages.

THE MOTION FOR RECONSIDERATION

Outdoor Clothing now moves for the reconsideration of the Court’s January 21, 2010 Decision. It alleges that the Court erred in declaring that Peñaflor was constructively dismissed from his employment despite his submission of an "irrevocable resignation" letter. It also claims that the Court erred in holding all the respondents jointly and severally liable to pay Peñaflor the salaries and damages awarded in his favor.

Outdoor Clothing maintains that Peñaflor’s resignation was voluntary; Peñaflor resigned because he wanted to disassociate himself from a company that was experiencing severe financial difficulty and to focus on his teaching job. Indeed, Peñaflor’s own letter stating his decision to irrevocably resign from his employment with Outdoor Clothing was a clear indication that he was not forced to leave the company.

Outdoor Clothing also relies heavily on the three memoranda it presented before the NLRC to support its claim of Peñaflor’s voluntary resignation. Although belatedly filed, Outdoor Clothing claims there is nothing in the rules which disallows the filing of new documents before the NLRC. "Submission of additional documents, albeit belatedly done, should always be looked upon with liberality especially when the same was important for any factual determination of the case."1

Since it was Peñaflor who filed the resignation letter, Outdoor Clothing posits that the burden of proving that the resignation was involuntary rests on Peñaflor. The evidence presented by Peñaflor simply failed to overcome this burden and thus, his resignation should be deemed voluntary and should absolve Outdoor Clothing of any liability for illegal dismissal.

Additionally, Outdoor Clothing asserts that the Court erred in reinstating the labor arbiter’s decision which ordered all the respondents jointly and severally liable for the sums due to Peñaflor. There was nothing in the decision of the Court or even those of the CA and the administrative bodies finding Outdoor Clothing’s corporate officers Syfu, Medylene Demogena (Demogena), and Paul Lee (Lee) to have personally acted in bad faith or with malice with respect to Peñaflor’s resignation. Assuming Outdoor Clothing is indeed liable to Peñaflor for illegal dismissal, it would be legally out of line to consider its corporate officers solidarily liable with the company without a finding of bad faith or malice on their part.

THE COURT’S RULING

Other than the issue of solidary liability of the respondents in the present case, Outdoor Clothing raises no new matter that would merit a reconsideration of the Court’s January 21, 2010 Decision.

Peñaflor’s resignation letter read:

Mr. Nathaniel Y. SyfuChief Corporate OfficerOutdoor Clothing Manufacturing Corporation

Sir:

Please accept my irrevocable resignation effective at the close of office on March 15, 2000.

Thank you.

Very truly yours,

Manolo A. Peñaflor2

While the letter states that Peñaflor’s resignation was irrevocable, it does not necessarily signify that it was also voluntarily executed. Precisely because of the attendant hostile and discriminatory working environment, Peñaflor decided to permanently sever his ties with Outdoor Clothing. This falls squarely within the concept of constructive dismissal that jurisprudence defines, among others, as involuntarily resignation due to the harsh, hostile, and unfavorable conditions set by the employer. It arises when a clear discrimination, insensibility, or disdain by an employer exists and has become unbearable to the employee.3 The gauge for constructive dismissal is whether a reasonable person in the employee’s position would feel compelled to give up his employment under the prevailing circumstances.4 With the appointment of Buenaobra to the position he then still occupied, Peñaflor felt that he was being eased out and this perception made him decide to leave the company.

The fact of filing a resignation letter alone does not shift the burden of proving that the employee’s dismissal was for a just and valid cause from the employer to the employee. In Mora v. Avesco,5 we ruled that should the employer interpose the defense of resignation, it is still incumbent upon the employer to prove that the employee voluntarily resigned. To our mind, Outdoor Clothing did not discharge this burden by belatedly presenting the three memoranda it relied on. If these memoranda were authentic, they would have shown that Peñaflor’s resignation preceded the appointment of Buenaobra. Thus, they would be evidence supporting the claim of voluntariness of Peñaflor’s resignation and should have been presented early on in the case – any lawyer or layman by simple logic can be expected to know this. Outdoor Clothing however raised them only before the NLRC when they had lost the case before the labor arbiter and now conveniently attributes the failure to do so to its former counsel. Outddor Clothing’s belated explanation as expressed in its motion for reconsideration, to our mind, is a submission we cannot accept for serious consideration. We find it significant that Peñaflor attacked the belated presentation of these memoranda in his Answer to Outdoor Clothing’s Memoranda of Appeal with the NLRC, but records do not show that Outdoor Clothing ever satisfactorily countered Peñaflor’s arguments. It was not until we pointed out Outdoor Clothing’s failure to explain its belated presentation of the memoranda in our January 21, 2010 decision that Outdoor Clothing offered a justification.1avvphi1

Whatever doubts that remain in our minds on the credibility of the parties’ evidence should, by the law’s dictate, be settled in favor of the working man. Our ruling that Peñaflor was constructively dismissed from his employment with Outdoor Clothing therefore stands.

We modify, however, our ruling on the extent of liability of Outdoor Clothing and its co-respondents. A corporation, as a juridical entity, may act only through its directors, officers and employees. Obligations incurred as a result of the directors’ and officers’ acts as corporate agents, are not their personal liability but the direct responsibility of the corporation they represent. As a rule, they are only solidarily liable with the corporation for the illegal termination of services of employees if they acted with malice or bad faith. In the present case, malice or bad faith on the part of the Syfu, Demogena, and Lee, as corporate officers of Outdoor Clothing, was not sufficiently proven to justify a ruling holding them solidarily liable with Outdoor Clothing.6

WHEREFORE, we PARTIALLY GRANT respondents’ motion for reconsideration and MODIFY our Decision dated January 21, 2010. Respondent Outdoor Clothing is hereby ordered to pay petitioner the following:

a. backwages computed from the time of constructive dismissal up to the time of the finality of the Court’s Resolution;

b. separation pay, due to the strained relations between the parties, equivalent to the petitioner’s one month’s salary;

c. illegally deducted salary for six days, as computed by the labor arbiter;

d. proportionate 13th month pay;

e. attorney’s fees, moral and exemplary damages in the amount of P100,000.00; and

f. costs against the respondent corporation.

SO ORDERED.

G.R. No. 163091               October 6, 2010

COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner, vs.ANGEL U. DEL VILLAR, Respondent.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

Petitioner Coca-Cola Bottlers Philippines, Inc. (the Company) filed this Petition for Review on Certiorari, under Rule 45 of the Rules of Court, seeking the reversal of (1) the Decision1 dated

October 30, 2003 of the Court of Appeals in CA-G.R. SP No. 53815, which reversed and set aside the Decision2 dated February 26, 1999 of the National Labor Relations Commission (NLRC) in NLRC CN. NCR-00-12-07634-96; and (2) the Resolution3 dated March 29, 2004 of the appellate court in the same case, which denied for lack of merit the Motion for Reconsideration of the Company.

The antecedent facts are as follows:

The Company, one of the leading and largest manufacturers of beverages in the country, initially hired respondent Angel U. del Villar (Del Villar) on May 1, 1990 as Physical Distribution Fleet Manager with a job grade of S-7 and monthly salary of P50,000.00, aside from the use of a company car, gasoline allowance, and annual foreign travel, among other benefits. In 1992, as part of the reorganization of the Company, Del Villar became the Transportation Services Manager, under the Business Logistic Directorate, headed by Director Edgardo I. San Juan (San Juan). As Transportation Services Manager, Del Villar prepares the budget for the vehicles of the Company nationwide.

While serving as Transportation Services Manager, Del Villar submitted a Report dated January 4, 1996 to the Company President, Natale J. Di Cosmo (Di Cosmo), detailing an alleged fraudulent scheme undertaken by certain Company officials in conspiracy with local truck manufacturers, overpricing the trucks purchased by the Company by as much as P70,000.00 each. In the same Report, Del Villar implicated San Juan and Jose L. Pineda, Jr. (Pineda), among other Company officials, as part of the conspiracy. Pineda then served as the Executive Assistant in the Business Logistic Directorate in charge of the Refrigeration Services of the Company.

In 1996, the Company embarked on a reorganization of the Business Logistic Directorate. As a result, the functions related to Refrigeration were assigned to the Transportation Services Manager, which was renamed the Transportation and Refrigeration Services Manager. Mr. Nathaniel L. Evangelista, the Physical Distribution Superintendent of the Zamboanga Plant, was appointed the Corporate Transportation and Refrigeration Services Manager, replacing both Del Villar and Pineda, who were in charge of the Transportation Services and Refrigeration Services of the Company, respectively. Pineda was then appointed as the Corporate Purchasing and Materials Control Manager, while Del Villar as Pineda’s Staff Assistant. These new appointments took effect on May 1, 1996.4

On July 8, 1996, seven months after the submission of his Report on the fraudulent scheme of several company officials, Del Villar received a Memorandum5 from San Juan. Through said Memorandum, San Juan informed Del Villar that (1) Del Villar was designated as Staff Assistant to the Corporate Purchasing and Materials Control Manager, with a job grade of NS-VII; (2) with Del Villar’s new assignment, he ceased to be entitled to the benefits accruing to an S-7 position under existing company rules and policies; and (3) Del Villar was to turn over the vehicle assigned to him as Transportation Services Manager to Pineda by July 10, 1996.

Although as the Staff Assistant of the Corporate Purchasing and Materials Control Manager, Del Villar continued to receive the same salary as Transportation Services Manager, but his car and other privileges were withdrawn and he spent his time at his new post sitting "at a desk with no meaningful work whatsoever."6 Del Villar believed that he was demoted by the Company to force him to resign. Unable to endure any further the harassment, Del Villar filed with the Arbitration Branch of the NLRC on November 11, 1996 a complaint against the Company for illegal demotion and forfeiture of company privileges. Del Villar also impleaded in his complaint Company President

Di Cosmo, Vice-President and General Manager Jaime G. Oracion (Oracion), Senior Vice-President and Human Resources Director Rosa Maria Chua (Chua), San Juan, and Pineda. The complaint was docketed as NLRC CN. NCR-00-12-07634-96, assigned to Labor Arbiter Felipe Pati.

The Company failed to appear, despite due notice, at the scheduled preliminary conference before the NLRC Arbitration Branch.

Del Villar filed his Position Paper, supported by his Complaint Affidavit.

The Company filed a Motion to Dismiss, instead of a position paper, praying for the dismissal of Del Villar’s complaint on the ground that Del Villar had no cause of action. The Company reasoned that in appointing Del Villar as the Staff Assistant of the Corporate Purchasing and Materials Control Manager, from his former position as Transportation Services Manager, the Company was merely exercising its inherent management prerogative to transfer an employee from one position to another. The Company also contended that Del Villar had no vested right to the privileges he previously enjoyed as Transportation Services Manager. In an Order dated July 24, 1997, the Labor Arbiter deferred action on the Motion to Dismiss until after submission by the Company of its Position Paper within 15 days from receipt of said order.

The Company filed on October 13, 1997 a Manifestation in which it stated that it was adopting its Motion to Dismiss as its Position Paper.

Thereafter, NLRC CN. NCR-00-12-07634-96 was submitted for resolution.

On March 3, 1998, the Labor Arbiter rendered a Decision in Del Villar’s favor. The Labor Arbiter held that the allegations in Del Villar’s complaint sufficiently presented a cause of action against the Company. The Company, in filing a Motion to Dismiss, hypothetically admitted the truth of the facts alleged in the complaint, and the failure of the Company to deny or rebut Del Villar’s allegations of bad faith on the part of the Company, gave rise to the presumption against the latter.

The Labor Arbiter proceeded to rule:

The issue as to whether or not [the Company] acted illegally in demoting [Del Villar] is, therefore, answered in the affirmative.

This office is inclined to believe and so holds that the reorganization of [the Company] appears to have been done sans the necessary requisite of good faith, after [Del Villar] had filed his complaint to the company President detailing the scam involving the purchase of the truck fleet of 1996.

[Del Villar] was not outrightly dismissed; instead, he was removed from his former position as Transportation Services Manager, and demoted to Staff Assistant to the Corporate Purchasing and Materials Control Manager. Furthermore, as "Staff Assistant" [Del Villar] allegedly receives his usual salary but his car privileges, gasoline allowances, and foreign travel were withdrawn and he now sits at a desk "with no meaningful work whatsoever."

[Del Villar] appears to have been singled out or discriminated upon due to his having reported the 1996 truck scam, and his present isolation can be seen as a punishment for acting in a righteous and forthright manner. Otherwise, as a "Staff Assistant" [Del Villar] should have been given some meaningful or responsible work appurtenant to the job designation.

x x x x

This Office finds and so holds that in all the foregoing rulings, the concept of management prerogative is limited or otherwise qualified. Procedurally and substantively, [the Company] through its named officers appears to have acted illegally and in bad faith in its purported "reorganization", in demoting [Del Villar] and in removing [Del Villar’s] company privileges.

Had [Del Villar] resigned under the circumstances, he could be said to have been constructively discharged because a constructive discharge is defined as "a quitting because continued employment is rendered impossible, unreasonable and unlikely, as an offer involving demotion in rank and a diminution in pay". (Philippine Japan Active Carbon Corporation and Tukuichi Satofuka vs. NLRC, G.R. 83239, Mar. 1989).7

For demoting Del Villar without justifiable cause, the Labor Arbiter ruled that the Company was liable for the following:

As a consequence of [the Company’s] acts [Del Villar] suffered the effects of humiliation, a besmirched repurtation, serious anxiety and sleepless nights which justify an award of moral damages.

In order to serve as an example to other companies who may be so inclined as to emulate [the Company’s] act of punishing their employee’s honesty and sense of fair play, [the Company] must per force be assessed exemplary damages.

In order to protect and vindicate his rights under the Labor Code, [Del Villar] was constrained to retain counsel for which [the Company] should be assessed attorney’s fees of not less than ten percent (10%) of the awarded sum.

In the matter of the unlawful withdrawal of [Del Villar’s] car, gasoline allowance and foreign travel by [the Company], it is obligated to rectify the withdrawal of privileges by returning to [Del Villar] the said Toyota car, and if that is not possible, its value as of the time said car was withdrawn including the value of the gasoline allowance and foreign travel due him.8

In the end, the Labor Arbiter decreed:

WHEREFORE, premises considered judgment is hereby rendered against [the Company and the impleaded Company officials] and in favor of [Del Villar] ordering [the Company] to (1) reinstate [Del Villar] to his former job level; (2) to return the car to [Del Villar] or to compensate [Del Villar] for the loss of his privileges such as the value of the Toyota car as of the time of taking including the value of the gasoline allowance and the foreign travel due [Del Villar]; (3) indemnify [Del Villar] moral damages of P1,000,000.00 Pesos and exemplary damages ofP1,000,000.00 Pesos, aside from attorney’s fees of 10% of sums herein awarded.9

The Company expectedly appealed to the NLRC.

While the case was still pending appeal before the NLRC, Del Villar received a letter dated April 28, 1998, signed by one Virgilio B. Jimeno for the Company, which read:

Dear Mr. Del Villar:

Presently, the Company is implementing various programs to ensure the accomplishment of its corporate goals and objectives, and to increase the productivity of its workforce.

Since the various programs will affect some of its employees, the Company has initiated a special program called "Project New Start". This program is intended to assist employees whose positions will be declared redundant with the implementation of new distribution systems, utilization of improved operational processes and functional re-organizations.

Your position has been determined as no longer necessary due to the reorganization of the Business Logistics Directorate. The Transportation and Refrigeration Services Department of the Technical Operations Directorate has absorbed your function and our efforts to transfer you to a similar position within the organization have not been successful. Thus, you are considered separated from [the Company] effective May 31, 1998.

Thank you for your kind understanding. We wish you success and God’s blessings in all your future undertakings.10

In a Decision dated February 26, 1999, the NLRC reversed the Labor Arbiter, reasoning that:

Contrary to the Labor Arbiter’s pronouncement that [the Company] should have rebutted allegations of bad faith and malice, we are more inclined to apply the presumption of good faith. Mere conclusions of fact and law should not be used as bases for an automatic finding of bad faith. As it is, we do not even see any disclosure of the scam and his alleged demotion. If indeed the so-called "great grandmother of Coca cola scams of 1996" were true, the logical consequence of such disclosure is for the president of the company to dismiss the erring employees and officers for their highly irregular acts and not to penalize [Del Villar] for making such disclosure. This is amply supported by the fact that the [the Company] conducted a thorough investigation of the reported scam and even obtained the services of an independent auditor to determine whether the alleged anomalous transactions were actually irregular and/or questionable. This manifests that [Del Villar’s] disclosure was taken seriously contrary to his claims of discrimination. Accordingly, it cannot be said that the act of the [Company] was retaliatory or penal in nature nor tainted with bad faith and/or malice. Otherwise, [the Company] would not have given grave attention to the disclosure of [Del Villar].

On the issue of whether there was a demotion, we are of the view that it was improper to conclude that [Del Villar’s] movement from the position of Transportation Services Manager to Staff Assistant to the Corporate Purchasing and Materials Control Manager necessarily indicated a demotion. The records show that there was no diminution of salary. While it appears that his transportation benefits were withheld, it does not follow that his position as Staff Assistant is inferior to that of a Transportation Services Manager. We take notice of the fact that certain positions in a company involve traveling from one place to another, hence the necessity to provide for a car, and related benefits like allowances for gasoline and maintenance. A company cannot, however, be reasonably expected to provide the same benefits to an employee whose position for example, requires that he stays in the office during working hours. Benefits, privileges and perquisites that attach to a certain position do not provide sufficient bases for determining the superiority or inferiority of the position so held.11

Hence, the NLRC concluded:

In fine We find that [Del Villar] was not demoted and that the [Company] has not acted in bad faith or with malice.

WHEREFORE, in view of the foregoing, the Decision dated March 3, 1998 rendered by Labor Arbiter Felipe R. Pati is hereby REVERSED and SET ASIDE and a new one rendered DISMISSING the complaint for lack of merit.12

Del Villar moved for the reconsideration of the foregoing NLRC Decision, but the NLRC denied such motion for lack of merit in a Resolution dated April 26, 1999.13

Unsatisfied, Del Villar brought his case before the Court of Appeals via a Petition for Certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No. 53815.

On October 30, 2003, the Court of Appeals promulgated its Decision favoring Del Villar. According to the Court of Appeals, the NLRC committed grave abuse of discretion by turning a blind eye on several indicia that clearly showed Del Villar was demoted without any lawful reason: (1) the very nomenclature used by the Company designating Del Villar’s new job: from Transportation Services Manager, Del Villar was suddenly designated as staff assistant to another manager; (2) the diminution in the benefits being enjoyed by Del Villar prior to his transfer, such as the use of the company car, gasoline allowance, and annual foreign travel; and (3) Del Villar’s new post in the Company did not require him to perform any meaningful work, a far cry from his previous responsibilities as Transportation Services Manager which include the preparation of the budget of the Company for all of its vehicles nationwide.

The Court of Appeals also made a finding of bad faith against the Company:

It is true that Labor Arbiters cannot dictate business owners on how to run their enterprises. Concededly, employers and their managers have all the leeway to make the necessary adjustments in their organizations. But the prerogative is not absolute. It must be accompanied by good faith. x x x.

x x x x

We have reasonable ground to believe that the reorganization theory poised by [the Company] was a mere afterthought. If indeed [Del Villar] was a casualty of a valid reorganization, officials of [the Company] could have easily told him in the several memos they issued to [Del Villar]. Edgardo San Juan, in a memo dated April 29, 1996, merely informed [Del Villar] the name of his replacement as Transportation Services Manager (Rollo, p. 53). In his second memo dated May 8, 1996, San Juan informed [Del Villar] that he would be "under the direct supervision of Mr. Jose L. Pineda, Jr. until an assignment, if any, would have been determined" for [Del Villar].

Two (2) subsequent memos were received by [Del Villar] but still no hint on the reason behind his relief. Rosa Marie Chua, in a memo dated June 11, 1996, simply ordered [Del Villar] to return the company car (Rollo, p. 56). Again, Chua sent a memo dated June 17, 1996, telling [Del Villar] that the car was part of "perquisites" of a Transportation Services Manager and must be returned as he was already relieved of his position (Rollo, 56).

In all four (4) memos, officials of [the Company] never once attributed to company reorganization as the reason behind [Del Villar’s] relief as Transportation Services Manager. Instead, [the Company]

waited for [Del Villar] to file a complaint before it declared publicly its reason for relieving him from his post.

It is unfortunate enough for [the Company] to give San Juan, the very person charged by [Del Villar] of committing fraud against the company, the free hand to deal with his accuser. And whatever remains of [the Company’s] tattered claim to good faith towards [Del Villar] evaporated by its absence of forthrightness to the latter. [The Company’s] lack of candor clearly lends support to a conclusion that [Del Villar’s] relief was occasioned by a reason alien to an alleged company reorganization. The evidence presented by [Del Villar] tend to show that he was demoted, not because of company reorganization, but because of his authorship of the report about the fraud being committed by certain officials of [the Company].14

Just like the Labor Arbiter, the Court of Appeals held the Company liable for the following but in reduced amounts:

Albeit We are inclined to reinstate the decision dated March 3, 1998 of the Labor Arbiter, We feel, however, that the amount of moral and exemplary damages thereunder awarded to [Del Villar] to the tune of P1 million each was excessive. To Our mind, the liability of [the Company] is mitigated when it continued providing [Del Villar] despite his demotion with the salary he was receiving as Transportation Services Manager. The moral and exemplary damages should thus be reduced to the reasonable amount of P500,000.00, for each item.15

The dispositive portion of the assailed Decision of the appellate court stated:

WHER[E]FORE, the instant petition is hereby GRANTED. Accordingly, the assailed Decision dated February 26, 1999 and Resolution dated April 26, 1999 of the National Labor Relations Commission are hereby SET ASIDE. Subject to the modification reducing to P500,000.00 the amount of moral damages and to P500,000.00 the amount of exemplary damages, the decision dated March 3, 1998 of the Labor Arbiter is hereby REINSTATED.16

Del Villar filed on November 20, 2003 a Motion for Partial Reconsideration of the above-mentioned decision of the appellate court, praying for the award of backwages to be reckoned from May 31, 1998, the day he had been dropped from the payroll. The Company also moved for the reconsideration of the same judgment, asserting, among other arguments, that Del Villar’s Petition for Certiorari in CA-G.R. SP No. 53815, was filed out of time and should have been dismissed.

In its Resolution dated March 29, 2004, the Court of Appeals denied the Motions for Reconsideration of both parties for lack of merit.17

In this Petition for Review, the Company raises three grounds for consideration of this Court:

A. THE HONORABLE COURT OF APPEALS GAVE DUE COURSE TO THE PETITION DESPITE THE FACT THAT IT WAS CLEARLY FILED BEYOND THE REGLEMENTARY PERIOD PRESCRIBED BY LAW.

B. THE HONORABLE COURT OF APPEALS GAVE DUE COURSE TO THE [Court of Appeals] PETITION DESPITE THE FACT THAT [Del Villar] FAILED TO ESTABLISH THAT THE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION IN RENDERING THE 26 FEBRUARY 1999 DECISION AND 26 APRIL 1999 RESOLUTION.

C. THE HONORABLE COURT OF APPEALS EFFECTIVELY DIRECTED [Del Villar’s] REINSTATEMENT TO HIS FORMER JOB LEVEL DESPITE ITS IMPOSSIBILITY SINCE HE HAD ALREADY BEEN VALIDLY SEPARATED FROM SERVICE.18

The Company avers that the Court of Appeals erred in giving due course to Del Villar’s Petition for Certiorari in CA-G.R. SP No. 53815 as the said remedy was filed out of time. Rule 65, Section 4 of the Rules of Court, as amended by Supreme Court Circular No. 39-98 on September 1, 1998, provided:

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 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. (Emphases ours.)

The Company points out that Del Villar received a copy of the NLRC Decision dated February 26, 1999 on March 17, 1999. Twelve days later, on March 29, 1999, Del Villar filed a Motion for Reconsideration, thus, interrupting the 60-day reglementary period for filing a petition for certiorari. The NLRC denied Del Villar’s Motion for Reconsideration in a Resolution dated April 26, 1999, a copy of which Del Villar received on May 21, 1999. From May 21, 1999, Del Villar only had 48 days more, or until July 8, 1999, within which to file his petition for certiorari; but he only did so 60 days later, on July 20, 1999. Clearly, Del Villar’s Petition for Certiorari in CA-G.R. SP No. 53815 was filed 12 days late and way beyond the reglementary period as provided under the Rules of Court.

We do not agree.

While CA-G.R. SP No. 53815 was pending before the Court of Appeals, Section 4 of Rule 65 of the Rules of Court was amended anew by Supreme Court Circular No. 56-2000, which took effect on September 1, 2000, to read:

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. (Emphases ours.)

It is clear that under Supreme Court Circular No. 56-2000, in case a motion for reconsideration of the judgment, order, or resolution sought to be assailed has been filed, the 60-day period to file a petition for certiorari shall be computed from notice of the denial of such motion.

The crucial question now is whether Supreme Court Circular No. 56-2000 should be applied retroactively to Del Villar’s Petition in CA-G.R. SP No. 53815.

We answer affirmatively. As we explained in Perez v. Hermano19:

Under this amendment, the 60-day period within which to file the petition starts to run from receipt of notice of the denial of the motion for reconsideration, if one is filed.

In Narzoles v. National Labor Relations Commission [G.R. No. 141959, 29 September 2000, 341 SCRA 533-538], we described this latest amendment as curative in nature as it remedied the confusion brought about by Circular No. 39-98 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." Curative statutes, which 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, by their very essence, are retroactive and, being a procedural rule, we held in Sps. Ma. Carmen and Victor Javellana v. Hon. Presiding Judge Benito Legarda(G.R. No. 139067, 23 November 2004] that "procedural laws are construed to be applicable to actions pending and undetermined at the time of their passage, and are deemed retroactive in that sense and to that extent."20

In the instant case, Del Villar filed a Motion for Reconsideration of the NLRC Decision dated February 26, 1999. Del Villar received a copy of the NLRC Resolution dated April 26, 1999, denying his Motion for Reconsideration, on May 21, 1999. As already settled by jurisprudence, Del Villar had a fresh period of 60 days from May 21, 1999 within which to file his Petition for Certiorari before the Court of Appeals. Keeping in mind the rule that in computing a period, the first day shall be excluded and the last day included,21 exactly 60 days had elapsed from May 21, 1999 when Del Villar filed his Petition with the appellate court on July 20, 1999. Hence, without a doubt, Del Villar’s Petition for Certiorari in CA-G.R. SP No. 53815 was seasonably filed.

We now turn our attention to the merits of the case.

The Company asserts that the Court of Appeals should not have issued a writ of certiorari in Del Villar’s favor as there was no grave abuse of discretion on the part of the NLRC in finding that Del Villar was not demoted and that the Company had not acted in bad faith or with malice.

The issue of whether the Company, in transferring Del Villar from the position of Transportation Services Manager to Staff Assistant to the Corporate Purchasing and Materials Control Manager, validly exercised its management prerogative or committed constructive dismissal, is a factual matter. It is a settled rule that factual findings of labor officials, who are deemed to have acquired

expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality. Moreover, in a petition for review on certiorari under Rule 45 of the Rules of Court, the Supreme Court reviews only errors of law and not errors of facts. However, where there is divergence in the findings and conclusions of the NLRC, on the one hand, from those of the Labor Arbiter and the Court of Appeals, on the other, the Court is constrained to examine the evidence,22 to determine which findings and conclusion are more conformable with the evidentiary facts. Hence, in the instant Petition, we embark on addressing not only the legal, but the factual issues as well.

Jurisprudence recognizes the exercise of management prerogative. For this reason, courts often decline to interfere in legitimate business decisions of employers. In fact, labor laws discourage interference in employers’ judgment concerning the conduct of their business.23

In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another – provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them.24

Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.25 In the case of Blue Dairy Corporation v. National Labor Relations Commission,26 we described in more detail the limitations on the right of management to transfer employees:

But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.27

In the case at bar, there is no dispute that Del Villar was transferred by the Company from the position of Transportation Services Manager to the position of Staff Assistant to the Corporate Purchasing and Materials Control Manager. The burden thus falls upon the Company to prove that Del Villar’s transfer was not tantamount to constructive dismissal. After a careful scrutiny of the records, we agree with the Labor Arbiter and the Court of Appeals that the Company failed to discharge this burden of proof.

The Company and its officials attempt to justify the transfer of Del Villar by alleging his unsatisfactory performance as Transportation Services Manager. In its Petition, the Company disclosed that:

4.1. As Transportation Services Manager, [Del Villar] displayed an utterly woeful performance. He was unable to submit basic data as to type and brand of vehicles with highest/lowest maintenance cost as requested. [Del Villar] could not even update the records of his office. He never complied with his commitments on submission of reports and his claims of the availability of such reports were never substantiated.

4.2. [Del Villar] could not work with minimum or no supervision. His activities needed to be closely and constantly monitored by his superiors. [Del Villar] lacked initiative and had to be constantly reminded of what to do. The work he performed and/or submitted, more often than not, had to be redone. In his Performance and Potential Evaluation Sheet for 1995, [Del Villar] merited a mediocre grade of 2 in a scale of one (1) to five (5), the latter number being the highest grade. Copies of the Affidavit of Edgardo I. San Juan ["San Juan"], the Company’s then Business Logistic Director, and respondent’s Performance and Potential Evaluation Sheet for 1995 are attached as Annexes "B" and "C", respectively.28

San Juan averred in his Affidavit that Del Villar was inept and incompetent as Transportation Services Manager; and was even more unqualified to take over the new position of Transportation and Refrigeration Services Manager, which involved additional functions related to Refrigeration. It was for this reason that Del Villar was transferred to the position of Staff Assistant to the Corporate Purchasing and Materials Control Manager.

In his Counter-Affidavit submitted before the NLRC, Pineda, the Corporate Purchasing and Materials Control Manager, claimed that:

3. As his evaluation would show, Mr. del Villar was not a well-motivated employee. He could not perform his job well and promptly with minimum or no supervision and follow-up from his superiors. He repeatedly failed to observe the deadlines which I set for the submission of his reports and often procrastinates. His work product likewise suffered from accuracy and thoroughness. Despite several admonitions and guidance from me as his immediate superior, he simply refused to change his work attitude.29

We are unconvinced. The dismal performance evaluations of Del Villar were prepared by San Juan and Pineda after Del Villar already implicated his two superiors in his Report dated January 4, 1996 in an alleged fraudulent scheme against the Company. More importantly, we give weight to the following instances establishing that Del Villar was not merely transferred from the position of Transportation Services Manager to the position of Staff Assistant to the Corporate Purchasing and Materials Control Manager; he was evidently demoted.

A transfer is a movement from one position to another which is of equivalent rank, level or salary, without break in service. Promotion, on the other hand, is the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary. Conversely, demotion involves a situation where an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in salary.30

First, as the Court of Appeals observed, Del Villar’s demotion is readily apparent in his new designation. Formerly, he was the Transportation Services Manager; then he was made a Staff Assistant – a subordinate – to another manager, particularly, the Corporate Purchasing and Materials Control Manager.

Second, the two posts are not of the same weight in terms of duties and responsibilities. Del Villar’s position as Transportation Services Manager involved a high degree of responsibility, he being in charge of preparing the budget for all of the vehicles of the Company nationwide. As Staff Assistant of the Corporate Purchasing and Materials Control Manager, Del Villar contended that he was not assigned any meaningful work at all. The Company utterly failed to rebut Del Villar’s contention. It did not even present, at the very least, the job description of such a Staff Assistant. The change in the nature of work resulted in a degrading work condition and reduction of duties and responsibility constitute a demotion in rank. In Globe Telecom, Inc. v. Florendo-Flores,31 we found that there was a demotion in rank even when the respondent therein continued to enjoy the rank of a supervisor, but her function was reduced to a mere house-to-house or direct sales agent.

Third, while Del Villar’s transfer did not result in the reduction of his salary, there was a diminution in his benefits. The Company admits that as Staff Assistant of the Corporate Purchasing and Materials Control Manager, Del Villar could no longer enjoy the use of a company car, gasoline allowance, and annual foreign travel, which Del Villar previously enjoyed as Transportation Services Manager.

Fourth, it was not bad enough that Del Villar was demoted, but he was even placed by the Company under the control and supervision of Pineda as the latter’s Staff Assistant. To recall, Pineda was one of the Company officials who Del Villar accused of defrauding the Company in his Report dated January 4, 1996. It is not too difficult to imagine that the working relations between Del Villar, the accuser, and Pineda, the accused, had been strained and hostile. The situation would be more oppressive for Del Villar because of his subordinate position vis-à-vis Pineda.

Fifth, all the foregoing caused Del Villar inconvenience and prejudice, so unbearable for him that he was constrained to seek remedy from the NLRC. The Labor Arbiter was correct in his observation that had Del Villar resigned immediately after his "transfer," he could be said to have been constructively dismissed. There is constructive dismissal when there is a demotion in rank and/or diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.32

Eventually, however, the Company actually terminated Del Villar’s services effective May 31, 1998, as his position was no longer necessary or was considered redundant due to the reorganization of the Business Logistic Directorate.

Redundancy is one of the authorized causes for the dismissal of an employee. It is governed by Article 283 of the Labor Code, which reads:

ART. 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or

financial reverses, the separation pay shall be equivalent to one (1) month pay or to at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

Redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.33

The determination that the employee's services are no longer necessary or sustainable and, therefore, properly terminable for being redundant is an exercise of business judgment of the employer. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC, provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. In other words, it is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees.34

We mentioned in Panlilio v. National Labor Relations Commission35 that an employer may proffer "new staffing pattern, feasibility studies/proposal, on the viability of the newly created positions, job description and the approval by the management of the restructuring" as evidence of redundancy. We further explained in AMA Computer College Inc. v. Garcia36 what constitutes substantial evidence of redundancy:

ACC attempted to establish its streamlining program by presenting its new table of organization. ACC also submitted a certification by its Human Resources Supervisor, Ma. Jazmin Reginaldo, that the functions and duties of many rank and file employees, including the positions of Garcia and Balla as Library Aide and Guidance Assistant, respectively, are now being performed by the supervisory employees. These, however, do not satisfy the requirement of substantial evidence that a reasonable mind might accept as adequate to support a conclusion. As they are, they are grossly inadequate and mainly self-serving. More compelling evidence would have been a comparison of the old and new staffing patterns, a description of the abolished and newly created positions, and proof of the set business targets and failure to attain the same which necessitated the reorganization or streamlining.37 (Emphases ours.)

In this case, other than its own bare and self-serving allegation that Del Villar’s position as Staff Assistant of Corporate Purchasing and Materials Control Manager had already become redundant, no other evidence was presented by the Company. Neither did the Company present proof that it had complied with the procedural requirement in Article 283 of prior notice to the Department of Labor and Employment (DOLE) of the termination of Del Villar’s employment due to redundancy one month prior to May 31, 1998. The notice to the DOLE would have afforded the labor department the opportunity to look into and verify whether there is truth as to the claim of the Company that Del Villar’s position had become redundant "with the implementation of new distribution systems, utilization of improved operational processes, and functional reorganization" of the Company. Compliance with the required notices would have also established that the Company abolished Del Villar’s position in good faith.38

Del Villar’s poor employee performance is irrelevant as regards the issue on redundancy.1avvphi1 Redundancy arises because there is no more need for the employee’s

position in relation to the whole business organization, and not because the employee unsatisfactorily performed the duties and responsibilities required by his position.39

There being no authorized cause for the termination of Del Villar’s employment, then he was illegally dismissed.

An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service.40 Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement but if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. We note that Del Villar’s reinstatement is no longer possible because the position he previously occupied no longer exists, per San Juan’s Affidavit dated October 15, 1998.41 Also, Del Villar had already received his separation pay sometime in October 1998.42

Because of his unjustified dismissal, we likewise award in Del Villar’s favor moral and exemplary damages. Award of moral and exemplary damages for an illegally dismissed employee is proper where the employee had been harrassed and arbitrarily terminated by the employer. Moral damages may be awarded to compensate one for diverse injuries such as mental anguish, besmirched reputation, wounded feelings, and social humiliation occasioned by the employer’s unreasonable dismissal of the employee. We have consistently accorded the working class a right to recover damages for unjust dismissals tainted with bad faith; where the motive of the employer in dismissing the employee is far from noble. The award of such damages is based not on the Labor Code but on Article 220 of the Civil Code.43 These damages, however, are not intended to enrich the illegally dismissed employee, such that, after deliberations, we find the amount of P100,000.00 for moral damages andP50,000.00 for exemplary damages sufficient to assuage the sufferings experienced by Del Villar and by way of example or correction for the public good.

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The Decision dated October 30, 2003 and Resolution dated March 29, 2004 of the Court of Appeals in CA-G.R. SP No. 53815 are herebyAFFIRMED with the following MODIFICATIONS: 1) the amount of backwages shall be computed from the date of Del Villar’s illegal dismissal until the finality of this judgment; and 2) the amount of moral and exemplary damages are reduced to P100,000.00 and P50,000.00, respectively. For this purpose, the case is hereby REMANDED to the Labor Arbiter for the computation of the amounts due Angel U. del Villar.

SO ORDERED.

G.R. No. 182086               November 24, 2010

BEBINA G. SALVALOZA, representing her late husband, GREGORIO SALVALOZA, Petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, GULF PACIFIC SECURITY AGENCY, INC., and ANGEL QUIZON, Respondents.

D E C I S I O N

NACHURA, J.:

This is a petition for review on certiorari1 under Rule 45 of the Rules of Court, assailing the Decision2 dated September 28, 2007 and the Resolution3 dated March 13, 2008 of the Court of Appeals (CA) in CA G.R. SP No. 96101.

The relevant facts and proceedings follow—

On March 6, 2002, petitioner Gregorio G. Salvaloza4 (Gregorio) filed a complaint5 against respondent Gulf Pacific Security Agency, Inc. (Gulf Pacific) for illegal dismissal with claim for underpayment of wages, non-payment of overtime pay, holiday pay, premium pay for holiday and rest day, service incentive leave pay, 13th month pay, damages, and attorney’s fees before the National Labor Relations Commission (NLRC), National Capital Region. The case was docketed as NLRC NCR Case No. 03-01551-2002.

In his position paper,6 Gregorio alleged that, in August 1996, he was employed by Gulf Pacific as a security guard, working from 7:00 a.m. to 7:00 p.m., Mondays to Sundays, receiving a monthly salary of P4,000.00. He stated that he was assigned to several establishments, working continuously for almost five (5) years until his alleged termination in August 2001. According to him, he reported daily to Gulf Pacific, waiting for his new assignment, but he was not given any because there was no position available for him. His last visit to Gulf Pacific’s office was in February 2002, but still no assignment was given to him.

In their position paper,7 Gulf Pacific and private respondent Angel Quizon (Quizon), the owner and manager of the agency, denied Gregorio’s allegations and countered that he had been relieved several times from his assignments for various reasons or had been on Absence Without Leave (AWOL), as shown by a summary of his service record8 below—

DATE PLACE OF ASSIGNMENT

REMARKS

07/29/96 Shakey’s food chain Relieved on August 1, 1996 due to poor performance

08/03/96 Zeus Cargo Forwarders

Relieved on October 22, 1996 due to poor performance.

10/22/96 to 04/13/97

Floating status; did not show up to ask for possible assignment

04/14/97 MS Metal Machineries Relieved on 08/18/97 due to expired requirements

08/19/97 Skyline Garments Relieved 04/02/98 per client’s request

04/06/98 IGC Construction AWOL from 05/10/98 to 01/03/99 (8 months); reported on 01/04/99 for a possible assignment

01/04/99 Viva Primero Relieved on 03/01/99 upon client’s request

03/01/99 Venson Farm Relieved on 07/13/99 due to body pains

07/14/99 to 05/02/01

Floating status; clients would not accept him due to old age and poor performance record

05/03/01 to 06/04/01

ABC Lumber

06/05/01 Anfran Realty Relieved on 08/29/01 due to habitual SOD violation and old age

08/30/01 Floating status

The service record also indicated that, per Gulf Pacific’s records, Gregorio had three (3) birthdates – (a) SSS records – November 10, 1944; (b) Office of the Civil Registrar – November 10, 1948; and (c) Security Guard License – November 10, 1951.

They claimed that, in January 2002, Gregorio wanted to be posted, but was told by Gulf Pacific to first renew and update his license as a security guard. Instead of reporting back to work, Gregorio filed his complaint9 on March 6, 2002.

On July 10, 2002, both parties filed their respective replies.

On one hand, Gregorio contended that he was given only a monthly salary of P4,000.00, way below the rate prescribed by the Philippine Association of Detective and Protective Agency Operators (PADPAO), which wasP13,000.00 to P14,000.00 per month. Gregorio claimed that the failure to renew a security license was merely an afterthought on the part of Gulf Pacific in order to put a semblance of legality on his constructive dismissal.10

On the other hand, Gulf Pacific and Quizon argued that Gregorio had been paid in accordance with the contract rate for security guard services prescribed by PADPAO in its Memorandum Circular No. 1, Series of 2001, dated December 12, 2001,11 i.e., computing the equivalent number of days in one (1) year at P391.50, inclusive of ordinary days, legal holidays, Sundays, rest days, and special holidays. They further maintained that Gregorio was not illegally dismissed, but was only placed on floating status due to his failure to comply with the Memorandum dated August 2, 2001,12 requiring him to complete the requirements for his 201 file. They pointed out that Gregorio even submitted a spurious security guard license, as rebutted by the Certification dated June 13, 2002,13 issued by the Security Agencies and Guards Supervision Division of the Philippine National Police (PNP), to the effect that Gregorio was not included in the master list of registered private security guards.14

In his rejoinder,15 Gregorio stated that he did not go on AWOL, since he was permitted to go on leave by his operations manager. He denied submitting a fake license. He said it had been the practice of Gulf Pacific for many years to renew the licenses of its security guards, with the expenses incurred for the license renewal deducted from their salaries. While he admitted signing some of the payroll sheets of Gulf Pacific, he claimed that the amounts indicated therein were not fully received by him. He further said that he was directed to sign the payroll sheets despite non-receipt of his full salaries; otherwise, he would not receive any.

In their rejoinder,16 Gulf Pacific and Quizon denied that it was the obligation of the agency to renew the license of any of its security guards, but, rather, it was the security guards’ personal responsibility, Gregorio not exempted. They reiterated that Gregorio submitted to them a spurious license.

On June 30, 2004, the Labor Arbiter (LA) rendered a decision17 in favor of Gregorio, disposing as follows—

WHEREFORE, responsive to the foregoing, judgment is hereby rendered finding respondents guilty of illegal dismissal and are therefore, ordered jointly and severally liable:

1. To reinstate complainant to his former or substantially equivalent position without loss of seniority rights, benefits and privileges;

2. To pay complainant the amount of P258,355.41, representing his backwages from the time of his dismissal up to the promulgation of this decision;

3. To pay the aggregate amount of P149,996.75 representing service incentive leave pay, 13th month pay and wage differential;

4. To pay the equivalent amount of ten (10%) percent of the total judgment award, as and for attorney’s fees;

5. Other claims are hereby dismissed for lack of sufficient merit.

SO ORDERED.18

Aggrieved, Gulf Pacific and Quizon appealed to the NLRC.

On November 30, 2005, the NLRC Second Division promulgated its decision19 reversing the LA decision, and dismissing Gregorio’s complaint for lack of merit.

Consequently, Gregorio filed a Motion for Reconsideration20 of the November 30, 2005 NLRC Second Division Decision, which was denied in the resolution dated February 28, 2006.21

Gregorio then filed a petition for certiorari22 before the CA, assailing the NLRC Second Division’s reversal of the LA decision. Gulf Pacific and Quizon filed their Comment/Opposition.23

On September 28, 2007, the CA rendered its Decision dismissing Gregorio’s petition, thereby affirming the NLRC Second Division decision and resolution. A motion for reconsideration of the CA Decision was then filed.

During the pendency of the motion for reconsideration, Gregorio’s counsel filed on December 28, 2007 a motion for substitution, alleging that Gregorio died on August 24, 2007 of Acute Myocardial Infarction, and that the Certificate of Death was made available only on December 27, 2007. The motion for substitution prayed that Gregorio be substituted by his wife, Bebina.

In the Resolution dated March 13, 2008, the CA denied the motion for reconsideration. Hence, this petition, raising the following issues—

I

WHETHER THE HONORABLE COURT OF APPEALS COMMITTED MANIFEST ERROR IN HOLDING THAT PETITIONER WAS NOT ILLEGALLY DISMISSED, THUS, TOTALLY DISREGARDING THE EVIDENCE ON RECORD, IN VIOLATION OF THE LABOR CODE[,] AS AMENDED[,] AND THE REVISED RULES OF EVIDENCE.

II

THE DECISION OF THE HONORABLE COURT OF APPEALS IS PREMISED ON A GRAVE MISAPPREHENSION OF FACT, WHEN IT HELD THAT THE RESPONDENT SECURITY AGENCY DIRECTED IN WRITING THE PETITIONER TO RENEW HIS SECURITY GUARD LICENSE AND THAT THE LATTER FAILED TO COMPLY DESPITE CONSTANT REMINDERS TO DO SO. SAID ALLEGED FACTS ARE MERE CONCLUSIONS MANIFESTLY NOT IN ACCORD WITH THE EVIDENCE ON RECORD.24

The petition filed on behalf of Gregorio alleges that, in termination cases, the burden of proving just cause for dismissing an employee is on the employer. It contends that Gulf Pacific and Quizon failed to discharge this burden when they claimed that Gregorio’s employment was severed for his failure to renew his security guard license, for his alleged inefficiency at work, and for his submission of a spurious security guard license.

It is further argued that the Memorandum dated August 2, 2001, requiring Gregorio to complete the requirements in his 201 file does not suffice as proof that he was directed to renew his security guard license, as nowhere in the said document can be found an express statement to that effect. It is claimed that, as a matter of practice, it was Gulf Pacific that renews the licenses of its security guards, and then deducts the cost from their salaries. Gregorio was allegedly misled with respect to his lack of license when he was placed on "floating status" for an indefinite period of time. According to the petition, all the documents for Gregorio’s 201 file, i.e., clearances and certifications, were already in the possession of Gulf Pacific, and it could have been easy for the latter to just renew his license. It is claimed that the alleged lack of a license was just a ploy to terminate him from employment. With respect to Gregorio’s salaries, it is alleged that there were no other evidence submitted by Gulf Pacific and Quizon, except for the payroll sheets, which, although Gregorio signed, did not reflect the amounts actually received by him.

It is settled that, in labor cases, the employer has the burden of proving that the employee was not dismissed, or, if dismissed, that the dismissal was not illegal. Failure to discharge this burden would be tantamount to an unjustified and illegal dismissal.25

The relevant provisions of Republic Act (R.A.) No. 5487 (The Private Security Agency Law)26 stipulate—

Section 6. License Necessary. – No person shall engage in the business of, or act either as a private detective, or detective agency; and either engage in the occupation, calling or employment of watchman or in the business of watchman’s agency without first having obtained the necessary permit from the Chief, Philippine Constabulary27which permit as approved is prerequisite in obtaining a license or license certificate: x x x.

x x x x

Section 9. Employees Need Not be Licensed. – Every person operating, managing, directing or conducting a licensed private detective or watchmen agency shall also be considered a licensed private detective, or watchman and no person shall be employed or used in a private detective work unless he be a licensed private detective or watchman: Provided, That nothing in this section shall be construed as requiring detective license for persons employed solely for clerical or manual work.28

From the foregoing provisions, it is clear that a license is required before one can act or work as a security guard.

On this note, contrary to the posture of Gregorio, we hold that a security guard has the personal responsibility to obtain his license. Notwithstanding the practice of some security agencies to procure the licenses of their security guards for a fee, it remains the personal obligation of a security guard to ensure that he or she has a valid and subsisting license to be qualified and available for an assignment. Thus, when Gregorio was given the Memorandum dated August 2, 2001, directing him to complete his 201 file requirements, it meant that he had to submit each and every document to show his qualifications to work as a security guard, most important of which is his security guard license. Thus, his excuse that he was not informed that he already had an expired license and had to renew the same cannot be sustained. He should have known when his license was to expire. When he received the Memorandum, Gregorio did not even bother to verify what requirement he was supposed to complete or submit, whether it was indeed the license and/or some other document. Neither was it shown that he ever complied with this directive.

It is also observed that the date of the Memorandum reminding Gregorio to complete his 201 file requirements preceded the time when he was placed on "floating status" on August 30, 2001. The Memorandum indicated that, if on August 20, 2001, Gregorio had not yet completed his requirements, he would be relieved from his then assigned post at Anfran Realty. Per his service record, he was relieved from the said post on August 29, 2001, and he started to be on "floating status" on August 30, 2001.

However, it is likewise noted that the records of this case do not show when Gregorio’s security guard license actually expired. Notwithstanding the admission of Gregorio that his license expired, although insisting that it was Gulf Pacific’s practice to renew the licenses of its security guards for a fee, Gulf Pacific failed to specifically show when the legal impossibility of posting Gregorio for an assignment due to the latter’s lack of a valid license commenced. Even the PNP Certification dated June 13, 2002 proffered by Gulf Pacific and Quizon does not conclusively show such fact. At most, it only proves that, as of that date, Gregorio was not included in the master list of registered security guards. Thus, the validity of Gulf Pacific’s contention that it was legally impossible for it to assign Gregorio due to lack of a license may only be reckoned from that date.

We are mindful of the fact that, in cases involving security guards, most contracts for security services stipulate that the client may request the replacement of the guards assigned to it. A relief and transfer order in itself does not sever the employment relationship between a security guard and the agency. It is true that a security guard has the right to security of tenure, but this does not give him a vested right to the position as would deprive the company of its prerogative to change the assignment of or transfer the security guard to a station where his services would be most beneficial to the client. Indeed, an employer has the right to transfer or assign its employees from one office or area of operation to another, or in pursuit of its legitimate business interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the transfer is not motivated by discrimination or bad faith, or effected as a form of punishment or demotion without sufficient cause.29

Temporary "off-detail" or "floating status" is the period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one. It takes place when the security agency’s clients decide not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it even for want of cause, such that the replaced security guard may be placed on temporary "off-detail" if there are no available posts under the agency’s existing contracts. During such time, the security guard does not receive any salary or any financial assistance provided by law. It does not constitute a dismissal, as the assignments primarily depend on the contracts entered into by the security agencies with third parties, so long as such status does not continue beyond a reasonable time. When such a "floating status" lasts for more than six (6) months, the employee may be considered to have been constructively dismissed.301avvphi1

There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice except to forego continued employment. It exists when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely, as an offer involving a demotion in rank and a diminution in pay.31

Based on the foregoing circumstances and the applicable law and jurisprudence, we now address the question of whether Gregorio was constructively dismissed by Gulf Pacific. We answer in the affirmative.

It should be pointed out that, per his service record, Gregorio was thrice put on "floating status" by Gulf Pacific: (1) from October 22, 1996 to April 13, 1997, or a total of 174 days, or six (6) days less than six (6) months; (2) from July 14, 1999 to May 2, 2001, or a total of almost 22 months; and (3) indefinitely, starting from August 30, 2001.

Of the three instances when Gregorio was temporarily "off-detailed," we find that the last two already ripened into constructive dismissal. While we acknowledge that Gregorio’s service record shows that his performance as a security guard was below par, we join the LA in his finding that Gulf Pacific never issued any memo citing him for the alleged repeated errors, inefficiency, and poor performance while on duty, and instead continued to assign him to various posts. This amounts to condonation by Gulf Pacific of whatever infractions Gregorio may have committed. Even assuming the reasons behind Gregorio’s being relieved as indicated in his service record to be true, it was incumbent upon Gulf Pacific to be vigilant in its compliance with labor laws. Although we understand that it could have been difficult for Gulf Pacific to post Gregorio given his age, about 50 years old, and his service record, still the agency should not have allowed him to wait indefinitely for an assignment if its clients were in truth less likely to accept him. If, indeed, Gregorio was undesirable as an employee, Gulf Pacific could just have dismissed him for cause. The unreasonable lengths of time that Gregorio was not posted inevitably resulted in his being constructively dismissed from employment.

However, with respect to Gregorio’s "off-detail" starting from August 30, 2001, we hold that it should only be counted up to June 13, 2002, and not up to the promulgation of the decision of the LA, considering that, on that date, it was legally impossible for Gulf Pacific to deploy him for lack of a valid security guard license.

With respect to the alleged underpayment of wages and benefits, suffice it to state that Gulf Pacific was able to rebut this claim through its payroll sheets correspondingly signed by Gregorio. As the payroll sheets provide a convincing proof of payment of his salaries and other benefits during his tours of duty as a security guard, the burden of proof was shifted to Gregorio to prove otherwise, but only with respect to those salaries and benefits indicated in the said payroll sheets.

On the LA’s ruling ordering Gregorio’s reinstatement, we differ. Gregorio’s position paper did not pray for reinstatement, but only sought payment of money claims. Likewise, we consider the strained relations between the parties which make reinstatement impracticable.32 What is more, even during the time of the LA’s decision, reinstatement was no longer legally feasible since Gregorio was past the age qualification for a security guard license, taking into account his three (3) different birthdates, as appearing in his service record. Section 533 of R.A. 5487, enumerating the qualifications for a security guard, provides, among others, that the person should not be less than 21 nor over 50 years of age. And as previously mentioned, as early as June 13, 2002, Gregorio was no longer in possession of a valid license. Thus, separation pay should be paid instead of reinstatement.

Finally, private respondent Quizon, manager of Gulf Pacific, should be excepted from paying Gregorio’s money entitlements inasmuch as Gregorio’s employer, Gulf Pacific, is a corporation with a separate and distinct legal personality.34

This case should therefore be remanded to the LA for the proper computation of the judgment award in favor of Gregorio.

WHEREFORE, the petition is PARTIALLY GRANTED. The assailed Decision dated September 28, 2007 and the Resolution dated March 13, 2008 of the Court of Appeals in CA G.R. SP No. 96101 are REVERSED and SET ASIDE. The decision of the Labor Arbiter dated June 30, 2004 is REINSTATED with the MODIFICATION that the deceased Gregorio Salvaloza, as represented by his wife Bebina G. Salvaloza, be awarded separation pay in lieu of reinstatement, and that his backwages and other monetary benefits be computed only up to June 13, 2002.

This case is remanded to the Labor Arbiter for the proper computation of the judgment award in favor of Gregorio within thirty (30) days from receipt hereof. Costs against Gulf Pacific Security Agency, Inc.

SO ORDERED.

G.R. No. 191053               November 28, 2011

MARIO B. DIMAGAN, Petitioner, vs.Dacworks United, Incorporated and/or Dean A. Cancino, Respondents.

D E C I S I O N

PERLAS-BERNABE, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure assailing the Decision1dated July 10, 2009 and the Resolution2 dated January 22, 2010 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 105771. The CA reversed and set aside the Resolutions3 of the National Labor Relations Commission (NLRC) dated May 29, 2007 and July 15, 2008 in NLRC NCR CA No. 047312-06/NLRC NCR-00-07-07590-03 finding petitioner Mario B. Dimagan to have been illegally dismissed.

Petitioner Mario B. Dimagan is a stockholder of respondent DACWORKS UNITED, INC., which is engaged in the business of installing, maintaining and repairing airconditioning systems. In July 1997, he started working for respondent company as Officer-in-Charge (OIC) for mechanical installation with a monthly salary of P8,000.00.

Sometime in 2002, petitioner was downgraded from his post as OIC to supervisor. Then, in March of the following year, he was made to work as a mere technician. When he vocally expressed his concerns regarding his assignments, one Loida Aquino, who was in charge of servicing/personnel under the direct supervision of respondent Dean A. Cancino, told him not to report for work anymore. Thereafter, a certain Carlito Diaz, Operations Manager of respondent company, castigated petitioner for not following Aquino's instruction to work as a technician. This prompted petitioner to file a complaint for illegal dismissal, non-payment of overtime pay, holiday pay, service incentive leave and separation pay against respondents.

Respondents denied that petitioner was illegally dismissed arguing that, since April 4, 2003 up to the time of the filing of the complaint, petitioner never reported for work and continuously violated the company policy on absence without official leave (AWOL). They allegedly sent a total of four (4) memoranda for the period August 2002 to March 2003 informing petitioner of his offenses, including being AWOL, but he nonetheless unjustifiably refused to return to work.

In reply, petitioner denied ever receiving any one of the four memoranda allegedly sent by respondents.

On October 28, 2005, the Labor Arbiter rendered a decision4in favor of petitioner disposing as follows:

"WHEREFORE, respondents are hereby ordered to reinstate complainant to his former position with full backwages which as of this date has amounted to P240,800.00.

All the other claims are hereby DISMISSED.

SO ORDERED."5

In holding that petitioner was illegally dismissed, the Labor Arbiter pointed out that there was no denial by respondents that they relegated petitioner from the position of OIC to supervisor and then to ordinary technician. The last assignment was meant to humiliate him and deprive him of his dignity as stockholder of the company. Moreover, the immediate filing by petitioner of the complaint for dismissal negated the defense of abandonment interposed by respondents.

On appeal, the NLRC rendered a Resolution6 dated May 29, 2007 affirming the Labor Arbiter's Decision in toto. It took note of the dearth of evidence to show that petitioner duly received the memoranda allegedly sent by respondents informing him of his suspension from work. In affirming

petitioner's constructive dismissal, the NLRC ratiocinated that he was not given overtime pay despite the fact that he frequently worked late nights because he was supposedly a managerial employee. But when respondents started treating him as a rank-and-file employee by making him work as a mere technician, such act of "clear discrimination, insensibility or disdain" became unbearable to petitioner.

Further, the NLRC clarified that the phrase "as of this date" in the decretal portion of the Decision of the Labor Arbiter signified that the computation of petitioner's backwages starts from the date when his compensation was withheld from him until the date of his actual reinstatement, as provided in Article 279 of the Labor Code.

Respondents sought reconsideration7 of the NLRC's Resolution. However, in his Comment/Opposition8 thereto, petitioner alleged that respondents "rigged, tampered, distorted and perverted" the mailing of their motion for reconsideration to make it appear that it was mailed on the last day for filing thereof, or on June 25, 2007, at the Mayamot Post Office. To prove the same, petitioner submitted a Certification9 from the postmaster of the Mayamot Post Office, Antipolo City, stating that there was no record of registered mails posted on June 25, 2007 by Atty. Gerardo B. Collado, counsel for the respondents, and addressed to the NLRC and to petitioner's counsel, Atty. Jonathan Polines.

On July 15, 2008, the NLRC issued a Resolution10 denying respondents' motion for reconsideration for lack of merit without, however, passing judgment on the allegation that respondents manipulated the filing of their motion for reconsideration. The NLRC merely directed respondents to file a comment and/or explanation within five (5) days from receipt of the aforesaid Resolution, to which the latter complied.11

Subsequently, respondents filed a petition for certiorari12under Rule 65 of the same Rules before the CA. In its challenged Decision13dated July 10, 2009, the CA reversed and set aside the Resolutions of the NLRC upon a finding that there was no dismissal of petitioner to speak of, whether actual or constructive, considering the absence of substantial evidence to prove that his services were, in fact, terminated by respondents; or that there was a demotion in rank or a diminution of his salaries, benefits and privileges

With regard to the procedural aspect, the CA held that, since the NLRC did not categorically address the issue on the alleged manipulation in the mailing of respondents' motion for reconsideration even after the required explanation was submitted by the latter, then said motion was considered as timely filed.

Aggrieved, petitioner moved14 for reconsideration of the CA Decision, but it was denied in the Resolution15 dated January 22, 2010 for lack of merit. Hence, the instant recourse on the following grounds, to wit:

"(A)

THE COURT OF APPEALS HAS FAILED IN ITS DUTY TO DETERMINE THAT RESPONDENTS HAVE FAILED TO COMPLY WITH THE REQUIREMENTS ON THE APPROPRIATE SWORN CERTIFICATION ON FORUM-SHOPPING TO BE SUBMITTED TOGETHER WITH THE PETITION FOR CERTIORARI, THAT WOULD CALL FOR THE EXERCISE BY THIS HONORABLE SUPREME COURT OF ITS POWER OF SUPERVISION.

(B)

THE COURT OF APPEALS HAS FAILED IN ITS DUTY TO DETERMINE THAT RESPONDENTS HAVE VIOLATED THE CERTIFICATION ON NON-FORUM SHOPPING, BY REFUSING AND FAILING TO DISCLOSE THE PENDING INVESTIGATION BEING CONDUCTED BY THE NLRC ON THE RESPONDENTS' MANIPULATION OF THE MAILING OF THEIR MOTION FOR RECONSIDERATION BELOW, THAT WOULD CALL FOR THE EXERCISE BY THIS HONORABLE SUPREME COURT OF ITS POWER OF SUPERVISION.

(C)

THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT PETITIONER WAS NOT ILLEGALLY DISMISSED, DESPITE THE EXISTENCE OF EVIDENCE INDICATING THE CONSTRUCTIVE DISMISSAL BY REASON OF CLEAR DISCRIMINATION, INSENSIBILITY OR DISDAIN COMMITTED BY THE EMPLOYER AGAINST THE PETITIONER."16

Before delving into the merits of the instant case, the Court shall first resolve petitioner's claim that respondents are guilty of forum shopping having failed to comply with the required form of the certification, as prescribed17 by the Rules of Court, and to disclose the pendency of an investigation being conducted by the NLRC with regard to the allegation of manipulation and/or tampering in the mailing of respondents' motion for reconsideration.

The Court is not convinced.

"Forum shopping exists when a party repetitively avails himself of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in, or already resolved adversely by, some other court."18

The elements of forum shopping are: (1) identity of parties, or at least such parties as represent the same interests in both actions; (2) identity of rights asserted and reliefs prayed for, the relief being founded on the same set of facts; and (3) the identity of the two preceding particulars, such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration.19

There was no confluence of the foregoing elements in the instant case. Records show that when respondents filed their petition for certiorari before the CA, their motion for reconsideration before the NLRC had already been resolved on the merits, and the only incident left for the NLRC to adjudicate was the alleged mail tampering of respondents. The pendency of such investigation, however, is merely incidental, such that its resolution will not amount to res judicata in the petition for certiorari before the CA. Be that as it may, the Court examined the certification on forum shopping20 attached to respondents' petition for certiorari before the CA, and found the same to have substantially complied with the requirements under the rules.

On the merits, the Court finds petitioner's arguments meritorious.

At the outset, it must be pointed out that the main issue in this case involves a question of fact. It is an established rule that the jurisdiction of the Supreme Court in cases brought before it from the CA via Rule 45 of the 1997 Rules of Civil Procedure is generally limited to reviewing errors of law. This Court is not a trier of facts. In the exercise of its power of review, the findings of fact of the CA are conclusive and binding and consequently, it is not our function to analyze or weigh evidence all over again.21

This rule, however, is not ironclad. One of the recognized exceptions is when there is a divergence between the findings of facts of the NLRC and that of the CA,22 as in this case. There is, therefore, a need to review the records to determine which of them should be preferred as more conformable to evidentiary facts.23

After a judicious scrutiny of the records, the allegations of petitioner and the defenses raised by respondents, the Court cannot sustain the finding of the CA that petitioner was not illegally or constructively dismissed.

Constructive dismissal is defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay.24The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.25

As held in the case of Coca-Cola Bottlers Philippines, Inc. vs. Del Villar,26 the burden falls upon the company to prove that the employee's assignment from one position to another was not tantamount to constructive dismissal. In the case at bar, respondents failed to discharge said burden. In fact, respondents never even disputed that petitioner was relegated from the position of OIC to supervisor and, subsequently, to an ordinary technician. Clearly, the reduction in petitioner's responsibilities and duties, particularly from supervisor to ordinary technician, constituted a demotion in rank tantamount to constructive dismissal.

Thus, contrary to the position of the CA, it is of no consequence that petitioner failed to substantiate his allegation that Loida Aquino, an employee of respondent company, informed him that he will be working as an ordinary technician, and that when he openly voiced out his concern regarding the transfer, he was told not to report for work anymore. As with all the other allegations made by petitioner, respondents never disputed or rebutted this fact.

Similarly, We cannot concur with the finding of the CA that it was petitioner who abandoned his employment by failing to report for work or having gone AWOL.1âwphi1

"Abandonment is the deliberate and unjustified refusal of an employee to resume his employment."27 To constitute abandonment of work, two elements must concur: "(1) the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act."28 The employer bears the burden of proof to show the deliberate and unjustified refusal of the employee to resume his employment without any intention of returning.29

In the case of Hodieng Concrete Products, Inc. v. Emilia30, citing Samarca v. Arc-Men Industries, Inc.31, the Court has ruled thus:

"x x x. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. And the burden of proof to show that there was unjustified refusal to go back to work rests on the employer.

x x x

Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever the employer-employee relationship. Clearly, the operative act is still the employee’s ultimate act of putting an end to his employment.

Settled is the rule that mere absence or failure to report for work is not tantamount to abandonment of work. x x x." (Emphasis supplied)

In this case, petitioner's failure to report for work was caused by the unwarranted demotion in rank that was imposed upon him by respondents, not by any intention to sever employment ties with them. And his filing of the instant complaint for illegal dismissal indubitably negates the allegation of abandonment. Had petitioner intended to forsake his job, then he would not have found it necessary to institute this case against respondents.

In sum, the CA committed reversible error when it held that petitioner was not illegally or constructively dismissed. With respect to the investigation being conducted by the NLRC regarding the alleged tampering and/or manipulation of the mailing of respondents' motion for reconsideration filed before it, the Court no longer finds it necessary to pass upon the same.

WHEREFORE, the instant petition is GRANTED. The assailed Decision and Resolution of the CA are SET ASIDE.The Resolutions of the NLRC affirming the Decision of the Labor Arbiter are REINSTATED. Petitioner is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits computed from the time his compensation was withheld from him or on April 4, 2003, up to the time of his actual reinstatement, in accordance with Article 27932 of the Labor Code.

SO ORDERED.

G.R. No. 177816               August 3, 2011

NIPPON HOUSING PHIL. INC., and/or TADASHI OTA, HOROSHI TAKADA, YUSUHIRO KAWATA, MR. NOBOYUSHI and JOEL REYES Petitioners, vs.MAIAH ANGELA LEYNES, Respondent.

D E C I S I O N

PEREZ, J.:

Assailed in this petition for review on certiorari1 filed pursuant to Rule 45 of the 1997 Rules of Civil Procedure is the 23 November 2006 Decision rendered by the Sixteenth Division of the Court of Appeals (CA) in CA-G.R. SP No. 84781,2 the decretal portion of which states:

WHEREFORE, the foregoing considered, the petition is GRANTED and the assailed Decision and Resolution are REVERSED and SET ASIDE. Accordingly, the Decision of the Labor Arbiter is REINSTATED.

SO ORDERED.3

The Facts

From its original business of providing building maintenance, it appears that petitioner Nippon Housing Philippines, Inc. (NHPI) ventured into building management, providing such services as handling of the lease of condominium units, collection of dues and compliance with government regulatory requirements. Having gained the Bay Gardens Condominium Project (the Project) of the Bay Gardens Condominium Corporation (BGCC) as its first and only building maintenance client, NHPI hired respondent Maiah Angela Leynes (Leynes) on 26 March 2001 for the position of Property Manager, with a salary of P40,000.00 per month. Tasked with surveying the requirements of the government and the client for said project, the formulation of house rules and regulations and the preparation of the annual operating and capital expenditure budget, Leynes was also responsible for the hiring and deployment of manpower, salary and position determination as well as the assignment of the schedules and responsibilities of employees.4

On 6 February 2002, Leynes had a misunderstanding with Engr. Honesto Cantuba (Cantuba), the Building Engineer assigned at the Project, regarding the extension of the latter’s working hours. Aside from instructing the security guards to bar Engr. Cantuba from entry into the Project and to tell him to report to the NHPI’s main office in Makati, Leynes also sent a letter dated 8 February 2002 by telefax to Joel Reyes (Reyes), NHPI’s Human Resources Department (HRD) Head, apprising the latter of said Building Engineer’s supposed insubordination and disrespectful conduct.5 With Engr. Cantuba’s submission of a reply in turn accusing Leynes of pride, conceit and poor managerial skills,6 Hiroshi Takada (Takada), NHPI’s Vice President, went on to issue the 12 February 2002 memorandum, attributing the incident to "simple personal differences" and directing Leynes to allow Engr. Cantuba to report back for work.7

Disappointed with the foregoing management decision, Leynes submitted to Tadashi Ota, NHPI’s President, a letter dated 12 February 2002, asking for an emergency leave of absence for the supposed purpose of coordinating with her lawyer regarding her resignation letter.8 While NHPI offered the Property Manager position to Engr. Carlos Jose on 13 February 20029 as a consequence Leynes’ signification of her intention to resign, it also appears that Leynes sent another letter to Reyes by telefax on the same day, expressing her intention to return to work on 15 February 2002 and to call off her planned resignation upon the advice of her lawyer.10 Having subsequently reported back for work and resumed performance of her assigned functions, Leynes was constrained to send out a 20 February 2002 written protest regarding the verbal information she supposedly received from Reyes that a substitute has already been hired for her position.11 On 22 February 2002, Leynes was further served by petitioner Yasuhiro Kawata and Noboyushi Hisada, NHPI’s Senior Manager and Janitorial Manager,12 with a letter and memorandum from Reyes,

relieving her from her position and directing her to report to NHPI’s main office while she was on floating status.13

Aggrieved, Leynes lost no time in filing against NHPI and its above-named officers the 22 February 2002 complaint for illegal dismissal, unpaid salaries, benefits, damages and attorney’s fees docketed before the arbitral level of the National Labor Relations Commission (NLRC) as NLRC-NCR South Sector Case No. 30-02-01119-02.14Against Leynes’ claim that her being relieved from her position without just cause and replacement by one Carlos Jose amounted to an illegal dismissal from employment,15 NHPI and its officers asserted that the management’s exercise of the prerogative to put an employee on floating status for a period not exceeding six months was justified in view of her threatened resignation from her position and BGCC’s request for her replacement.16 During the pendency of the case, however, Reyes eventually served the Department of Labor and Employment (DOLE)17and Leynes with the 8 August 2002 notice terminating her services effective 22 August 2002, on the ground of redundancy or lack of a posting commensurate to her position at the Project.18 Leynes was offered by NHPI the sum of P28,188.16 representing her unpaid wages, proportionate 13th month pay, tax refund and service incentive leave pay (SILP).

On 14 January 2003, Labor Arbiter Manuel Manansala rendered a decision, finding that NHPI’s act of putting Leynes on floating status was equivalent to termination from employment without just cause and compliance with the twin requirements of notice and hearing. Likewise finding that NHPI’s officers acted with bad faith in effecting Leynes’ termination,19 the Labor Arbiter disposed of the case in the following wise:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Declaring respondent Nippon Housing Philippines, Inc. (NHPI) guilty of illegal dismissal for the reasons above-discussed. Consequently, the aforenamed respondent is hereby directed to reinstate complainant Maiah Angela Leynes to her former position as Property Manager without loss of seniority rights and with full backwages from the time of her unjust dismissal up to the time of her actual reinstatement. The backwages due to complainant Leynes is initially computed at P471,844.87 x x x subject to the finality of this Decision.

Be that as it may, on account of strained relationship between the parties brought about by the institution of the instant case/complaint plus the fact that complainant Leynes occupied a managerial position, it is better for the parties to be separated. Thus, in lieu of reinstatement, respondent NHPI is hereby directed to pay complainant Leynes the sum of P80,000.00 representing the latter’s initial separation pay subject to the finality of this Decision x x x.

2. Declaring respondent NHPI and individual respondents Tadashi Ota (President), Hirochi Takada (Vice President for Finance), Yasuhiro Kawata (Senior Manager), Noboyushi [Hisada] (Janitorial Manager), and Joel Reyes (HRD Manager) guilty of evident bad faith in effecting the dismissal of complainant Leynes from the service. Consequently, the aforenamed respondents are hereby directed to pay, jointly and severally, complainant Leynes the sum of P20,000.00 for moral damages and the sum of P20,000.00 for exemplary damages;

3. Directing respondent NHPI to pay complainant Leynes the total sum of P56,888.44 representing her unpaid salary, proportionate 13th month pay, and proportionate service incentive leave pay x x x

4. Directing the aforenamed respondent NHPI to pay complainant Leynes ten (10%) percent attorney’s fees based on the total monetary award for having been forced to prosecute and/or litigate the instant case/complaint by hiring the services of legal counsel.

5. Dismissing the other mon[e]y claims and/or charges of complainant Leynes for lack of merit.

SO ORDERED.20

On appeal, the foregoing decision was reversed and set aside in the 30 September 2003 decision rendered by the NLRC in NLRC NCR CA No. 035229. In ordering the dismissal of the complaint for lack of merit, the NLRC ruled that NHPI’s placement of Leynes on floating status was necessitated by the client’s contractually guaranteed right to request for her relief.21 With Leynes’ elevation of the case to the CA on a Rule 65 petition for certiorari,22 the NLRC’s decision was, however, reversed and set aside in the herein assailed 23 November 2006 decision, upon the following findings and conclusions: (a) absent showing that there was a bona fide suspension of NHPI’s business operations, Leynes’ relief from her position – even though requested by the client – was tantamount to a constructive dismissal; (b) the bad faith of NHPI and its officers is evident from the hiring of Engr. Jose as Leynes’ replacement on 13 February 2002 or prior to her being relieved from her position on 22 February 2002; and, (c) the failure of NHPI and its officers to prove a just cause for Leynes’ termination, the redundancy of her services and their compliance with the requirements of due process renders them liable for illegal dismissal.23

The motion for reconsideration of the foregoing decision filed by NHPI and its officers24 was denied for lack of merit in the CA’s 8 May 2007 resolution, hence, this petition.25

The Issues

Petitioners NHPI and Kawata urge the grant of their petition on the following grounds, to wit:

I. THE HONORABLE COURT OF APPEALS’ RULING THAT PETITIONERS’ DECISION TO PLACE RESPONDENT ON FLOATING STATUS IS TANTAMOUNT TO CONSTRUCTIVE DISMISSAL IS CONTRARY TO LAW AND SETTLED JURISPRUDENCE.

II. THE HONORABLE COURT OF APPEALS’ DECLARATION THAT NHPI’S DECISION TO REDUNDATE RESPONDENT IS UNJUSTIFIED, IS CONTRARY TO LAW AND SETTLED JURISPRUDENCE.26

The Court’s Ruling

We find the petition impressed with merit.

Petitioners argue that the CA erred in finding that Leynes was constructively dismissed when she was placed on floating status prior to her termination from employment on the ground of redundancy. Maintaining that the employee’s right to security of tenure does not give him a vested right thereto as would deprive the employer of its prerogative to change his assignment or transfer him to where he will be most useful, petitioners call our attention to the supposed fact that Leynes was unacceptable to BGCC which had a contractually guaranteed right to ask for her relief. Rather

than outrightly terminating Leynes’ employment as a consequence of her threats to resign from her position, moreover, petitioners claim that she was validly placed on floating status pursuant to Article 286 of the Labor Code of the Philippines which provides as follows:

Art. 286. When employment not deemed terminated. – The bona fide suspension of the operation of a business undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a civic duty shall not terminate employment. In all such cases the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty.

Although the CA correctly found that the record is bereft of any showing that Leynes was unacceptable to BGCC, the evidence the parties adduced a quo clearly indicates that petitioners were not in bad faith when they placed the former under floating status. Disgruntled by NHPI’s countermanding of her decision to bar Engr. Cantuba from the Project, Leynes twice signified her intention to resign from her position to Ota on 12 February 2002. Upon receiving the copy of the memorandum issued for Engr. Cantuba’s return to work, Leynes inscribed thereon the following handwritten note addressed to Ota, "Good Morning! I’m sorry but I would like to report to you my plan of resigning as your Prop. Manager. Thank You."27 In her application letter for an immediate emergency leave,28Leynes also distinctly expressed her dissatisfaction over NHPI’s resolution of her dispute with Engr. Cantuba and announced her plan of coordinating with her lawyer regarding her resignation letter, to wit:

This is in line with the Management decision re: Return to work order of Mr. Honesto Cantuba at Bay Gardens. I would like to express my deepest disappointed (sic) for having received this kind of decision from Nippon Housing Philippines, Inc.

Mr. Ota, I have been working with NHPI, as your Building Property Manager, for almost a year now. I had exerted all my effort to set-up the Property Management, experienced each and every pain and sacrifice[d] everything before we were able to get the Bay Gardens project. Mr. Hiro Matsumoto, Hiroshi Takada and Yasuhiro Kawata had witnessed these things.

Given your decision, I am respecting this. The most painful thing for me is that the management did not value my effort for what I have done to the Company.

I am therefore submitting my letter for emergency leave of absence starting today, while I am still coordinating with my Lawyer re: my resignation letter.1avvphi1

Thank you for your support.29

In view of the sensitive nature of Leynes’ position and the critical stage of the Project’s business development, NHPI was constrained to relay the situation to BGCC which, in turn, requested the immediate adoption of remedial measures from Takada, including the appointment of a new Property Manager for the Project. Upon BGCC’s recommendation,30 NHPI consequently hired Engr. Jose on 13 February 2002 as Leynes’ replacement.31 Far from being the indication of bad faith the CA construed the same to be, these factual antecedents suggest that NHPI’s immediate hiring of Engr. Jose as the new Property Manager for the Project was brought about by Leynes’ own rash announcement of her intention to resign from her position. Although she subsequently changed her mind and sent Reyes a letter by telefax on 13 February 2002 announcing the reconsideration of her planned resignation and her intention to return to work on 15 February 2002,32 Leynes evidently had

only herself to blame for precipitately setting in motion the events which led to NHPI’s hiring of her own replacement.

Acting on Leynes’ 20 February 2002 letter protesting against the hiring of her replacement and reiterating her lack of intention to resign from her position,33 the record, moreover, shows that NHPI simply placed her on floating status "until such time that another project could be secured" for her.34 Traditionally invoked by security agencies when guards are temporarily sidelined from duty while waiting to be transferred or assigned to a new post or client,35 Article 286 of the Labor Code has been applied to other industries when, as a consequence of the bona fide suspension of the operation of a business or undertaking, an employer is constrained to put employees on floating status for a period not exceeding six months.36 In brushing aside respondents’ reliance on said provision to justify the act of putting Leynes on floating status, the CA ruled that no evidence was adduced to show that there was a bona fide suspension of NHPI’s business. What said court clearly overlooked, however, is the fact that NHPI had belatedly ventured into building management and, with BGCC as its only client in said undertaking, had no other Property Manager position available to Leynes.

Considering that even labor laws discourage intrusion in the employers’ judgment concerning the conduct of their business, courts often decline to interfere in their legitimate business decisions,37 absent showing of illegality, bad faith or arbitrariness. Indeed, the right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them.38 The record shows that Leynes filed the complaint for actual illegal dismissal from which the case originated on 22 February 2002 or immediately upon being placed on floating status as a consequence of NHPI’s hiring of a new Property Manager for the Project. The rule is settled, however, that "off-detailing" is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time and that it is only when such a "floating status" lasts for more than six months that the employee may be considered to have been constructively dismissed.39 A complaint for illegal dismissal filed prior to the lapse of said six-month and/or the actual dismissal of the employee is generally considered as prematurely filed.40

Viewed in the light of the foregoing factual antecedents, we find that the CA reversibly erred in holding petitioners liable for constructively dismissing Leynes from her employment. There is said to be constructive dismissal when an act of clear discrimination, insensitivity or disdain on the part of the employer has become so unbearable as to leave an employee with no choice but to forego continued employment.41 Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay.42 Stated otherwise, it is a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not.43 In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity.44 To our mind, respondents have more than amply discharged this burden with proof of the circumstances surrounding Engr. Carlos’ employment as Property Manager for the Project and the consequent unavailability of a similar position for Leynes.

With no other client aside from BGCC for the building management side of its business, we find that NHPI was acting well within its prerogatives when it eventually terminated Leynes’ services on the ground of redundancy. One of the recognized authorized causes for the termination of employment, redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise.45 A redundant position is one rendered superfluous by any number of factors, such as overhiring of workers, decreased volume of business,

dropping of a particular product line previously manufactured by the company or phasing out of service activity priorly undertaken by the business.46 It has been held that the exercise of business judgment to characterize an employee’s service as no longer necessary or sustainable is not subject to discretionary review where, as here, it is exercised there is no showing of violation of the law or arbitrariness or malice on the part of the employer.47 An employer has no legal obligation to keep more employees than are necessary for the operation of its business.48

Considering that Leynes was terminated from service upon an authorized cause, we find that the CA likewise erred in faulting NHPI for supposedly failing to notify said employee of the particular act or omission leveled against her and the ground/s for which she was dismissed from employment. Where dismissal, however, is for an authorized cause like redundancy, the employer is, instead, required to serve a written notice of termination on the worker concerned and the DOLE, at least one month from the intended date thereof.49 Here, NHPI specifically made Leynes’ termination from service effective 22 August 2002, but only informed said employee of the same on 8 August 200250 and filed with the DOLE the required Establishment Termination Report only on 16 August 2002.51For its failure to comply strictly with the 30-day minimum requirement for said notice and effectively violating Leynes’ right to due process, NHPI should be held liable to pay nominal damages in the sum of P50,000.00. The penalty should understandably be stiffer because the dismissal process was initiated by the employer's exercise of its management prerogative.52

Having been validly terminated on the ground of redundancy, Leynes is entitled to separation pay equivalent to one month salary for every year of service but not to the backwages adjudicated in her favor by the Labor Arbiter.53 Hired by NHPI on 26 March 2001 and terminated effective 22 August 2002, Leynes is entitled to a separation pay in the sum of P40,000.00, in addition to her last pay which, taking into consideration her proportionate 13th month pay, tax refund and SILP, was computed by NHPI at P28,188.16.54 For lack of showing of bad faith, malice or arbitrariness on the part of NHPI, there is, however, no justifiable ground for an award of moral and exemplary damages.55 For lack of factual or legal bases, we find no cause to award attorney’s fees in favor of Leynes. In the absence of the same showing insofar as NHPI’s corporate officers are concerned, neither is there cause to hold them jointly and severally liable for the above-discussed monetary awards.

WHEREFORE, premises considered, the petition is GRANTED and the assailed 23 November 2006 Decision is, accordingly, REVERSED and SET ASIDE. In lieu thereof, another is entered ordering NHPI to pay Leynes the following sums: (a) P40,000.00 as separation pay; (b) P28,188.16 representing her unpaid wages, proportionate 13th month pay, tax refund and SILP; and (c) P50,000.00 by way of nominal damages.

SO ORDERED.

G.R. No. 186344               February 20, 2013

LEOPARD SECURITY AND INVESTIGATION AGENCY, Petitioner, vs.TOMAS QUITOY, RAUL SABANG and DIEGO MORALES, Respondents.

D E C I S I O N

PEREZ, J.:

Is an award of separation pay proper despite lack of showing of illegal dismissal? This is the main issue- in this Rule 45 Petition for Review on Certiorari assailing the Decision1 dated 26 September 20082 rendered and the Resolution dated 21 January 20093 issued by the Twentieth Division of the Court of Appeals (CA) in CA-G.R. SP No. 03097.

The factual antecedents are not in dispute.

Alongside Numeriano Ondong, respondents Tomas Quitoy, Raul Sabang and Diego Morales were hired as security guards by petitioner Leopard Security and Investigation Agency (LSIA) which maintained its office at BCC House, 537 Shaw Boulevard, Mandaluyong City.4 All being residents of Cebu City, respondents were assigned by LSIA to the different branches of its only client in said locality, Union Bank of the Philippines (Union Bank). On 1 April 2005, it appears that Union Bank served a notice to LSIA, terminating the parties’ security service contract effective at the end of business hours of 30 April 2005.5 Thru its representative, Rogelio Morales, LSIA informed respondents on 29 April 2005 of the termination of its contract with Union Bank which had decided to change its security provider. Upon Morales’ instruction, respondents went to the Union Bank Cebu Business Park Branch on 30 April 2005, for the turnover of their service firearms to Arnel Cortes, Union Bank’s Chief Security Officer.6

On 3 May 2005, respondents and Ondong filed a complaint for illegal dismissal, unpaid 13th month pay and service incentive leave pay (SILP), moral and exemplary damages as well as attorney’s fees against LSIA, its President, Jose Poe III, Union Bank, its Regional Service and Operations Officer, Catherine Cheung, HerbertHojas, Protectors Services, Inc. (PSI) and Capt. Gerardo Jaro. With the complaint already docketed as RAB Case No. 07-05-0979-2005 before the Regional Arbitration Branch No. VII of the National Labor Relations Commission (NLRC) in Cebu City,7 it appears that LSIA sent on 10 May 2005 a notice requiring respondents to report for work to its Mandaluyong City office.8 In an Order dated 6 June 2005, Cheung and Hojas were later dropped as parties-respondents from the case upon motion of respondents. In view of Ondong’s execution of a quitclaim, on the other hand, his complaint was likewise dismissed with prejudice, resulting in the exclusion of PSI and Jaro as parties-respondents from the case.9

In support of their complaint, respondents averred that they were hired and assigned by LSIA to the different Cebu City branches of Union Bank which directly paid their salaries and whose branch managers exercised direct control and supervision over them. Required to work from 7:30 a.m. to 9:00 p.m. daily, respondents claimed that they took orders and instructions from Union Bank’s branch managers since LSIA had no administrative personnel in Cebu City. Respondents further asserted that, after introducing himself as a representative of LSIA on 29 April 2005, Morales belatedly informed them that their services would be terminated at the end of the office hours on the same business day. Directed by Morales to report to Union Bank’s Cebu Business Park Branch the next day, respondents maintained that they surrendered their service firearms to Cortes who told them that Union Bank would be engaging the services of another security agency effective the next working day. Not even reimbursed their firearm bond nor told that Union Bank had no monetary obligation to them, respondents claimed they were constrained to file their complaint and to pray that the former be held jointly and severally liable with LSIA for their claims.10

In its position paper, LSIA, on the other hand, asseverated that upon being hired, respondents opted for an assignment in Cebu City and were, accordingly, detailed at the different branches of Union Bank in said locality. Informed by Union Bank on 1 April 2005 of the termination of their security

service contract effective 30 April 2005, LSIA claimed that it relieved respondents from their assignments by the end of the business hours of the latter date. Petitioners would, on 10 May 2005, direct respondents to report for work at its Mandaluyong City office. As respondents failed to do so, LSIA alleged that it issued show cause letters on 21 June 2005, requiring the former to explain why they should not be administratively sanctioned for their unexplained absences. As the avowed direct employer of respondents, LSIA also prayed that Union Bank be dropped from the case and that the complaint be altogether dismissed for lack of merit.11 Invoking the security service contract it executed with LSIA from which its lack of an employer-employee relationship with respondents could be readily gleaned, Union Bank, in turn, asserted that the complaint should be dismissed as against it for lack of cause of action.12

On 6 April 2006, Labor Arbiter Violeta Ortiz-Bantug rendered a Decision, finding LSIA liable for the illegal dismissal of respondents. Faulting LSIA for informing respondents of the termination of their services only on 30 April 2005 despite Union Bank’s 1 April 2005 advice of the termination of its security service contract, the Labor Arbiter ruled that the 10 May 2005 report to work order did not show a sincere intention on the part of LSIA to provide respondents with other assignments. Aside from respondents’ claims for backwages, LSIA was ordered by the Labor Arbiter to pay the former’s claim for separation pay on the ground that reinstatement was no longer feasible under the circumstances. Although absolved from liability for the foregoing awards upon the finding that LSIA was an independent contractor, Union Bank was, however, held jointly and severally liable with said security agency for the payment of respondents’ claims for proportionate 13th month pay and SILP for the three years immediately preceding the institution of the case.13

On appeal, the foregoing decision was modified in the 20 March 2007 Decision rendered by the Fourth Division of the NLRC in NLRC Case No. V-000570-2006. Applying the principle that security agencies like LSIA are allowed to put security guards on temporary off-detail or floating status for a period not exceeding six months, the NLRC discounted the factual and legal bases for the illegal dismissal determined by the Labor Arbiter as well as the backwages awarded in favor of respondents. Finding that the filing of the complaint on 3 May 2005 was premature, the NLRC took note of the fact that respondents did not even protest against the report to work order issued by LSIA. Even then, the NLRC upheld the Labor Arbiter’s award of separation pay on the theory that reinstatement was no longer viable. The awards of proportionate 13th month pay and SILP for which Union Bank and LSIA were held solidarily liable were likewise sustained for failure of the latter to discharge the burden of proving payment of said labor standard benefits.14 Belatedly submitting documents to prove its payment of SILP, LSIA filed a motion for reconsideration of the foregoing decision15 which was, however, denied for lack of merit in the NLRC’s 23 July 2007 Resolution.16

Dissatisfied, LSIA filed the Rule 65 Petition for Certiorari docketed before the CA as CA-G.R. SP No. 03097. Calling attention to the impropriety of the award of separation pay absent a finding of illegal dismissal, LSIA also faulted the NLRC for ignoring the evidence it submitted alongside its motion for reconsideration to prove the payment of respondents’ SILP for the years 2003, 2004 and 2005.17 On 26 September 2008, the then Twentieth Division of the CA rendered the herein assailed decision, affirming the NLRC’s 23 July 2007 Decision and denying LSIA’s petition for lack of merit. Applying the principle that respondents could not be considered illegally dismissed before the lapse of six months from their being placed on floating status by LSIA,18 the CA justified the awards of separation pay, proportionate 13th month pay and SILP in the following wise:

In another vein, however, xxx respondents were caught off guard when Rogelio Morales, [LSIA’s] representative summarily told them not to report to Union Bank anymore. They did not understand its implications as no one bothered to explain what would happen to them. At any rate, it is clear as day that xxx respondents no longer wish to continue their employment with [LSIA] because of the

shabby treatment previously given them. Their relations have obviously turned sour. Such being the case, separation pay, in lieu of reinstatement, is proper. Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employer and the employee.

x x x x

The burden of proving payment of holiday pay and salary differentials belong to the employer, not the employee. Here [LSIA] failed to present proofs that xxx respondents received payment for [SILP] and thirteenth month pay which accrued to them under the law. As the labor arbiter ruled, however, payment of [SILP] shall only be for the last three (3) years of xxx respondents’ service taking into consideration the provisions on prescription of money claims and proportionate 13th month pay for the year 2004.19

Aggrieved by the foregoing decision as well as the CA’s 21 January 2009 denial of their motion for reconsideration thereof,20 LSIA and Poe filed the Petition for Review on Certiorari at bench, on the following grounds:

I

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT UPHELD THE NLRC DECISION AWARDING TO RESPONDENTS SEPARATION PAY DESPITE ITS FINDINGS THAT THEY WERE NOT ILLEGALLY DISMISSED.

II

THE COURT OF APPEALS ERRED WHEN IT UPHELD THE NLRC DECISION AWARDING TO RESPONDENTS SERVICE INCENTIVE LEAVE PAY FOR THE YEARS 2003, 2004 AND 2005.21

In urging the grant of their petition, LSIA and Poe argue that, upon discounting the factual basis for respondents’ claim that they were illegally dismissed from employment, the CA should have disallowed the award of separation pay awarded by the Labor Arbiter and the NLRC. They insist that like backwages, separation pay is the legal consequence of a finding of illegal dismissal and should, perforce, be deleted in the absence thereof, particularly when no evidence was adduced to prove the strained relations between the employer and employee. LSIA and Poe also fault the CA for ignoring the Bank Advice Slips and On Demand Statement of Account belatedly submitted alongside the motion for reconsideration they filed before the NLRC, to prove payment of respondents’ SILP for the years 2004 and 2005.22 In their comment to the petition, on the other hand, respondents insist that they have been illegally dismissed from employment and that the Labor Arbiter’s determination to that effect was erroneously reversed by both the NLRC and the CA.23

The petition is impressed with merit.

Applying Article 28624 of the Labor Code of the Philippines by analogy, this Court has repeatedly recognized that security guards may be temporarily sidelined by their security agency as their assignments primarily depend on the contracts entered into by the latter with third parties.25 Temporary "off-detail" or "floating status" is the period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until

they are transferred to a new one. It takes place when, as here, the security agency’s clients decide not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster.26 For as long as such temporary inactivity does not continue for a period exceeding six months, it has been ruled that placing an employee on temporary "off-detail" or "floating status" is not equivalent to dismissal.27

In the case at bench, respondents were informed on 29 April 2005 that they were going to be relieved from duty as a consequence of the 30 April 2005 expiration of the security service contract between Union Bank and LSIA. While respondents lost no time in immediately filing their complaint on 3 May 2005, the record equally shows that they were directed by LSIA to report for work at its Mandaluyong City office on 10 May 2005 or a mere ten days from the time the former were effectively sidelined. Considering that a security guard is only considered illegally dismissed from service when he is sidelined from duty for a period exceeding six months,28 we find that the CA correctly upheld the NLRC’s ruling that respondents were not illegally dismissed by LSIA. Parenthetically, said ruling is binding on respondents who did not appeal either the decision rendered by the NLRC or the CA in line with the entrenched procedural rule in this jurisdiction that a party who did not appeal cannot assign such errors as are designed to have the judgment modified.29

Having correctly ruled out illegal dismissal of respondents, the CA reversibly erred, however, when it sustained the NLRC’s award of separation pay on the ground that the parties’ relationship had already been strained. For one, liability for the payment of separation pay is a legal consequence of illegal dismissal where reinstatement is no longer viable or feasible. Under Article 279 of the Labor Code, an illegally dismissed employee is entitled to the twin reliefs of full backwages and reinstatement without loss of seniority rights.30 Aside from the instances provided under Articles 28331 and 28432 of the Labor Code, separation pay is, however, granted when reinstatement is no longer feasible because of strained relations between the employer and the employee.33 In cases of illegal dismissal, the accepted doctrine is that separation pay is available in lieu of reinstatement when the latter recourse is no longer practical or in the best interest of the parties.34

As a relief granted in lieu of reinstatement, however, it consequently goes without saying that an award of separation pay is inconsistent with a finding that there was no illegal dismissal. Standing alone, the doctrine of strained relations will not justify an award of separation pay, a relief granted in instances where the common denominator is the fact that the employee was dismissed by the employer.35 Even in cases of illegal dismissal, the doctrine of strained relations is not applied indiscriminately as to bar reinstatement, especially when the employee has not indicated an aversion to returning to work36 or does not occupy a position of trust and confidence in37 or has no say in the operation of the employer’s business.38 Although litigation may also engender a certain degree of hostility, it has likewise been ruled that the understandable strain in the parties’ relations would not necessarily rule out reinstatement which would, otherwise, become the rule rather than the exception in illegal dismissal cases.39

Our perusal of the position paper they filed a quo shows that, despite erroneously believing themselves to have been illegally dismissed, respondents had alleged no circumstance indicating the strained relations between them and LSIA and had even alternatively prayed for reinstatement alongside the payment of separation pay.40 Since application of the doctrine of strained relations presupposes a question of fact which must be demonstrated and adequately supported by evidence,41 the CA clearly erred in ruling that the parties’ relations had already soured and that an award of separation pay in favor of respondents is proper. Apprised by Union Bank on 1 April 2005 that it was no longer renewing its security service contract after 30 April 2005, LSIA may have tarried in informing respondents of the fact only on 29 April 2005. As correctly ruled by the NLRC, however,

the resultant inconvenience to respondents cannot detract from the fact that the employer-employee relationship between the parties still subsisted and had yet to be severed when respondents filed their complaint on 3 May 2005.1âwphi1

Absent illegal dismissal on the part of LSIA and abandonment of employment on the part of respondents, we find that the latter’s reinstatement without backwages is, instead, in order. In addition to respondent’s alternative prayer therefor in their position paper, reinstatement is justified by LSIA’s directive for them to report for work at its Mandaluyong City office as early of 10 May 2005. As for the error ascribed the CA for failing to correct the NLRC’s disregard of the evidence showing LSIA’s payment of respondents’ SILP, suffice it to say that the NLRC is not precluded from receiving evidence, even for the first time on appeal, because technical rules of procedure are not binding in labor cases.42 Considering that labor officials are, in fact, encouraged to use all reasonable means to ascertain the facts speedily and objectively, with little resort to technicalities of law or procedure,43 LSIA correctly faults the CA for likewise brushing aside the evidence of SILP payments it submitted during the appeal stage before the NLRC.

The record shows that respondents were uniformly awarded SILP at the rate of P666.00 for the period May 3 to December 31, 2002, P1,000.00 for the period January 1 to December 31, 2003, P1,040.00 for the period January 1 to December 31, 2004 and P347.36 for the period January 1 to May 3, 2005 or a total of P3,053.36 each.44 The Bank Advice Slips and On Demand Statement of Account45 submitted by LSIA before the NLRC shows uniform payments of SILP to respondents in the sum of P1,025 for the year 2004 which should, therefore, be deducted from the award of said benefit in favor of respondent. Although LSIA also submitted a Bank Advice Slip showing a supposed P1,065.00 payment of SILP for the year 2005 in favor of respondent Sabang only, the absence of an On Demand Statement of Account for said amount impels Us to disallow the further deduction thereof from the SILP award.

WHEREFORE, premises considered, the petition is GRANTED and the assailed Decision dated 26 September 2008 is, accordingly, MODIFIED to direct the reinstatement of respondents in lieu of the award of separation pay and to deduct the sum of P1,025.00 from the SILP individually awarded in favor of respondents. The rest isAFFIRMED.

SO ORDERED.

G.R. No. 172988               July 26, 2010

JOSE P. ARTIFICIO, Petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, RP GUARDIANS SECURITY AGENCY, INC., JUAN VICTOR K. LAURILLA, ALBERTO AGUIRRE, and ANTONIO A. ANDRES, Respondents.

D E C I S I O N

PEREZ, J.:

The instant petition for certiorari under Rule 45 seeks to set aside the Decision1 dated 31 March 2006, as well as the Resolution2 dated 1 June 2006, of the Court of Appeals in CA-G.R. SP No.

88188. The appellate court affirmed the Decision3 dated 31 August 2004 of the National Labor Relations Commission (NLRC) in NLRC NCR Case No. 00-08-05942-2002/NLRC CA No. 037809-03 finding that Petitioner Jose P. Artificio (Artificio) was not illegally dismissed and ordering respondents to reinstate Artificio to his former position without loss of seniority rights. The appellate court at the same time vacated and set aside the decision of the Labor Arbiter dated 6 October 2003, in NLRC NCR Case No. 08-05942-2002 that Artificio was illegally dismissed by the respondents.4

The pertinent facts are as follows:

Petitioner Jose P. Artificio was employed as security guard by respondent RP Guardians Security Agency, Inc., a corporation duly organized and existing under Philippine Laws and likewise duly licensed to engage in the security agency business.

Sometime in June 2002, Artificio had a heated argument with a fellow security guard, Merlino B. Edu (Edu). On 25 July 2002, Edu submitted a confidential report5 to Antonio A. Andres (Andres), Administration & Operations Manager, requesting that Artificio be investigated for maliciously machinating Edu’s hasty relief from his post and for leaving his post during night shift duty to see his girlfriend at a nearby beerhouse.

On 29 July 2002, another security guard, Gutierrez Err (Err), sent a report 6 to Andres stating that Artificio arrived at the office of RP Guardians Security Agency, Inc. on 25 June 2002, under the influence of liquor. When Artificio learned that no salaries would be given that day, he bad-mouthed the employees of RP Guardians Security Agency, Inc. and threatened to "arson" their office.

The report reads:

Sir:

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

On even date, Andres issued a Memorandum8 temporarily relieving Artificio from his post and placing him under preventive suspension pending investigation for conduct unbecoming a security guard, such as, abandonment of post during night shift duty, light threats and irregularities in the observance of proper relieving time. He also directed Artificio to report to the office of RP Guardians Security Agency, Inc. and submit his written answer immediately upon receipt of the memorandum.

In another memorandum, Andres informed Artificio that a hearing will be held on 12 August 2002.9

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

After hearing, the Labor Arbiter rendered a decision dated 6 October 2003, finding respondents guilty of illegal suspension and dismissal. It ruled that Edu’s allegation of irregularity in the observance of relieving time was not specifically detailed. Since Edu had an axe to grind against Artificio, his allegation should be taken with utmost caution. It was also held that Artificio should have been allowed to confront Edu and Err before he was preventively suspended. Since he was denied due process, his preventive suspension was illegal. Such preventive suspension ripened into illegal dismissal. The Labor Arbiter explained that:

On July 29, 2002, complainant received two (2) separate Memoranda from his employer. One Memo immediately placed him under preventive suspension effective that very day. It further directed him "to report to this Office and submit an answer in writing immediately upon receipt of this Memo x x x." Complainant received this at about 2:00 P.M., July 29, 2002.

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

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

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

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

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

As to money claims, the supporting documents submitted by the respondents prove that other than the payment of ECOLA and the refund of the P30.00 monthly Trust Fund, herein complainant had been duly paid of his money claims.11

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

WHEREFORE, in view of the foregoing, judgment is hereby rendered declaring respondents guilty of illegal suspension/lay-off and illegal dismissal.

Since the complainant does not seek reinstatement, he is entitled to limited backwages and separation pay.

Respondent [RP]. Guardian Security Agency, Inc., is hereby ordered to pay complainant as follows:

1. Limited backwages computed from July 29, 2002 up to the date of this Decision in the amount ofP217,033.79;

2. In lieu of reinstatement, separation pay equivalent to one-half (1/2) month’s salary for every year of service computed from 1986 in the amount of P81,507.60;

3. ECOLA from November 5, 2001 up to July 31, 2002, in the amount of P6,628.50[;] and

4. Refund of P30.00 monthly contribution to Trust Fund in the amount of P5,970.00;

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

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

On appeal, the NLRC, in a Decision13 dated 31 August 2004, set aside the decision of the Labor Arbiter. It ruled that the Labor Arbiter erred in considering preventive suspension as a penalty. While it is true that preventive suspension can ripen into constructive dismissal when it goes beyond the 30-day maximum period allowed by law, such is not prevailing in this case since Artificio immediately filed a complaint before the labor tribunal. It added that it was Artificio who terminated his relationship with respondents when he asked for separation pay in lieu of reinstatement although he has not yet been dismissed. The NLRC clarified further that:

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

In the end, the NLRC decreed:

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

The motion for reconsideration filed by Artificio was denied for lack of merit by the NLRC in a resolution dated 29 October 2004.16

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

I.

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

II.

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

III.

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

IV.

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

V.

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

VI.

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

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

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

Sections 8 and 9 of Rule XXIII, Implementing Book V of the Omnibus Rules Implementing the Labor Code provides:

SEC. 8. Preventive suspension. – The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers.

SEC. 9. Period of suspension. – No preventive suspension shall last longer than thirty (30) days. The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension, he pays the wages and other benefits due to the worker. In such case, the worker shall not be bound to reimburse the amount paid to him during the extension if the employer decides, after completion of the hearing, to dismiss the worker.

As succinctly stated above, preventive suspension is justified where the employee’s continued employment poses a serious and imminent threat to the life or property of the employer or of the employee’s co-workers. Without this kind of threat, preventive suspension is not proper.19

In this case, Artificio’s preventive suspension was justified since he was employed as a security guard tasked precisely to safeguard respondents’ client. His continued presence in respondents’ or its client’s premises poses a serious threat to respondents, its employees and client in light of the serious allegation of conduct unbecoming a security guard such as abandonment of post during night shift duty, light threats and irregularities in the observance of proper relieving time.

Besides, as the employer, respondent has the right to regulate, according to its discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.1avvphi1

This Court has upheld a company’s management prerogatives so long as they are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements.20

This delineation of management prerogatives is relevant to the observation of the NLRC that:

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

These observations can no longer be disturbed. They are now established facts before us.

Significantly, Artificio regrettably chose not to present his side at the administrative hearing scheduled to look into the factual issues that accompanied the accusation against him. In fact, he avoided the investigation into the charges by filing his illegal dismissal complaint ahead of the scheduled investigation. He, on his own decided that his preventive suspension was in fact illegal dismissal and that he is entitled to backwages and separation pay. Indeed, Artificio would even reject reinstatement revealing his bent to have his own way through his own means. As aptly noted by the NLRC, Artificio preempted the investigation that could have afforded him the due process of which he would then say he was denied.

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

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

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

Artificio is entitled to separation pay considering that while reinstatement is an option, Artificio himself has never, at anytime after the notice of preventive suspension intended to remain in the employ of private respondents.

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

No costs.

SO ORDERED.

G.R. No. 190559               March 7, 2012

BLUE SKY TRADING COMPANY, INC. and/or JOSE TANTIANSU and LINDA TANTIANSU, Petitioners, vs.ARLENE P. BLAS and JOSEPH D. SILVANO, Respondents.

D E C I S I O N

REYES, J.:

The Case

Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing the October 26, 2009 Decision2 and the December 14, 2009 Resolution3 of the Court of Appeals (CA) in CA G.R. SP No. 108432. The dispositive portion of the assailed decision reads:

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

SO ORDERED.4

The assailed resolution denied the petitioners' Motion for Reconsideration5 to the foregoing.

Antecedent Facts

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

On January 29, 2005, Lorna N. Manalastas (Lorna), Blue Sky's warehouse supervisor, wrote Jose a memorandum6 informing the latter that six pairs of intensifying screens were missing. Lorna likewise stated that when a certain "Boy" conducted an inventory on October 2004, the screens were still completely accounted for.

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

On February 1, 2005, Jean notified Helario of his termination from service on the ground of his failure to properly account for and maintain a balance of the company's stock inventories, hence, resulting in Blue Sky's loss of trust and confidence in him.7 The day after, Blue Sky promptly filed with the Department of Labor and Employment (DOLE) an establishment termination report8 indicating therein Helario's dismissal from service for cause.

On February 3, 2005, Jean issued notices to explain/preventive suspension9 to Arlene, Joseph, delivery personnel Jayde Tano-an (Jayde) and maintenance personnel/driver Wilfredo Fasonilao (Wilfredo). The notices informed them that they were being accused of gross dishonesty in connection with their alleged participation in and conspiracy with other employees in committing theft

against company property, specifically relative to the loss of the six intensifying screens. They were placed under preventive suspension pending investigation and were thus required to file their written explanations within 48 hours from receipt of the notices.

On February 4, 2005, Arlene submitted to Jean a handwritten memorandum denying knowledge or complicity with the theft of the intensifying screens. In part, the memorandum reads:

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

Anyway, regarding sa nawawalang IS, ang alam ko inim-ventory ni Kuya Boy yan last Oct. According to him, complete daw lahat yun. Nang bumaba si Sir Jun mga last week ng Dec. para magpalinis ng stocks, na-found out nya na kulang ang stocks. So we did, we compare the bincard to the stockcard. But tally silang pareho. Kaya, we did we trace it is sa mga possible records like shipment sa Cebu or sales. But wala doon. Ang naiisip naming dahilan ay baka nagpakabit si Ate Lorna ng cassette with IS sa technical and she forgot to report it. Yun lang ang possible reason na alam ko. At wala na akong alam pang iba. x x x10

On the other hand, Joseph proffered the following explanation:

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

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

On February 5, 2005, Jean issued to Arlene, Joseph, Jayde and Wilfredo notices of dismissal for cause13 stating therein that evidence that they had conspired with each other to commit theft against company property was too glaring to ignore. Blue Sky had lost its trust and confidence on them and as an act of self-preservation, their termination from service was in order.

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

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

Meanwhile, an entrapment operation was conducted by the police during which Jayde and Helario were caught allegedly attempting to sell to an operative an ultrasound probe worth around P400,000.00 belonging to Blue Sky. On April 22, 2005, Quezon City Inquest Prosecutor Arleen Tagaban issued a resolution15 recommending the filing in court of criminal charges against Jayde and Helario.

On May 2005, before the complaint which was filed with the NLRC can be resolved, Helario, Jayde and Wilfredo executed affidavits of desistance16 stating therein that their termination by Blue Sky was for cause and after observance of due process.

The Ruling of the Labor Arbiter

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

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

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

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

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

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

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

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

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

x x x

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

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

x x x

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

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

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

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

x x x

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

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

The Rulings of the NLRC

On November 29, 2007, the NLRC ordered the reinstatement of Arlene and Joseph and the payment to them of full backwages and ten percent attorney's fees. The decision, in part, reads:

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

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

x x x

Finally, [w]e do not see appellants as holding positions of trust and confidence. Before an employee may be dismissed due to willful breach of trust, he must hold a position of trust and confidence

(Estiva [v]s. NLRC, G.R. No. 95145, August 5, 1993). A position of trust and confidence is one where a person is entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property (Panday vs. NLRC, G.R. No. 67664, May 20, 1994) and/or funds (Gonzales vs. NLRC, 335 SCRA 197).

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

Both parties filed their motions for reconsideration20 to the foregoing.

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

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

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

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

x x x

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

x x x

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

x x x

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

Aggrieved, Arlene and Joseph filed before the CA a Petition for Certiorari22 under Rule 65 of the Rules of Court to challenge the above quoted NLRC resolution.

The Ruling of the CA

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

Resolution of the NLRC, the CA ratiocinated that:

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

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

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

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

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

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

x x x

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

However, [w]e hold that the [r]espondents failed to sufficiently establish the charge against [p]etitioners which was the basis for its loss of trust and confidence that warranted their dismissal. Concededly, it is settled that proof beyond reasonable doubt is not required in dismissing an

employee on the ground of loss of trust and confidence. It is sufficient that there is some basis for such loss of confidence or that there must be some reasonable grounds to believe, if not to entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of trust and confidence demanded by his position. However, loss of confidence as a valid cause to terminate an employee must nonetheless rest on actual breach of duty committed by the employee and not on the employer's imagined whim or caprice.

Verily, [w]e are convinced that the [r]espondents failed to adduce any substantial proof showing that the [p]etitioners committed an actual breach of their duty which destroyed the trust and confidence reposed upon them by their employer. Clearly, there is no ample evidence to show that [p]etitioners conspired with the thieves in stealing six (6) pairs of intensifying screens from [r]espondents['] warehouse. Nor is there any shred of evidence that tends to prove that the [p]etitioners had a direct hand in the larceny committed against the [r]espondents. In fact, the verity of the [p]etitioners' innocence on the thievery committed against the [r]espondents was recognized by the NLRC in the assailed Resolution, viz:

x x x

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

x x x

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

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

The Issues

The petitioners submit the following for resolution:

I.

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

II.

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

The Petitioners' Arguments

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

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

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

The Respondents' Contentions

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

This Court's Ruling

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

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

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

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

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

We rule in the negative.

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

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

http://larc.fluxfun.com/2011/11Further, in Baron v. NLRC,32 we held that for there to be a valid dismissal based on loss of trust and confidence, the breach of trust must be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse.

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

Blue Sky alleged that Arlene, who was a stock clerk, and Joseph, a warehouse helper, had free access to the missing items. Arlene, who kept the stock cards, was supposed to be monitoring on a daily basis the incoming and outgoing stocks stored in or taken out of the warehouse. Joseph took the stocks from the warehouse to the vehicles for transport or delivery purposes. Arlene and Joseph

averred otherwise. They insisted that they were mere lowly employees who did not have actual custody of company property, specifically, of the missing items. Arlene claimed that she was not responsible for conducting inventories and that she released stocks only when urgently necessary and only in the absence of those authorized to do so. Joseph alleged that he only went to the mezzanine, where the missing items were stored, when ordered to do so by his superiors.

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

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

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

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

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

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

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

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

Blue Sky committed no impropriety in imposing preventive suspension against Arlene and Joseph pending investigation of the theft allegedly committed against the company.

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

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

In Arlene and Joseph's case, Blue Sky issued to them notices to explain on February 3, 2005. They submitted their written explanation the day after and they were dismissed from service on February 5, 2005. While we do not agree with Blue Sky's subsequent decision to terminate them from service, we find no impropriety in its act of imposing preventive suspension upon the respondents since the period did not exceed the maximum imposed by law and there was a valid purpose for the same.

In lieu of reinstatement, Arlene and Joseph are entitled to an award of separation pay.

If reinstatement proves impracticable, and hardly in the best interest of the parties, perhaps due to the lapse of time since the employee’s dismissal, or if the employee decides not to be reinstated, the latter should be awarded separation pay in lieu of reinstatement.37

In the case at bar, Arlene and Joseph were dismissed from service on February 5, 2005. We find that the lapse of more than seven years already renders their reinstatement impracticable. Further,

from the stubborn stances of the parties, to wit, the petitioners' insistence that dismissal was valid on one hand, and the respondents' express prayer for the payment of separation pay on the other, we find that reinstatement would no longer be in the best interest of the contending parties.

Arlene and Joseph are entitled to the payment of ECOLA, but not to 13th month, service incentive leave and overtime pay.

It is well-settled that in labor cases, the burden of proving payment of monetary claims rests on the employer.38

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

In the resolution issued on January 30, 2009, the NLRC found proof by way of the petitioners' annex to their position paper that Arlene and Joseph already received their 13th month and service incentive leave pay for the year 2005.39 The respondents had not specifically refuted the NLRC's findings, hence, we sustain the same.

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

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

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

In the case at bar, albeit we find Arlene and Joseph's dismissal from service as illegal, we cannot attribute bad faith on the part of Blue Sky which merely acted with an intent to protect its interest. Hence, we find as lacking in basis the NLRC's award of ten percent attorney's fees in the respondents' favor.1âwphi1

Jose and Linda cannot be held solidarily liable for the dismissal of Arlene and Joseph in the absence of proof that they acted with malice and bad faith.

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

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

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

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

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

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

SO ORDERED.

G.R. No. 148766            January 22, 2003

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

PUNO, J.:

Respondent PHILIPPINE MINING SERVICE CORPORATION was established in 1980 by Japanese investors Kawatetsu Mining Co., Ltd. and Kawasaki Steel Corporation to develop dolomite deposits in Cebu. Respondent exports quality dolomite ore for use in the manufacture of steel, glass and fertilizer.

Ore undergoes the following process: first, it is extracted and loaded to respondent’s dump trucks. It then goes through a series of crushing process by heavy equipment. Thereafter, three (3) products are produced: lumpy ore, fine ore and –8 mesh. Each product is then deposited in three (3) separate stockpiles for sale.

The lumpy ore stockpile and the fine ore stockpile are adjacent to each other, separated only by a concrete dividing wall to prevent contamination or spillage from one side to the other.1 Contamination usually results during pushing or scraping of the product by a bulldozer in the ground level.2 In cases of contamination or spillage, the foreman, after his shift, accomplishes a report regarding the details thereof. Contaminated ore products are likewise segregated and stored in a separate stockpile for sale by respondent or for use in its civil works. Hence,contaminated ore is also categorized as a product of the respondent.

Petitioner JOSE V. SALVADOR was first employed by respondent in 1981. He rose from the ranks and assumed the position of Plant Inspection Foreman in 1991. He was tasked to: (1) supervise plant equipment and facility inspection; (2) confirm actual defects; (3) establish inspection standards

and frequency; (4) analyze troubles and recommend counter measures; and (5) prepare weekly/monthly inspection schedule.3

As early as March 1, 1985, respondent instituted the "shift boss" scheme whereby the foreman from the Plant Section and the foreman from the Mining Section rotate as shift boss throughout their night shift to oversee and supervise both the mining and plant operations. The shift boss was entrusted with the care, supervision and protection of the entire plant.4

Aside from his employment with respondent, petitioner co-owned and managed LHO-TAB Enterprises, with his partner Ondo Alcantara. They were engaged in the manufacture and sale of hollow blocks.5

On September 29, 1997, petitioner’s employment relation with respondent was tainted with charges of pilferage and violation of company rules and policy, resulting to loss of confidence.

Respondent’s evidence disclose that on September 29, 1997, at about 9:30 a.m., Koji Sawa, respondent’s Assistant Resident Manager for Administration, was on his way back to his office in the plant. He and his driver, Roberto Gresones, saw petitioner operating respondent’s payloader, scooping fine ore from the stockpile and loading it on his private cargo truck. As the truck was blocking the access road leading to the stockyard’s gate, Sawa’s car stopped near the stockpile and the driver blew the horn thrice. Petitioner did not hear him because of the noise emanating from his operation of the payloader. Sawa’s driver found a chance to pass through when the payloader maneuvered to get another scoop from the fine ore stockpile.

As it was contrary to respondent’s standard operating procedure for the plant foreman to operate the payloader, Sawa went to the administration office to check the delivery receipt covering the loading operation of petitioner that morning. However, sales-in-charge Eduardo Guangco was in the wharf, overseeing the loading of respondent’s product. Hence, it was only in the afternoon that Sawa was able to verify the delivery receipt covering petitioner’s loading transaction. The delivery receipt showed that it was dolomite spillage that was purchased by buyer Ondo Alcantara, not the fine ore that he saw petitioner loading on his truck. The receipt also showed it was not the respondent but Alcantara, the buyer, who was responsible for loading the spillage he purchased from the plant.

On the same day and on the basis of his initial findings, Sawa instructed Antonio Plando, Assistant Department Manager for Administration, to investigate the incident. The investigation established the following:

(1) petitioner owned the private cargo truck used by the buyer, Alcantara; petitioner, during company time, loaded the fine ore on his truck using respondent’s payloader;

(2) dolomite spillage was purchased and supposed to be picked up by Alcantara that day and not fine ore, as shown in the delivery receipt, dated September 18, 1997;

(3) it was noted on the delivery receipt that the purchase was "care of (petitioner) Salvador" which facilitated the release of the products from the compound;

(4) as the buyer, Alcantara, was supposed to pick up the dolomite spillage his company purchased, he should have provided his own manpower to manually haul the product on the private truck; petitioner should not have used respondent’s payloader; and

(5) the hauling witnessed by Sawa and his driver on said date was Alcantara’s sixth (6th) withdrawal as he has already withdrawn six (6) tons of respondent’s product on previous occasions.

In a show-cause letter,6 dated September 30, 1997, respondent formally charged petitioner with the following: (1) doing personal or unofficial work on company time using respondent’s equipment and materials; (2) defrauding the respondent by loading fine ore, instead of dolomite spillage; and (3) breach of trust and confidence reposed on him by respondent.

In reply,7 petitioner explained that, on said date and time, while he was clearing the contaminated area near the divider of the two (2) stockpiles, his private cargo truck arrived as it was supposed to withdraw two (2) tons of dolomite spillage ordered by Alcantara. Petitioner claimed that to save time, he deemed it best to dump the contaminated fine ore, classified as spillage, on his private truck, instead of using the payloader in going back and forth to the stockpile and spillage area. When he noticed Sawa in the vicinity of the stockpiles, petitioner alleged that he stopped what he was doing as he was sure that Sawa would misunderstand the situation. Petitioner also expressed his apologies to respondent about the incident. He further explained that his action in personally cleaning up the contamination was pursuant to the instruction he received from his department head, Engineer Tan, to monitor and clean any contamination in the area.

A formal investigation regarding the incident was conducted by respondent on October 14, 1997. Petitioner appeared with the labor union president and representative and an FFW representative. Nothing came out of it as petitioner and his companions questioned the propriety of going through the investigation without first submitting the issue to the grievance procedure. The investigation was reset to October 16, 1997.8

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

Accordingly, on November 7, 1997, respondent found petitioner guilty of fraud, serious misconduct, breach of trust and confidence, violation of the company’s rules and regulations and violation of his contractual obligations with respondent company. Petitioner’s services were terminated.10

Petitioner filed a complaint for illegal dismissal with the Labor Arbiter. According to petitioner, on September 29, 1997, he reported for work at the plant at 7:00 a.m. and was on duty as shift boss until 12:00 midnight. At about 9:00 to 9:30 a.m., he went to the stockyard for inspection. While checking the stockpiles, he saw that some lumpy ore mixed with and spilt over the fine ore near the divider of the two stockpiles. Further examination revealed that there was a cluster of lumpy ore buried at the base of the fine ore stockpile. Petitioner immediately took action to clean the contamination. He left the stockyard and went to the plant across the highway to secure his dust foe. When he returned to the stockyard, he saw that his private cargo truck has arrived. His truck was hired by his business partner, Ondo Alcantara, to haul dolomite spillage which their business purchased from respondent. Petitioner claimed that, in order to save time, he personally operated

respondent’s payloader, scooped thecontaminated fine ore in the stockpile and loaded it on his private cargo truck. It was while he was hauling the contaminated fine ore that Sawa saw him.

After evaluating the pleadings and position of the parties, the Labor Arbiter found for the petitioner. However, considering the antagonistic relations between the parties, reinstatement of the petitioner was not ordered. Instead, the labor arbiter awarded petitioner separation pay of one half month for every year of service. No backwages were awarded as the labor arbiter noted that petitioner committed indiscretions amounting to gross neglect of duty which rendered him undeserving of the benefit. The dispositive portion of said Decision reads:

"WHEREFORE, premises considered, judgment is hereby rendered declaring the complainant’s dismissal illegal and directing the Philippine Mining Service Corporation to pay complainant the sum of One Hundred Four Thousand Five Hundred Eighty (P104,580.00) Pesos in concept of separation pay and Ten Thousand Four Hundred Fifty-Eight (P10,458.00) Pesos as attorney’s fees.

x x x           x x x           x x x

SO ORDERED."11

Both parties appealed to the National Labor Relations Commission (NLRC). Petitioner claimed for payment of a higher amount of separation pay (equivalent to one month pay for every year of service), backwages and moral and exemplary damages.12 Respondent, on the other hand, insisted that petitioner’s dismissal was for just causes as he was guilty of all the charges when he loaded on his truck fine ore from the stockpile. Respondent claimed that petitioner’s excuse that what he loaded was contaminated fine ore was an afterthought.13

In its Decision, dated October 29, 1999,14 the NLRC upheld the illegal dismissal findings of the labor arbiter and partially granted petitioner’s appeal, thus:

"WHEREFORE, premises considered the appeal filed by the complainant is PARTIALLY GRANTED and the appeal filed by the respondent PMSC is DISMISSED. The decision of the Executive Labor Arbiter Reynoso A. Belarmino dated 30 September 1998 is MODIFIED, to wit:

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

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

SO ORDERED."

Assailing the NLRC decision, respondent appealed15 to the Court of Appeals.

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

Petitioner thus sought recourse to this Court and raised the following issues:

"I

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT RESPONDENT HAD PROVED BY PREPONDERANCE OF EVIDENCE THAT PETITIONER’S DISMISSAL WAS LEGAL AND FOR JUST CAUSE, WHICH COLLIDES WITH THE FINDINGS OF BOTH THE LABOR ARBITER AND THE NLRC BASED ON SUBSTANTIAL EVIDENCE THAT PETITIONER’S DISMISSAL WAS ILLEGAL. MOREOVER, THE APPELLATE COURT OVERLOOKED THE PRINCIPLE THAT PREPONDERANCE OF EVIDENCE AS A QUANTUM OF PROOF DOES NOT APPLY TO LABOR CASES BUT ONLY TO CIVIL CASES.

II

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT EVEN IF CONTAMINATED ORE WAS LOADED ON THE CARGO TRUCK AND NOT THE FINE ORE, STILL PETITIONER WAS GUILTY OF PILFERAGE SINCE THE SALE WAS FOR DOLOMITE SPILLAGE, AND IN NOT GIVING CREDENCE TO PETITIONER’S CLAIM THAT CONTAMINATED ORE IS CLASSIFIED AS SPILLAGE.

III

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT RESPONDENT’S ALLEGATION THAT PETITIONER LOADED FINE ORE ON SEPTEMBER 29, 1997 WAS SUPPORTED BY OTHER CONVINCING EVIDENCE.

IV

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PERSONAL INTEREST HAD LED PETITIONER TO HAUL THE CONTAMINATED ORE HIMSELF WHICH WAS AGAINST COMPANY PROCEDURE.

V

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT IT WAS NOT NECESSARY THAT THE MANAGEMENT SHOULD BE ABLE TO ACCOST PETITIONER RED-HANDED IN THE ACT OF PILFERAGE BECAUSE PETITIONER ADMITTED THAT HE WAS LOADING CONTAMINATED ORE ON THE CARGO TRUCK WHEN WHAT WAS BOUGHT WAS DOLOMITE SPILLAGE AND THAT NUMEROUS EVIDENCE WAS PRESENTED TO SHOW THAT PETITIONER WAS LOADING FINE ORE AND NOT CONTAMINATED ORE AS HE CLAIMED."

We find no merit in the petition.

The main issue before this Court is whether or not the charge of pilferage against petitioner was supported by substantial evidence to warrant his dismissal from the service.

We rule in the affirmative.

Preliminarily, the Labor Code provides that an employer may terminate the services of an employee for just cause and this must be supported by substantial evidence.17 The settled rule in administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employer’s dismissal of an employee, and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient.18 Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.19 Thus, substantial evidence is the least demanding in the hierarchy of evidence.

In the case at bar, our evaluation of the evidence of both parties indubitably shows that petitioner’s dismissal for loss of trust and confidence was duly supported by substantial evidence.

As the first, third, fourth and fifth issues raise interrelated arguments, we shall discuss them jointly. Petitioner insists that the charge against him of stealing ore was not conclusively proved by respondent to warrant his dismissal from service. He maintains that: (1) Sawa should have alighted from his car when he saw petitioner allegedly loading fine ore on his truck and verify if the material being loaded was really contaminated fine ore as maintained by petitioner; and (2) Sawa should have instructed the guard to stop the truck from leaving respondent’s premises pending verification of the delivery receipt covering the hauling he witnessed as he was then already suspicious that there was a violation of company rules and procedure. Petitioner argues that these actions would have established beyond doubt the charge against him. He further maintains that Sawa relied only on circumstantial evidence in concluding that what was loaded on the truck and released by the guards was fine ore and not spillage.

We find no merit in petitioner’s contentions.

First. At the time Sawa saw petitioner hauling fine ore from the stockpile, Sawa had no idea yet that pilferage was being committed by petitioner. He merely checked the covering delivery receipt of said transaction as he was curious why it was petitioner, not the heavy equipment operator, who was operating the payloader. Unfortunately, the person-in-charge of the delivery receipts was out of the office that morning and it was already in the afternoon that Sawa discovered that the product supposed to be picked up that morning was dolomite spillage, not fine ore.

Second. Several instances belie petitioner’s claim that there was contamination of fine ore on September 29, 1997 that necessitated his hauling of the contaminants from the fine ore stockpile. Petitioner as shift foreman made no report of contamination of fine ore on said date. Specifically, at 11:00 a.m. that day, he reported: "ROUTINE INSPECTION OF PLANT OPERATION, OK." Neither can we give credence to his claim that a report of contamination is accomplished only where the contamination is voluminous. An examination of the records reveals that during his plant inspection on September 17 and October 3, 1997, he indicated in his reports the presence of some contaminants in the stockpile, although clearly the amount of contamination was negligible. Moreover, petitioner’s superior, Engr. Tan, reported that no stripping or clearing works were

done in the vicinity of the fine ore and lumpy ore stockpiles in the morning of September 29, 1997 which could have caused the alleged contamination in the stockpile as maintained by petitioner. Finally, the pictures submitted by respondent show that the track marks of the payloader on that day were found only at the fine ore stockpile, not near the divider of the fine ore and lumpy stockpiles where petitioner alleged the contamination occurred.20

Upon the other hand, a number of disturbing circumstances disproved petitioner’s version of the incident and substantially proved his act of pilferage.

First. The security guard’s logbook shows that petitioner entered respondent’s stockyard at 9:37 a.m., just a minute after his private truck arrived in the stockyard to pick up the dolomite spillage ordered by his business partner, Ondo Alcantara. The same record shows that petitioner left the stockyard at 9:45 a.m. and his truck exited the compound a minute later at 9:46 a.m. Petitioner’s presence in the stockyard during those crucial eight (8) minutes when his private truck arrived to pick up his partner’s order of dolomite spillage arouses curiosity.

Second. Respondent lucidly illustrated that petitioner could not have performed the specific acts he claimed to have done during the span of eight (8) minutes that he was in the stockyard, thus:

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

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

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

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

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

We reiterate that proof beyond reasonable doubt of the employee’s misconduct or dishonesty is not required to justify loss of confidence. It is sufficient that there is substantial basis for the loss of trust.21 In the case at bar, respondent has proved by substantial evidence the charge of pilferage against petitioner.

On the second issue, petitioner claims that the Court of Appeals failed to give weight to his position that contaminated fine ore is classified as spillage and as the product purchased by Alcantara that day was dolomite spillage, petitioner could not be held guilty of pilferage when he loaded the contaminated fine ore on his private truck.

We disagree. Respondent clarified that dolomite spillage is different from pure or contaminated fine ore, the latter being one of its regular products. The collection and sale of the ore is exclusively handled by respondent’s General Affairs Office, not the Plant Section to which petitioner belonged.

Dolomite spillage, on the other hand, is not a regular product of respondent. These are the dolomite materials that spill out of the conveyor lines due to overflowing. The spillage occurs prior to the pouring and storage of the ore products in their separate stockpiles. Thus, clearly, petitioner was guilty of pilferage whether or not it was fine ore or contaminated fine ore that he hauled that day.

Finally, petitioner argues that assuming there was evidence to support the charges against him, his dismissal from service is unwarranted, harsh and grossly disproportionate to his act, considering his long years of service with the company.

To be sure, length of service is taken into consideration in imposing the penalty to be meted an erring employee. However, the case at bar involves dishonesty and pilferage by petitioner which resulted in respondent’s loss of confidence in him. Unlike other just causes for dismissal, trust in an employee, once lost is difficult, if not impossible, to regain. Moreover, petitioner was not an ordinary rank-and-file employee. He occupied a high position of responsibility. As foreman and shift boss, he had over-all control of the care, supervision and operations of respondent’s entire plant. It cannot be over-emphasized that there is no substitute for honesty for sensitive positions which call for utmost trust. Fairness dictates that respondent should not be allowed to continue with the employment of petitioner who has breached the confidence reposed on him.22 As a general rule, employers are allowed wider latitude of discretion in terminating the employment of managerial employees as they perform functions which require the employer’s full trust and confidence.23

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

IN VIEW WHEREOF, the petition is DENIED. The Decision of the Court of Appeals, dated March 13, 2001, in C.A. G.R. No. 59559 is affirmed.

SO ORDERED.

G.R. No. 99047       April 16, 2001

OMAR O. SEVILLA, petitioner, vs.I.T. (INTERNATIONAL) CORP./SAMIR MADDAH & TRAVELLERS INSURANCE AND SURETY CORPORATION, DEPARTMENT OF LABOR AND EMPLOYMENT and NATIONAL LABOR RELATIONS COMMISSION (Second Division), respondents.

DE LEON, JR., J.:

This old petition, denominated as a petition for review on certiorari under Rule 45 of the Revised Rules of Court Ishall be treated as a special civil action for certiorari under Rule 65 for reasons which are hereinafter stated. The petition seeks to reverse the Resolutlon1 dated March 26, 1991 of public respondent National Labor Relations Commission (NLRC), Second Division, which set aside

the Decision2 dated December 29, 1989 of the Philippine Overseas Employment Administration Adjudication Office in POEA Case No. (L) 88-12-1048.

The facts are as follows:

Sometime in November 1987, petitioner Omar Sevillana was contracted to work as a driver by private respondent I.T. (International) Corporation (I.T., for brevity) for its foreign accredited principal, Samir Maddah (Samir, for brevity), in Jeddah, Saudi Arabia. The agreed monthly salary was US $370.00 for a period of two (2) years. Petitioner alleged, however, that when he received his salaries from his employer, he was only paid US $100.00 a month for twelve (12) months, instead of the agreed US $370.00 per month. 1âwphi1.nêt

On November 2, 1988, after working twelve (12) months with his employer, petitioner said that he was repatriated without any valid and justifiable reason. Petitioner shouldered the cost of his return airfare in the amount of US $630.00.

Thereafter, petitioner filed a complaint with the Philippine Overseas Employment Administration (POEA, for brevity) for underpayment of salaries, illegal dismissal, reimbursement of return airfare, moral damages and attorney's fees against I.T, (International) Corporation, Samir Maddah and Travellers Insurance and Surety Corporation (Travellers, for brevity).

In answer thereto, private respondent I.T denied the material allegations of the petitioner but admitted that the petitioner was one of several workers it deployed and employed abroad. I.T. argued that the petitioner continuously worked with Samir for more than one (1) year until his blood pressure was considered critical. Thus,Samir was forced to closely monitor the health condition of the petitioner. When petitioner's blood pressure did not stabilize and begun affecting his work as driver due to frequent headaches and dizziness, I.T. alleged that Samirdecided to repatriate the petitioner to avoid further injury and complication to his health. I.T. claimed that after the petitioner had received all the benefits accorded to an employee consisting of full salaries and separation pay, the petitioner refused to be repatriated and instead decided to run away. Since then, the whereabouts of the petitioner were unknown and I.T. only heard about the petitioner when the latter reported to their office in the Philippines and later on filed the subject complaint before the POEA Adjudication Office.

After both parties have submitted their respective position papers and their evidence thereto, the POEA Adjudication Office, through Tomas Achacoso, rendered a decision on December 29, 1989 holding the private respondents herein jointly and severally liable to the petitioner. The dispositive portion of the POEA decision reads –

"WHEREFORE, premises considered, judgment is hereby rendered ordering the respondents (International) Corporation, Madir and Travellers Insurance & Surety Co~oration jointly and severally liable to the complainants the following amounts or their peso equivalents at the time of payment:

1. THREE THOUSAND TWO HUNDRED FORTY US DOLLARS (US $3,240.00) representing complainant's salary differential for his twelve months employment;

2. FOUR THOUSAND FOUR HUNDRED FORTY US DOLLARS (US $4,440.00) representing complainant's salaries for the unexpired portion of his employment contract;

3. TWO THOUSAND THREE HUNDRED SIX1Y NINE SAUDI RIY AL (S.R. 2,369.00) representing the cost of complainant's return airfare;

4. 5% of the aforesaid amounts as attorney's fees.

All other claims of the complainant are dismissed.

SO ORDERED."3

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

x x x x x x x x x

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

Consequently, we find it disconcerning to stamp our imprimatur of approval in the assailed decision considering (the) quantum of evidence presented vis-il-vis (the) amount involved in the award.

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

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

Thirdly, considering that the payment of the PAL ticket is at issue and there being no other evidence presented, except their respective bare self-serving and conflicting allegations We find no sufficient evidence to support a conclusion that one party paid for the ticket.

Basic in this jurisdiction is that he who asserts a right must prove it. In labor disputes, the evidence mandated by law are these relevant evidence which a reasonable and unbiased mind would accept to support a conclusion. Failing to do this, We find no basis to the award.

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

SO ORDERED."4

Dissatisfied, petitioner now come to us and assigns the following as errors committed by the NLRC, to wit:

I

THE PUBLIC RESPONDENT ERRED IN HOLDING THAT THE AFFIDAVIT OF COMIPLAINT CANNOT BE THE BASIS OF TRUTH BECAUSE THE AFFIANT w AS NOT CROSS- EXAMINED .

II

THE PUBLIC RESPONDENT ERRED IN HOLDING THAT THE COMPLAINANT-PETITIONER WAS NOT ILLEGALLY DISMISSED. .

III

THE PUBLIC RESPONDENT ERRED IN HOLDING THAT NEITHER PARTY, THE COMPLAINANT AND RESPONDENT, COULD BE AWARDED REIMBURSEMENT FOR THE PAL TICKET.

The Solicitor General, in his Comment5 to the petition, joined the petitioner6 in arguing that although there was a failure to allege grave abuse of discretion against the NLRC, this element of grave abuse of discretion is present in the instant petition. The assailed resolution was issued in gross violation of the settled principle that affidavits suffice as evidence in proceedings before quasi-judicial bodies like the POEA.7

We find merit in the petition.

At the outset, we note that the instant petition was filed with this Court on May 22, 1991 before the ruling of this Court in the case of the St. Martin Funeral Home vs. NLRC8 on September 16, 1998 which required that judicial review of labor cases should be filed in the Court of Appeals before the same can be elevated to this Court following the doctrine on hierarchy of courts. The prevailing jurisprudence then holds that judicial review of labor cases by the Supreme Court may only be through a petition for certiorari under Rule 65 of the Rules of Court.9Moreover, in the interest of

justice, this Court had treated, in a number of cases, as special civil actions for certiorari petitions erroneously captioned as petitions for review on certiorari.10 It is in this light that we so treat the present petition. Rules of procedure and evidence should not be applied in a very rigid and technical sense in labor cases in order that technicalities would not stand in the way of equitably and completely resolving the rights and obligations of the parties.11

Furthermore, while we consider this petition as one for certiorari under Rule 65 of the Rules of Court, it is likewise significant to note that petitioner failed to seasonably file a motion for reconsideration at the NLRC level before recourse to this Court was made. As a general rule, this petition should have been dismissed outright for failure to comply with a condition precedent in order that this petition for certiorari shall lie. The filing of a motion for reconsideration before resort to certiorari will lie is intended to afford the public respondent an opportunity to correct any actual or fancied error attributed to it by way of re-examination of the legal and factual aspects of the case.12 However, this rule is subject to certain recognized exceptions.13 Upon careful consideration of the case at bar, we find that this case falls under one of those recognized exceptions, namely, that the assailed order is a patent nullity, as will be shown later.

Anent the first issue, petitioner contends that public respondent NLRC acted with grave abuse of discretion when it considered petitioner's complaint-affidavit as mere hearsay evidence since the petitioner was not cross-examined. Petitioner argues that private respondent I.T . waived its right to cross-examine him when both parties agreed to submit their case for decision before the POEA Adjudication Officer on the basis of each parties' respective position papers, affidavits and other evidence extant on the record below.

Petitioner's argument is well-taken. It must be stressed that labor laws mandate the speedy disposition of cases, with the least attention to technicalities but without sacrificing the fundamental requisites of due process. In this light, the NLRC, like the labor arbiter, (in the case at bar, the POEA Adjudication Officer) is authorized to decide cases based on the position papers and other documents submitted, without resorting to technical rules of evidence.14

We quote, with approval, the following observations of the Solicitor General:

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

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

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

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

employment records which were in the custody of ABC, to show that they had served (for) less than one year.'   (Underscoring for emphasis)

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

The fact alone that most of the documents submitted in evidence by an employee were prepared by him does not make them self-serving since they have been offered in the proceedings before the Labor Arbiter (in this case before the POEA Adjudication Officer) and that ample opportunity was given to the employer to rebut their veracit and authenticity. 16 The seriousness of the allegations in the complaint-affidavit in the case at bar cannot just be perfunctorily rejected absent any showing that the petitioner-affiant was lying when he made the statements contained therein. There being none, it was grave abuse of discretion on the part of the NLRC to ignore or simply sweep under the rug the petitioner's complaint-affidavit and conclude that it is a mere hearsay evidence without finding that there was adequate reason not to believe the allegations contained therein. Accordingly, the NLRC ruling that the complaint-affidavit is hearsay because the affiant was not cross-examined has no legal basis because the rules of evidence are not supposed to be strictly observed in proceedings before the NLRC and the POEA Adjudication Office. The NLRC failed to observe this well-entrenched doctrine when this case was brought on appeal before it.

Neither can we warrant the ruling of the NLRC that herein private respondent I.T. may only be considered as an agent of Samir, its foreign principal, and that private respondent I.T. should not be expected to have access to the employment records of its said foreign principal, thereby justifying the latter's non-presentation of the needed documents before the POEA Adjudication Office, and the absolution of I.T. from any liability to petitioner.17 In so ruling, respondent NLRC disregarded the rule regarding the solidary liability of the local employment agency with its foreign principal in overseas employment contracts. Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment.18This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him.19 This is in line with the policy of the State to protect and alleviate the plight of the working class. The fact, however, that private respondent I.T. failed to fully air its position was mainly due to its own inaction and negligence when it chose not to present countervailing evidence on the records of salary payments and separation pay it claimed Samir has paid to petitioner. Petitioner, on the other hand, cannot be expected to have the proper facility to produce the same before the POEA Adjudication Officer considering that their relations became sour due to the present charges.

The NLRC's doubts in the factual findings of the POEA Adjudication Officer should not have prompted it to reject outright the contention of the petitioner contained in his complaint-affidavits, position paper and evidence submitted to the POEA Adjudication Office. The NLRC is not precluded by the rules to allow both parties ill submit additional evidence to prove their respective claims even on appeal20 or to order the remand of the case to the administrative agency concerned for further study and investigation upon such issues. Since NLRC relied on the available evidence obtaining in the records of this case, it should have followed the well-settled doctrine that if doubts exist between the evidence presented by the employer (as represented by the local employment agency in this case) and the employee, the doubts must be resolved in favor of the employee.21

As regards the issue of petitioner's dismissal from employment, petitioner claims that he was illegally dismissed; that respondent I.T. failed to substantiate its claim that petitioner was repatriated because he (petitioner) was found to have hypertension; and that respondent I.T. has the burden of proving that petitioner was legally dismissed.

We rule for the petitioner."

When the NLRC declared that the burden of proof in dismissal cases shifts to the employer only when the latter admits such dismissal, the NLRC ruled erroneously in disregard of the law and prevailing jurisprudence on the matter. As correctly articulated by the Solicitor General in his Comment to this petition, thus –

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

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

Moreover, Article 4 of the Labor Code provides:

'Art. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.'

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

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

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

Time and again we have ruled that where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal. The burden is on the employer to prove that the termination of employment was for a valid and legal cause. For an employee's dismissal to be valid, (a) the dismissal must be for a valid cause and (b) the employee must be afforded due process.23

A review of the record shows that neither of the two (2) conditions precedent were shown to have been complied with by the private respondents. All that private respondent I.T. did was to rely on its claim that petitioner was repatriated by its foreign principal, respondent Samir Maddah, due to hypertension with nary an evidence to support it. In all termination cases, strict compliance by the employer with the demands of both procedural and substantive due process is a condition sine qua non for the same to be declared valid.24 Under Section 8, Rule I, Book VI of the Rules and Regulations Implementing the Labor Code, for a disease to be a valid ground for the dismissal of the employee, the continued employment of such employee is prohibited by law or prejudicial to his health or the health of his co-employees, there must be a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period

of six (6) months, even with proper medical treatment. This rule was correctly applied by the POEA Adjudication Office in its Decision dated December 29, 1989, to wit:

"In so far as the issue of illegal dismissal is concerned, this Office also finds it in the affirmative.

This Office in arriving at the aforesaid conclusion, takes into consideration the express provision of the Labor Code [Art. 277, par. (b)] that expressly provides that the burden of proving that the termination was for a valid or authorized cause shall rest on the employer (respondents in the instant case).

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

Since the burden of proving the validity of the dismissal of the employee rests on the employer, the latter should likewise bear the burden of showing that the requisites for a valid dismissal due to a disease have been complied with. In the absence of the required certification by a competent public health authority, this Court has ruled against the validity of the employee's dismissal.26 It is therefore incumbent upon the private respondents to prove by the quantum of evidence required by law that petitioner was .,ot dismissed, or if dismissed, that the dismissal was not illegal; otherwise, the dismissal would be unjustified.27 This Court will not sanction a dismissal premised on mere conjectures and suspicions, the evidence must be substantial and not arbitrary and must be founded on clearly established facts sufficient to warrant his separation from work.28 We find no cogent reason to depart from the conclusion reached by the POEA Adjudication Office in the case at bar.

We also find merit in the petitioner's claim of refund for his repatriation plane ticket. The record shows that private respondent I.T. failed to controvert this claim of petitioner during the arbitration level at the POEA Adjudication Office. If at all, this belated claim of private respondent I.T., in the absence of proof therefor, and contrary to its Memorandum dated October 16, 1992 that respondent Samir had paid for the repatriation plane ticket of the petitioner, is merely an afterthought that deserves scant consideration from this Court. The POEA thus held that –

"Noteworthy in the instant case is respondent's failure to deny complainant's allegation that he was the one who shouldered the cost ofhis return airfare in the amount of SR 2,369.00. Having failed to deny the same, herein respondents are deemed to have admitted the same. Considering that the complainant in this case was illegally dismissed as mentioned earlier, the herein respondents are therefore liable to the repatriation expenses (return airfare in this case) of the herein complainant in the amount of SR 2,369.00 (per Annex 'A')."29

The solidary nature of the relationship of respondent I.T. as the local employment agency, and respondent Samir, its foreign principal, vis-a-vis the petitioner does not exempt respondent I.T. from presenting proof of its alleged payment of the repatriation plane ticket. In the absence of proof to the

contrary, the evidence of petitioner in that regard, as pointed out by the Solicitor General, merits the favorable consideration of this Court, to wit:

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

'This is to certify that Overseas Contract Worker OMAR SEVILLANA, holder of passport No. DC 0605633, issued on 20 Nov. 1986 at Davao City, sought the assistance of this Office in connection with his employment problem. He stayed as stranded OCW at the Extension Office of the Labor Attache', Consulate General of the Philippines.

'Subject stranded OCW purchased his own ticket No. 0742041113955 form Jeddah to Manila via Karachi. The subject OCW was repatriated on 2 November 1988.

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

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

The Court in Pacific Maritime Services, Inc. vs. Ranay31 reiterated the doctrine regarding a claim of payment in labor cases, viz:

"As a general rule, one who pleads payment has the burden of proving it. Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment."

In view of all the foregoing, we hold that the assailed resolution of public I espondent NLRC is a patent nullity; and that the same was issued in grave abuse of discretion. The said resolution of public respondent NLRC, being a patent nullity, immediate resort to this Court was justified even without a prior motion for reconsideration therefor.

WHEREFORE, the assailed Resolution dated March 26, 1991 of public respondent National Labor Relations Commission (Second Division) is hereby REVERSED and SET ASIDE; and the Decision dated December 29, 1989 of the POEA Adjudication Office is hereby REINSTATED.1âwphi1.nêt

SO ORDERED.

G.R. No. 154078             May 6, 2005

EDGARDO D. MILLARES, petitioner, vs.PHILIPPINE LONG DISTANCE TELEPHONE CO., INC. AND AMBROSIO HUGO, respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

For resolution is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 dated April 16, 2002 and the Resolution2 dated June 26, 2002 rendered by the Court of Appeals in CA-G.R. SP No. 66611, entitled "Edgardo D. Millares vs. National Labor Relations Commission, Philippine Long Distance Telephone Co., Inc. and Ambrosio Hugo."

The facts as borne by the records are:

Sometime in May, 1989, Edgardo D. Millares, petitioner, was employed by the Philippine Long Distance Telephone Co., Inc. (PLDT), respondent company, as cable splicer helper. At the time of his dismissal from the service, he was a junior cable splicer at the OPSIM II, Tondo Exchange, receiving a monthly salary of P7,300.00.

On August 8, 1995, Ambrosio B. Hugo, Manager of respondent company's Tondo Exchange, received a complaint from Celestina Ignacio, a prospective telephone subscriber residing at 91-R Mahomas Compound, Tondo, Manila. She reported that on May 10, 1995, petitioner, for a service fee of P3,800.00, promised to install a telephone line at her residence but that he failed to do so; and that despite her demand, he refused to return to her said amount.

During the clarificatory hearing conducted by respondent company on August 19, 1995, petitioner denied that he knew Celestina Ignacio and that he received P3,800.00 from her. But eventually, he admitted his offense and promised to repay her the amount.

Thereafter, respondent company sent him two (2) separate inter-office memoranda (IOM) dated August 28, 1995 and September 6, 1995, charging him with willful violation of company rules and regulations and directing him to submit a written explanation. However, he refused and remained obstinate.

Meantime, on September 26, 1995, petitioner paid Celestina the amount of P3,800.00. Consequently, she executed a written retraction stating that she was forced to file a complaint against petitioner when he failed to pay his loan of P3,800.00.

Respondent company found petitioner guilty of extortion and serious misconduct. Consequently, he was dismissed from the service effective July 19, 1996.

Aggrieved, petitioner filed with the Labor Arbiter a complaint for illegal dismissal and damages against respondent and Ambrosio B. Hugo, docketed as NLRC NCR Case No. 00-10-06367-96.

In due course, the Labor Arbiter rendered a Decision dated April 30, 1999 holding that petitioner was illegally dismissed from employment and ordering respondent company to reinstate him to his former position and to pay him P263,901.08 representing his backwages, allowances and other benefits. The dispositive portion of the Decision reads:

"WHEREFORE, above premises duly considered, we find the dismissal of complainant as illegal.

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

1. Backwages:

7/19/96 – 4/30/99 = 33.37 months

P 7,300.00 x 33.37

P243,601.00

2. 13th Month Pay:

1/12 of P243,601.00 20,300.08

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

P263,901.08

The claim for damages is dismissed for lack of merit.

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

SO ORDERED."

Upon appeal, the National Labor Relations Commission (NLRC) promulgated a Decision dated September 29, 2000 reversing the Arbiter's assailed Decision, thus:

"We find the instant appeal to be impressed with merit.

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

x x x       x x x

It is reversible error to rely heavily on the recantation made by Mrs. Ignacio. From all indications, the belated change of heart of Mrs. Ignacio was an afterthought purposely

designed to facilitate the defense of appellee after she received full payment from him. Her recantation did not obliterate the liability of the appellee in the light of the investigation report of Mr. Reyes which deserves and should have been accorded full faith and credit being the result of an impartial and honest to goodness investigation conducted based on Mrs. Ignacio's letter-complaint. To honor the recantation is tantamount to condoning mockery of the law. At most, it may be treated as an instrument of falsehood, hence, must be ignored.

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

x x x       x x x

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

SO ORDERED."

Petitioner then filed a motion for reconsideration but was denied by the NLRC in a Resolution dated May 31, 2001. Hence, he filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 66611.

On April 16, 2002, the Appellate Court rendered a Decision affirming the assailed Decision of the NLRC, thus:

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

x x x

Petitioner was given every opportunity to defend himself. He was asked to submit a written explanation why he should not be held liable for violating company regulations by negotiating with a subscriber for the facilitation of telephone installation in consideration of the amount of P3,800.00. IOM was given to him not just once but twice before he was served the termination letter. Notwithstanding that there was a ten-month gap between said notices, respondent PLDT validly effected petitioner's dismissal.

The denunciation of Mrs. Ignacio against the petitioner on separate occasions were given candidly, spontaneously and before she was influenced to recant after petitioner was compelled to return the money after receiving the IOM. While there is no hard and fast rule to determine the truthfulness of one's testimony, that which conforms, however, to the quotidian knowledge, observation and experience of man is often deemed to be reliable (People vs. Niño, 290 SCRA 155).

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

x x x       x x x

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

SO ORDERED."

On May 8, 2002, petitioner filed a motion for reconsideration, but was denied by the Appellate Court in a Resolution dated June 26, 2002.

Hence, this petition for review on certiorari.

Petitioner contends, among others, that the Court of Appeals seriously erred (1) in finding that there is substantial evidence to support his dismissal from the service; (2) in disregarding the retraction of Celestina Ignacio; and (3) in holding that respondent company's inter-office memoranda dated August 28, 1995 and September 6, 1995 show that he was not deprived of his right to due process.

The fundamental issue here is whether respondent company was able to prove by substantial evidence that petitioner is liable for gross misconduct by demanding from Celestina Ignacio a service fee of P3,800.00 for the installation of a telephone line. The issue raised is factual. It is basic that the findings of fact by the Court of Appeals, when supported by substantial evidence, are conclusive and binding upon the parties and are not reviewable by this Court, unless the case falls under any of the exceptions to the rule, such as when the findings by the Appellate Court are not supported by evidence. 3 This exception is being relied upon by petitioner.

Here, we find there is substantial evidence to support the findings of the Court of Appeals that petitioner's dismissal from the service is valid. Well-entrenched is the rule that substantial proof is sufficient as basis for the imposition of any disciplinary action upon the employee. The standard of substantial evidence is satisfied where the employer, as in this case, has reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders him unworthy of trust and confidence demanded by his position.4 That petitioner violated respondent PLDT's rules and regulations and committed serious misconduct in the performance of his duties, have been proved by Celestina Ignacio. Respondent thus lost its trust and confidence in petitioner. Under Article 282 of the Labor Code, as amended, these are just causes for dismissing him from the service.

Moreover, the Appellate Court did not err in rejecting Celestina's retraction. A careful perusal of the minutes of the clarificatory hearing reveals that she retracted her complaint only after respondent paid her, thus:

"ATTY. OLITOQUIT:

When this Mr. Reyes went to your residence to investigate regarding your complaint, you did not make any letter retraction or affidavit of retraction?

WITNESS:

Wala sir.

ATTY. OLITOQUIT:

And after that meeting in your residence, there was still another meeting between you, Mr. Reyes and the complainant at the PLDT office?

WITNESS:

Yes, sir.

ATTY. OLITOQUIT:

And in that meeting Madam witness you did not write any letter or filed any sinumpaang salaysay staing that the money Mr. Millares got from you was only a loan?

WITNESS:

Wala, sir.

ATTY. OLITOQUIT:

In other words, the first retraction you made was this document dated September 27, 1995?

WITNESS:

Yes, sir.

ATTY. OLITOQUIT:

In other words, Madam witness, you made this retraction including the sinumpaang salaysay which was earlier marked as Exhibit '5', after you were paid by Mr. Millares?

WITNESS:

Oho, pagkatapos niyang magbayad, wala na siyang kasalanan sa akin."

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

Finally, there is no cogent reason why we should not accord deference and finality to the Appellate Court's finding that petitioner was accorded his right to due process. In Santos vs. San Miguel Corporation,6 we reiterated the well-entrenched rule that "(p)rocedural due process requires the employer to give the employee two notices. First is the notice apprising him of the particular acts or omissions for which his dismissal is sought. Second is the subsequent notice informing him of the employer's decision to dismiss him." In the case at bar, respondent company sent petitioner the required notices. Clearly, he was not deprived of his right to due process.

WHEREFORE, the petition is DENIED. The assailed Decision dated April 16, 2002 and the Resolution dated June 26, 2002 of the Court of Appeals in CA-G.R. SP No. 66611 are hereby AFFIRMED.

Costs against petitioner.

SO ORDERED.

G.R. No. 142759             November 10, 2004

PHILTREAD TIRE & RUBBER CORPORATION, petitioner, vs.ALBERTO VICENTE, respondent.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

For resolution is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 dated November 25, 1999 and the Resolution2 dated March 22, 2000 rendered by the Court of Appeals in CA-G.R. SP No. 52723, entitled "Philtread Tire and Rubber Corporation vs. National Labor Relations Commission and Alberto Vicente."

The facts as borne by the records are:

On February 9, 1978, Alberto M. Vicente, respondent, was employed by Philtread Tire and Rubber Corporation, petitioner. At the time of his dismissal from the service, he was a housekeeping coordinator at the General Services Department, receiving a monthly salary of P8,784.00. One of his duties was to recommend to petitioner, for its approval, projects intended for the beautification and maintenance of its premises.

On February 15, 1991, Engr. Ramon Y. Dumo, Administrative Officer and Head of petitioner’s Security and Safety Department, received a complaint from Crisente Avis, a sign painter with whom petitioner had a service contract. Avis reported that he was being forced by respondent to overprice by P1,000.00 his service fee of PP3,800.00 and to deliver to him (respondent) the said amount of P1,000.00; and that should Avis fail to do so, he will no longer be awarded future contracts.

Acting thereon, Engr. Dumo conducted an investigation attended by respondent, Avis, and three representatives from the workers’ union. Avis declared that sometime in January 1991, petitioner hired him to paint its trash cans, push carts and cigarette waste boxes. They agreed that his services will be paid upon completion of the painting job and submission of the corresponding invoice. However, herein respondent instructed him to prepare an invoice indicating therein that his fee for his painting services is P4,800.00, instead of P3,800.00. Respondent even assured him that the petitioner will approve the invoice.

At this juncture, petitioner assigned respondent to perform janitorial duties, prompting him to request an immediate disposition of his case. But when petitioner directed him to submit his evidence within three (3) days from notice, he failed to comply.

After evaluating the records on hand, petitioner found respondent guilty of extortion, fraud, serious misconduct and willful breach of trust and confidence. Petitioner then sent him a notice terminating his services effective March 3, 1991.

Eventually, respondent filed with the Labor Arbiter a complaint for illegal dismissal and damages against petitioner and Engr. Dumo, docketed as NLRC NCR Case No. 00-03-01376-91.

In due course, the Labor Arbiter rendered a Decision dated December 3, 1992 dismissing respondent’s complaint for lack of merit.

Upon appeal, the National Labor Relations Commission (NLRC) promulgated a Decision dated August 29, 1994 reversing the Arbiter’s assailed Decision, holding that respondent was illegally dismissed, thus:

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

SO ORDERED."

Petitioner then filed a motion for reconsideration but was denied by the NLRC in a Resolution dated October 11, 1994. Hence, it filed with this Court a petition for certiorari with prayer for the issuance of a temporary restraining order, docketed as G.R. No. 118337.

Pursuant to our ruling in St. Martin’s Funeral Home vs. NLRC,3 we referred the petition to the Court of Appeals for appropriate action and disposition.

On November 25, 1999, the Appellate Court rendered a Decision affirming the assailed Decision of the NLRC, thus:

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

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

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

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

x x x

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

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

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

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

SO ORDERED."

On December 10, 1999, petitioner filed a motion for reconsideration, but was denied by the Appellate Court in a Resolution dated March 22, 2000.

Hence, this petition for review on certiorari.

Petitioner contends, among others, that the Court of Appeals seriously erred (1) in finding that there is no substantial evidence to support the complaint against petitioner; and (2) in disregarding the testimony of Crisente Avis on the ground that it is an affirmation of his unverified complaint.

The fundamental issue here is whether petitioner was able to prove by substantial evidence that respondent is liable for extortion by forcing Avis to increase his service fee by P1,000.00. The issue raised is factual. It is basic that the findings of fact by the Court of Appeals, when supported by substantial evidence, are conclusive and binding upon the parties and are not reviewable by this Court, unless the case falls under any of the exceptions to the rule, such as when the findings by the Appellate Court are not supported by evidence.4 This exception is being relied upon by petitioner.

Here, there is neither direct nor documentary evidence to prove that respondent was involved in extortion. In fact, a careful perusal of the minutes of the investigation reveals that Avis did not categorically state that he was pressured by respondent to overprice his service fee, thus:

"AGENDA: To conduct preliminary investigation regarding the complaint of one CRISENTE AVIS, a painter and a Philtread contractor, alleging that Mr. Alberto Vicente is pressuring him to raise his service fee so that the latter will also gain ‘grease money.’

x x x

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

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

x x x."5

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

The Appellate Court did not err in concluding that there is no valid cause in terminating respondent’s employment. The well-established rule is that the findings of fact of the Court of Appeals, particularly where they are in absolute agreement with that of the NLRC, as in this case, are accorded not only great respect but even finality and are deemed binding upon this Court.7

Verily, respondent who was illegally dismissed from work is entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.8

However, the circumstances obtaining in this case do not warrant the reinstatement of respondent. Aside from the fact that antagonism caused a severe strain in the parties’ employer-employee relationship, petitioner company has "completely ceased its tire manufacturing and marketing operations effective November 11, 1994," as evidenced by its Notice of Indefinite Suspension of Manufacturing Operations dated November 10, 19949 to the Security and Exchange Commission and its Application for Business Retirement dated February 22, 199610 filed with the Business Permits & Licensing Office of the City of Muntinlupa. Thus, a more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher, (with a fraction of at least six (6) months being considered as one (1) whole year),11 in addition to his full backwages, allowances and other benefits.12

Records show that respondent was employed from February 9, 1978 to March 3, 1991, or for thirteen (13) years, with a monthly salary of P8,784.00. Hence, he is entitled to a separation pay of P114,192.00.

WHEREFORE, the assailed Decision dated November 25, 1999 and the Resolution dated March 22, 2000 of the Court of Appeals in CA-G.R. SP No. 52723 are hereby AFFIRMED with MODIFICATION in the sense that, in lieu of reinstatement, respondent is awarded separation pay equivalent to P114,192.00, plus his full backwages, and other privileges and benefits, or their monetary equivalent, during the period of his dismissal up to his supposed actual reinstatement.

Costs against petitioner.

SO ORDERED.

G.R. No. 166208              June 29, 2007

KING OF KINGS TRANSPORT INC., CLAIRE DELA FUENTE and MELISSA LIM, petitioners, vs.SANTIAGO O. MAMAC, respondent.

D E C I S I O N

VELASCO, JR., J.:

Is a verbal appraisal of the charges against the employee a breach of the procedural due process? This is the main issue to be resolved in this plea for review under Rule 45 of the September 16, 2004 Decision1 of the Court of Appeals (CA) in CA-GR SP No. 81961. Said judgment affirmed the dismissal of bus conductor Santiago O. Mamac from petitioner King of Kings Transport, Inc. (KKTI), but ordered the bus company to pay full backwages for violation of the twin-notice requirement and 13th-month pay. Likewise assailed is the December 2, 2004 CA Resolution2 rejecting KKTI’s Motion for Reconsideration.

The Facts

Petitioner KKTI is a corporation engaged in public transportation and managed by Claire Dela Fuente and Melissa Lim.

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

The KKTI employees later organized the Kaisahan ng mga Kawani sa King of Kings (KKKK) which was registered with DOLE. Respondent was elected KKKK president.

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

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

On November 26, 2001, respondent received a letter4 terminating his employment effective November 29, 2001. The dismissal letter alleged that the October 28, 2001 irregularity was an act of fraud against the company. KKTI also cited as basis for respondent’s dismissal the other offenses he allegedly committed since 1999.

On December 11, 2001, respondent filed a Complaint for illegal dismissal, illegal deductions, nonpayment of 13th-month pay, service incentive leave, and separation pay. He denied committing any infraction and alleged that his dismissal was intended to bust union activities. Moreover, he claimed that his dismissal was effected without due process.

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

On September 16, 2002, Labor Arbiter Ramon Valentin C. Reyes rendered judgment dismissing respondent’s Complaint for lack of merit.6

Aggrieved, respondent appealed to the National Labor Relations Commission (NLRC). On August 29, 2003, the NLRC rendered a Decision, the dispositive portion of which reads:

WHEREFORE, the decision dated 16 September 2002 is MODIFIED in that respondent King of Kings Transport Inc. is hereby ordered to indemnify complainant in the amount of ten thousand pesos (P10,000) for failure to comply with due process prior to termination.

The other findings are AFFIRMED.

SO ORDERED.7

Respondent moved for reconsideration but it was denied through the November 14, 2003 Resolution8 of the NLRC.

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

The Ruling of the Court of Appeals

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

Also, the appellate court sustained the finding that petitioners failed to comply with the required procedural due process prior to respondent’s termination. However, following the doctrine in Serrano v. NLRC,10 it modified the award of PhP 10,000 as indemnification by awarding full backwages from the time respondent’s employment was terminated until finality of the decision.

Moreover, the CA held that respondent is entitled to the 13th-month pay benefit.

Hence, we have this petition.

The Issues

Petitioner raises the following assignment of errors for our consideration:

Whether the Honorable Court of Appeals erred in awarding in favor of the complainant/private respondent, full back wages, despite the denial of his petition for certiorari.

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

Whether the Honorable Court of Appeals rendered an incorrect decision in that [sic] it awarded in favor of the complaint/private respondent, 13th month pay benefits contrary to PD 851.11

The Court’s Ruling

The petition is partly meritorious.

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

Non-compliance with the Due Process Requirements

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

Art. 277 of the Labor Code provides the manner of termination of employment, thus:

Art. 277. Miscellaneous Provisions.––x x x

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

Accordingly, the implementing rule of the aforesaid provision states:

SEC. 2. Standards of due process; requirements of notice.––In all cases of termination of employment, the following standards of due process shall be substantially observed:

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

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

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

(c) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. 13

In case of termination, the foregoing notices shall be served on the employee’s last known address.14

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

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

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

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

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

We are not convinced.

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

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

Third, no hearing was conducted. Regardless of respondent’s written explanation, a hearing was still necessary in order for him to clarify and present evidence in support of his defense. Moreover, respondent made the letter merely to explain the circumstances relating to the irregularity in his October 28, 2001 Conductor’s Trip Report. He was unaware that a dismissal proceeding was already being effected. Thus, he was surprised to receive the November 26, 2001 termination letter indicating as grounds, not only his October 28, 2001 infraction, but also his previous infractions.

Sanction for Non-compliance with Due Process Requirements

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

Thus, for non-compliance with the due process requirements in the termination of respondent’s employment, petitioner KKTI is sanctioned to pay respondent the amount of thirty thousand pesos (PhP 30,000) as damages.

Thirteenth (13th)-Month Pay

Section 3 of the Rules Implementing Presidential Decree No. 85122 provides the exceptions in the coverage of the payment of the 13th-month benefit. The provision states:

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

x x x x

e) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned.

Petitioner KKTI maintains that respondent was paid on purely commission basis; thus, the latter is not entitled to receive the 13th-month pay benefit. However, applying the ruling in Philippine Agricultural Commercial and Industrial Workers Union v. NLRC,23 the CA held that respondent is entitled to the said benefit.

It was erroneous for the CA to apply the case of Philippine Agricultural Commercial and Industrial Workers Union. Notably in the said case, it was established that the drivers and conductors praying for 13th- month pay were not paid purely on commission. Instead, they were receiving a commission

in addition to a fixed or guaranteed wage or salary. Thus, the Court held that bus drivers and conductors who are paid a fixed or guaranteed minimum wage in case their commission be less than the statutory minimum, and commissions only in case where they are over and above the statutory minimum, are entitled to a 13th-month pay equivalent to one-twelfth of their total earnings during the calendar year.

On the other hand, in his Complaint,24 respondent admitted that he was paid on commission only. Moreover, this fact is supported by his pay slips25 which indicated the varying amount of commissions he was receiving each trip. Thus, he was excluded from receiving the 13th-month pay benefit.

WHEREFORE, the petition is PARTLY GRANTED and the September 16, 2004 Decision of the CA is MODIFIED by deleting the award of backwages and 13th-month pay. Instead, petitioner KKTI is ordered to indemnify respondent the amount of thirty thousand pesos (PhP 30,000) as nominal damages for failure to comply with the due process requirements in terminating the employment of respondent.

No costs.

SO ORDERED.

G.R. No. 154503             February 29, 2008

UNIWIDE SALES WAREHOUSE CLUB and VIVIAN M. APDUHAN, petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION and AMALIA P. KAWADA, respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by Uniwide Sales Warehouse Club (Uniwide) and Vivian M. Apduhan (Apduhan) seeking to annul the Decision1 dated November 23, 2001 and the Resolution2 dated July 23, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 64581.

The facts of the case:

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

As a Full Assistant Store Manager, private respondent's primary function was to manage and oversee the operation of the Fashion and Personal Care, GSR Toys, and Home Furnishing Departments of Uniwide, to ensure its continuous profitability as well as to see to it that the

established company policies and procedures were properly complied with and implemented in her departments.3

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

Unsatisfied, Apduhan sent another Memorandum7 dated March 30, 1998 to private respondent where Apduhan claimed that the answers given by the private respondent in her March 23, 1998 letter were all hypothetical and did not answer directly the allegations attributed to her.8 Apduhan elaborated the incidents contained in the March 15, 1998 Memorandum.

On June 30, 1998, Apduhan sent another Memorandum9 seeking from the private respondent an explanation regarding the incidents reported by Uniwide employees and security personnel for alleged irregularities committed by the private respondent such as allowing the entry of unauthorized persons inside a restricted area during non-office hours, falsification of or inducing another employee to falsify personnel or company records, sleeping and allowing a non-employee to sleep inside the private office, unauthorized search and bringing out of company records, purchase of damaged home furnishing items without the approval from superior, taking advantage of buying damaged items in large quantity, alteration of approval slips for the purchase of damaged items and abandonment of work.10 In a letter11 dated July 9, 1998, private respondent answered the allegations made against her.

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

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

On August 1, 1998, private respondent reported the confrontation between her and Apduhan to the Central Police District.20 Likewise, private respondent was able to obtain from Dr. Zambrano the corrected certification21together with the clarification that the name "Amalia Menia" written on the July 30, 1998 certification referred to Amalia Kawada.22

Thereafter, counsel for private respondent sent a letter23 dated August 1, 1998 to Apduhan stating that the latter's alleged continued harassment and vexation against private respondent created a hostile work environment which had become life threatening, and that they had no alternative but to bring the matter to the proper forum.24

On August 2, 1998, Apduhan issued a Memorandum,25 received on the same day by Edgardo Kawada, the husband of private respondent, advising the latter of a hearing scheduled on August 12, 1998 to be held at the Uniwide Office in Quirino Highway, and warning her that failure to appear shall constitute as waiver and the case shall be submitted for decision based on available papers and evidence.26

On August 3, 1998, private respondent filed a case for illegal dismissal before the Labor Arbiter (LA).27

Counsel for private respondent sent a letter28 dated August 8, 1998 to Apduhan claiming that the August 2, 1998 Memorandum was a mere afterthought, in an attempt to justify private respondent's dismissal; and that on August 3, 1998, private respondent had already filed charges against Uniwide and Apduhan (petitioners).

On August 8, 1998, Apduhan sent a letter addressed to private respondent, which the latter received on even date, advising private respondent to report for work, as she had been absent since August 1, 1998; and warning her that upon her failure to do so, she shall be considered to have abandoned her job.29

On September 1, 1998, Apduhan issued a Memorandum30 stating that since private respondent was unable to attend the scheduled August 12, 1998 hearing, the case was evaluated on the basis of the evidence on record; and enumerating the pieces of evidence of the irregularities and violations of company rules committed by private respondent, the latter's defenses and the corresponding findings by Uniwide. Portions of the Memorandum read:

VIOLATIONS:

1. Allowing entry of Unauthorized person inside a Restricted Area during non-office hours (night-time)

x x x x

FINDINGS:

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

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

2. Falsification of or Inducing another employee to falsify personnel or company records.

x x x x

FINDINGS:

In her answer, Ms. A. Kawada again only questioned the propriety of the entries on the logbook, but there were clear indications that the violation was indeed committed as shown by the abovestated pieces of evidence.

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

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

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

x x x x

FINDINGS:

Based on the records and reports submitted, there is no doubt that the concerned employee committed such an offense. The witnesses stated their testimonies only in accordance with what they have seen and witnessed during those stated periods.

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

4. Unauthorized Search, Bringing Out and taking of Company Records, March 18, 1998 and March 20, 1998.

x x x x

FINDINGS:

It is established that 15 approval slips were taken by the employee concerned, however, only 11 approval slips were surrendered or returned.

*Violation - No. 1 Type F, Code of Discipline*

5. Purchases of Dented or Sub-standard items of Home Furnishing without approval from authorized Supervisor, February 3, 1998.

x x x x

FINDINGS:

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

6. Altering Approval slips dated January 17, 1998.

a) #1 original quantity - 7 pieces changed to 2 pieces - amount was altered from Php14.00 to Php10.00.

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

x x x x

FINDINGS:

Towards this accusation Ms. A. Kawada submitted no plausible explanation, indicating that said employee concerned might have really committed the acts complained of.

Violation of Company Rules on the proper procedure in selling of dented merchandise.

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

x x x x

FINDINGS:

There was no direct explanation submitted by Ms. A. Kawada on this. Thus, it becomes clear that Ms. Kawada had violated the company rule on No Reservation.

8. Conduct unbecoming of a manager in cornering and/or bringing large quantity of damaged items (toys, furniture, RTW, appliances and Home Furnishing items), causing demoralization among the store crew and tainting management's image to its personnel.

x x x x

FINDINGS:

The report that were submitted by the witnesses proved that Ms. Kawada made those purchases of dented or sub-standard items that were under her assigned area, without

regard for the rest of the employees who wanted to buy also, thus, using and taking advantage of her position, to the detriment of the other employees and painting a bad image of the company's managers.

9. Abandonment of work or absence for five (5) consecutive days without prior notice from any authorized company officer or higher authority.

FINDINGS:

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

*Violation - No. 2, Sec. A*

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

You are hereby directed to surrender all other documents and papers pertaining to your job, which you may have acquired and have come into your possession as a result of your employment with the company.

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

On March 9, 1999 the LA32 dismissed the complaint for lack of merit.33 Private respondent appealed the LA's decision to the National Labor Relations Commission (NLRC).

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

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

Separation Pay:

November 1981 -July 3, 1998

P13,000.00 x 16.8 yrs. = P218,400.00

Backwages:

July 31, 1998-up to the present

Moral Damages = P100,000.00

Exemplary Damages P100,000.00

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

SO ORDERED. 35

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

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

Feeling aggrieved, petitioners appealed the NLRC Decision to the CA. In the assailed Decision37 dated November 23, 2001, the CA affirmed in toto the NLRC Decision.

Hence, the present petition.38

The sole issue raised before the Court is:

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN SUSTAINING THE NLRC'S FINDING THAT PRIVATE RESPONDENT WAS CONSTRUCTIVELY DISMISSED.39

It is a well-settled rule that the jurisdiction of the Supreme Court in petitions for review on certiorari under Rule 45 of the Rules of Court is limited to reviewing errors of law, not of fact.40 The Court is not a trier of facts. In the exercise of its power of review, the findings of fact of the CA are conclusive and binding and consequently, it is not the Court's function to analyze or weigh evidence all over again.41

The foregoing rule, however, is not absolute. The Court, in Dusit Hotel Nikko v. National Union of Workers in Hotel, Restaurant and Allied Industries (NUWHRAIN),42 held that the factual findings of the NLRC as affirmed by the CA, are accorded high respect and finality unless the factual findings and conclusions of the LA clash with those of the NLRC and the CA in which case the Court will have to review the records and the arguments of the parties to resolve the factual issues and render substantial justice to the parties.43

The present case is clouded by conflict of factual perceptions. Consequently, the Court is constrained to review the factual findings of the CA which contravene the findings of facts of the LA.

The Court's Ruling

The petition is meritorious. After a thorough examination of the conflicting positions of the parties, the Court finds the records bereft of evidence to substantiate the conclusions of the NLRC and the CA that private respondent was constructively dismissed from employment.

Case law defines constructive dismissal as a cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.44

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

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

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

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

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

The July 31, 1998 confrontation where Apduhan allegedly shouted at private respondent which caused the latter's hypertension to recur and eventually caused her to collapse cannot by itself support a finding of constructive dismissal by the NLRC and the CA. Even if true, the act of Apduhan in shouting at private respondent was an isolated outburst on the part of Apduhan that did not show a clear discrimination or insensibility that would render the working condition of private respondent unbearable.

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

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

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

Private respondent's failure to report for work despite the August 8, 1998 letter sent by Apduhan to private respondent advising the latter to report for work is not sufficient to constitute abandonment. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment.56

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

In the case of Lemery Savings & Loan Bank v. National Labor Relations Commission,57 the Court held:

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

Nevertheless, the mistaken belief on the part of the employee should not lead to a drastic conclusion that he has chosen to abandon his work. x x x We cannot readily infer abandonment even if, sometime during the pendency of this case, he refused to heed

the warning given him by petitioner Dimailig while believing that he was dismissed through no fault of his.58 (Emphasis supplied)

The Court finds that petitioners were not able to establish that private respondent deliberately refused to continue her employment without justifiable reason. To repeat, the Court will not make a drastic conclusion that private respondent chose to abandon her work on the basis of her mistaken belief that she had been constructively dismissed by Uniwide.

Nonetheless, the Court agrees with the findings of the LA that the termination of private respondent was grounded on the existence of just cause under Article 282 (c) of the Labor Code59 or willful breach by the employee of the trust reposed on him by his employer or a duly authorized representative.60

Private respondent occupies a managerial position. As a managerial employee, mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal.61

In Caoile v. National Labor Relations Commission,62 the Court distinguished the treatment of managerial employees from that of rank-and-file personnel, insofar as the application of the loss of trust and confidence is concerned. The Court held:

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

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

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

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

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

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

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

However, as to the September 1, 1998 Memorandum where the private complainant was dismissed for loss of trust and confidence, the Court finds the notice of the scheduled August 12, 1998 hearing sufficient compliance with the due process requirement.

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

At this point, the Court agrees with and adopts the findings of the LA in his Decision:78

We cannot, with due respect, subscribe to complainant's [herein private respondent] position for it simply lacks evidence and that all that there is to it is seemingly a general allegation. We examined the record and as we have done it we find no acts or incidents constituting complainant's alleged "constructive dismissal". On the contrary, what is

generally existing thereat is that complainant was dismissed by the respondents [Uniwide and Apduhan] for an array of violations consisting of, but not limited to the following: allowing entry of unauthorized personnel inside a company restricted area; falsification of or inducing another employee to falsify personnel or company records; sleeping during overnight work; unauthorized search and bringing out of company records; unauthorized purchase of damaged items; alteration of approval slips for the purchase of damaged items; unduly reserving and buying of damaged items; and abandonment of work.

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

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

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

SO ORDERED.

G.R. No. 180888               September 18, 2009

ROLANDO PLACIDO and EDGARDO CARAGAY, Petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INCORPORATED, Respondents.

D E C I S I O N

CARPIO MORALES, J.:

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

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

The incident spawned the filing, on complaint of PLDT, of an Information for Qualified Theft against petitioners before the Regional Trial Court (RTC) of Quezon City, docketed as Criminal Case No. 99467.

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

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

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

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

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

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

By Decision of January 12, 2004, Labor Arbiter Catalino R. Laderas held that petitioners were illegally dismissed, there being no provision in PLDT’s rules and regulations that stripping and burning of PLDT cables and wires constitute Serious Misconduct and Dishonesty; that PLDT’s

seeming lack of urgency in taking any disciplinary action against petitioners negates the charges;10 and that dismissal is too harsh, given petitioners’ years of service and lack of previous derogatory record.

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

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

Petitioners appealed to the Court of Appeals.

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

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

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

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

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

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

The petition is bereft of merit.

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

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

Article 277 of the Labor Code provides:

x x x x

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

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

Section 2. Security of Tenure. —

x x x x

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

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

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

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him.1avvphi1

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

The abovequoted provision of Section 2(d) should not be taken to mean, however, that holding an actual hearing or conference is a condition sine qua non for compliance with the due process requirement in case of termination of employment. For the test for the fair procedure guaranteed under the above-quoted Article 277(b) of the Labor Code is not whether there has been a formal

pretermination confrontation between the employer and the employee. The "ample opportunity to be heard" standard is neither synonymous nor similar to a formal hearing. To confine the employee’s right to be heard to a solitary form narrows down that right.20

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

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

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated September 28, 2007 is AFFIRMED.

SO ORDERED.

G.R. No. 187605               April 13, 2010

TECHNOL EIGHT PHILIPPINES CORPORATION, Petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION AND DENNIS AMULAR, Respondents.

D E C I S I O N

BRION, J.:

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

THE ANTECEDENTS

The facts are summarized below.

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

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

Upon learning of the incident, Technol’s management sent to Amular and Ducay a notice of preventive suspension/notice of discharge dated May 18, 20025 advising them that their fistfight with Mendoza violated Section 1-k of Technol’s Human Resource Department (HRD) Manual. The two were given forty-eight (48) hours to explain why no disciplinary action should be taken against them for the incident. They were placed under preventive suspension for thirty (30) days, from May 19, 2002 to June 17, 2002 for Ducay, and May 21, 2002 to June 20, 2002 for Amular. Amular submitted a written statement on May 20, 2002.6

Thereafter, Amular received a notice dated June 8, 20027 informing him that Technol management will conduct an administrative hearing on June 14, 2002. He was also given two (2) days to respond in writing to the statements attached to and supporting the notice. A day before the hearing or on June 13, 2002, Amular filed a complaint for illegal suspension/constructive dismissal with a prayer for separation pay, backwages and several money claims, against Technol. Amular failed to attend the administrative hearing. On July 4, 2002, Technol sent him a notice of dismissal.8

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

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

THE COMPULSORY ARBITRATION DECISIONS

On November 18, 2003, Executive Labor Arbiter Salvador V. Reyes rendered a decision10 finding that Amular’s preventive suspension and subsequent dismissal were illegal. He ruled that Amular’s preventive suspension was based solely on unsubscribed written statements executed by Mendoza, Rogelio R. Garces and Mary Ann Palma (subscribed only on August 8, 2002) and that Mendoza, Amular and Ducay had settled their differences even before Amular was placed under preventive suspension. With respect to Amular’s dismissal, the Arbiter held that Technol failed to afford him procedural due process since he was not able to present his side because he had filed a case before the National Labor Relations Commission (NLRC) at the time he was called to a hearing; Technol also failed to substantiate its allegations against Amular; the fistfight occurred around 200 to 300 meters away from the work area and it happened after office hours. Arbiter Reyes awarded Amular separation pay (since he did not want to be reinstated), backwages, 13th month pay, service incentive leave pay and attorney’s fees in the total amount of P158,987.70.

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

THE CA DECISION

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

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

THE PETITION

Technol posits that the CA gravely erred in ruling that Amular was illegally dismissed, contending that Amular was discharged for violation of Section 1-k of its HRD Manual which penalizes the commission of a crime against a co-employee. It submits that Section 1-k of the HRD Manual is a reasonable company rule issued pursuant to its management prerogative. It maintains that the case should have been examined from the perspective of whether the company rule is reasonable and not on the basis of where and when the act was committed, or even whether it caused damage to the company. It adds that the manual does not distinguish whether the crime was committed inside or outside work premises or during or after office hours. It insists that if the rule were otherwise, any employee who wishes to harm a co-employee can just wait until the co-employee is outside the company premises to inflict harm upon him, and later argue that the crime was committed outside work premises and after office hours. It submits that the matter assumes special and utmost significance in this case because Amular inflicted physical injuries on a supervisor. In any event, Technol argues that even if the misconduct was committed outside company premises, the perpetrator can still be disciplined as long as the offense was work-related, citing Oania v. NLRC19 and Tanala v. NLRC20 in support of its position.

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

the fact that Amular’s liability should be mitigated because the fight "was nipped in the bud." It submits that Mendoza had already sustained grave injuries when the mauling was stopped.

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

On the rejection by the CA of the statements of Amular’s co-employees regarding the incident, Technol contends that the statements of the witnesses, together with Amular’s admission, constitute substantial evidence of guilt. It points out that the statement of Mendoza on the matter submitted during the company investigation and before the labor arbiter was not a "stand alone" statement; Mendoza’s statement was corroborated by the statements of Rogelio R. Garces and Mary Ann Palma, verified under oath in the reply22 it submitted to the arbiter. The statements were all in their handwriting, indicating that they were not pro forma or prepared on command; a medical certificate23 and a barangay report24 were likewise submitted.

Technol likewise disputes the NLRC’s conclusion that Amular was discriminated against and unfairly treated because he was the only one preventively suspended after the mauling incident. It maintains that from the records of the case and as admitted by Amular himself in his position paper,25 his co-employee Ducay was also preventively suspended.26 That Mendoza was not similarly placed under preventive suspension was considered by Technol as an exercise of its management prerogative, since the circumstances surrounding the incident indicated the existence of a reasonable threat to the safety of Amular’s co-employees and that Mendoza appeared to be the victim of Amular’s and Ducay’s assault.

THE CASE FOR AMULAR

In his Comment filed on August 12, 2009,27 Amular asks that the petition be dismissed for "utter lack of merit." He admits that the mauling incident happened, but claims however that on April 18, 2002, the Technol’s management called Mendoza, Ducay, and him to a meeting, asked them to explain their sides and thereafter requested them to settle their differences; without hesitation, they agreed to settle and even shook hands afterwards. He was therefore surprised that on May 18, 2002, he received a memorandum from Technol’s HRD charging him and his co-employee Ducay for the incident. Without waiting for an explanation, Technol’s management placed him under preventive suspension, but not Ducay. Adding insult to injury, when Amular followed up his case while on preventive suspension, he was advised by the HRD manager to simply resign and accept management’s offer ofP22,000.00, which offer was reiterated during the mandatory conference before the labor arbiter.

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

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

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

THE RULING OF THE COURT

The Procedural Issue

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

The Merits of the Case

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

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

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

From the records, Ducay appeared to have cooperated with Amular in the violent confrontation with Mendoza. Ducay, however, resigned on June 7, 2002 a week before the filing of the

complaint.34 Hence, Technol did not act against him – a move that is within its prerogative to make.1avvphi1

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

Amular and Ducay point to Mendoza as the proximate cause of the fight because he challenged them to a one-on-one (isa-isa lang) bout.38 Looking back at the reason why Amular and Ducay were at the mall in the first place, this attributed causation hardly makes sense. To reiterate, they were purposely there to confront Mendoza about their work-related problem. They waited for him at the place where they expected him to be. When Mendoza appeared, they accosted him and put into motion the entire sorry incident.

Under these circumstances, Amular undoubtedly committed a misconduct or exhibited improper behavior that constituted a valid cause for his dismissal under the law39 and jurisprudential standards.40 The circumstances of his misdeed, to our mind, rendered him unfit to continue working for Technol; guilt is not diminished by his claim that Technol’s management called the three of them to a meeting, and asked them to explain their sides and settle their differences, which they did.41 Mendoza significantly denied the alleged settlement, maintaining that while they were summoned by De Leon after the incident, he could not shake hands and settle with Amular and Ducay since they did not even apologize or ask forgiveness for what they did.42 We do not find Mendoza’s denial of Amular’s claim unusual as Mendoza would not have stood his ground in this case if a settlement had previously been reached. That a meeting had taken place does not appear disputed, but a settlement cannot be inferred simply because a meeting took place.

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

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

The Due Process Issue

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

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

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

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

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

SO ORDERED.

G.R. NO. 160339               March 14, 2008

OSCAR P. GARCIA and ALEX V. MORALES, Petitioners, vs.MALAYAN INSURANCE CO., INC. and NATIONAL LABOR RELATIONS COMMISSION,* Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

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

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

The facts are of record.

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

On December 29, 1999, private respondent issued to petitioner Garcia an Inter-Office Memorandum3 giving him 24 hours to explain his involvement in the theft of company property, consisting of diskettes, logbooks and other documents of the Risk Analysis Section, and to return the same. Private respondent also issued to petitioner Morales a similar memorandum but with additional instruction for his preventive suspension for 30 days pending investigation.4

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

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

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

1) Took possession of the subject diskettes and logbooks without any permission from the company;

2) Instigated the commission of the said unlawful act; and

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

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

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

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

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

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

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

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

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

dated November 20, 2000.

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

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

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

I

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

II

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

III

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

IV

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

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

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

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

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

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

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

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

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

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

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

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

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

3. Noon Disyembre 29, 1999 bandang alas-kuwatro kuwarenta y singko ng hapon (4:45 p.m.), ako ay kasalukuyang naghuhugas ng mga plato sa Comfort Room ng 5th floor ng ETY Building nang ako ay lapitan ni Alex Morales ng Risk Analysis Department at inutusang pumunta sa Farmacia Rubi, dito rin sa Quintin Paredes, Binondo para kunin ang isang bagay sa lalaking may bigote.23

By no means can it be extrapolated from the foregoing statement that petitioner Morales knew the contents of the parcel - whether or not these were the stolen company properties - or the purpose for getting the parcel from a third party. In fact, the succeeding paragraphs in the statement disclose that it was that third party who instructed De Guzman to call petitioner Garcia, who, in turn, disclosed the nature of the contents of the parcel and gave out instruction on what steps to take to bring said parcel back into the office building and to make it appear that it was just misplaced. Nowhere does it appear that petitioner Morales had knowledge of what was to happen or had participation in it. It is difficult then to connect petitioner Morales to the theft or the attempt to cover it up merely on the basis of his having instructed De Guzman to get a parcel from another person.

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

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

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

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

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

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

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

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

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

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

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

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

No costs.

SO ORDERED.

G.R. No. 179563               April 30, 2009

BACOLOD-TALISAY REALTY AND DEVELOPMENT CORPORATION, MR. MARIO GONZAGA in his capacity as President of Bacolod Realty and Development Corporation, AND MR. ERNESTO ALLEN LACSON, JR. in his capacity as Administrator of Bacolod Realty and Development, Corporation, Petitioner, vs.ROMEO DELA CRUZ, Respondent.

D E C I S I O N

CARPIO-MORALES, J.:

From 1980 up to 1997, Romeo de la Cruz was employed at the Hacienda Gloria, a farm owned and managed by petitioner Bacolod-Talisay Realty and Development Corporation (BTRD). He was dismissed on July 3, 1997 at which time he was holding the position of overseer, in charge of the work of the laborers, checking their attendance, reporting the number of hours worked by each laborer for payroll purposes, checking in-coming and out-going cargo, and selling and receiving payments for seedpieces and canepoints. He was also entrusted with farm equipment and other farm property.

He was dismissed on charges of payroll padding, selling canepoints without the knowledge and consent of management and misappropriating the proceeds thereof, and renting out BTRD’s tractor for use in another farm and misappropriating the proceeds thereof.

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

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

In their Position Paper, petitioners claimed that as a result of the investigation of respondent’s questioned acts, it was discovered that there were farm workers whose names were entered in the payroll even if they did not render services and the corresponding wages were not received by them;

and while respondent committed to return the money intended for wages of those workers who rendered no services, he did not return them.

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

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

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

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

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

I

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

II

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

III

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

That the Court of Appeals went on to give due course to respondent’s petition despite the lack of verification in respondent’s appeal before the NLRC is not erroneous. Lack of verification is not a fatal defect. Verification is only a formal, not a jurisdictional requirement.11 It could easily be corrected by directing compliance therewith,12 its purpose being simply to secure an assurance that

the allegations of the petition (or complaint) have been made in good faith, or are true and correct, not merely speculative.13

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

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

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

2. Petitioner Lacson’s affidavit;15

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

4. Joint affidavit of Federico Serie, Jr. (Serie), Jonathan Quilla (Quilla), Eddie Sausa (Sausa), and Roberto Tortogo (Tortogo) claiming that they refused to sign the payroll which respondent prepared because it indicated that they received P256 although they received only P71;17

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

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

7. Affidavit of Jose Racel Magbanua (Magbanua) stating that he saw respondent allowing the use of the hacienda’s tractor in another farm and receiving rent therefrom;20

8. Affidavit of Rodolfo Cañeso (Cañeso) stating that he saw respondent selling pieces of patdan and drammy;21 and

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

The above-listed documentary evidence of petitioner indubitably establishes that respondent committed payroll padding, sold canepoints without the knowledge and consent of management and misappropriated the proceeds thereof, and rented tractor to another farm and misappropriated the

rental payments therefor. These acts constitute willful breach by the employee of the trust reposed in him by his employer ─ a ground for termination of employment.23

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

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

The Court of Appeals correctly held though that petitioners did not comply with the proper procedure in dismissing respondent. In other words, petitioners failed to afford respondent due process by failing to comply with the twin notice requirement in dismissing him, viz: 1) a first notice to apprise him of his fault, and 2) a second notice to him that his employment is being terminated.lawphi1.net

The letter dated June 3, 1997 sent to respondent was a letter of suspension. It did not comply with the required first notice,28 the purpose of which is to apprise the employee of the cause for termination and to give him reasonable opportunity to explain his side.29

The confrontation before the barangay council did not constitute the first notice ─ to give the employee ample opportunity to be heard with the assistance of counsel, if he so desires.30 Hearings before the barangay council do not afford the employee ample opportunity to be represented by counsel if he so desires because Section 415 of the Local Government Code mandates that "[i]n all katarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or his representatives, except for minors and incompetents who may be assisted by their next-of-kin who are not lawyers."

The requirement of giving respondent the first notice not having been complied with, discussions of whether the second notice was complied with is rendered unnecessary.

In fine, while the dismissal of respondent was for a just cause, the procedure in effecting the same was not observed.

WHEREFORE, the assailed Decision of the appellate court is VACATED and another is rendered ORDERING petitioners to, in light of the foregoing discussions, PAY respondent the sum of P30,000 as nominal damages.

SO ORDERED.

G.R. No. 181974               February 1, 2012

LYNVIL FISHING ENTERPRISES, INC. and/or ROSENDO S. DE BORJA, Petitioners, vs.ANDRES G. ARIOLA, JESSIE D. ALCOVENDAS, JIMMY B. CALINAO AND LEOPOLDO G. SEBULLEN,Respondents.

D E C I S I O N

PEREZ, J.:

Before the Court is a Petition for Review on Certiorari1 of the Decision2 of the Fourteenth Division of the Court of Appeals in CA-G.R. SP No. 95094 dated 10 September 2007, granting the Writ of Certiorari prayed for under Rule 65 of the 1997 Revised Rules of Civil Procedure by herein respondents Andres G. Ariola, Jessie D. Alcovendas, Jimmy B. Calinao and Leopoldo Sebullen thereby reversing the Resolution of the National Labor Relations Commission (NLRC). The dispositive portion of the assailed decision reads:

WHEREFORE, premises considered, the Decision dated March 31, 2004 rendered by the National Labor Relations Commission is hereby REVERSED and SET ASIDE. In lieu thereof, the Decision of the Labor Arbiter is hereby REINSTATED, except as to the award of attorney’s fees, which is ordered DELETED.3

The version of the petitioners follows:

1. Lynvil Fishing Enterprises, Inc. (Lynvil) is a company engaged in deep-sea fishing, operating along the shores of Palawan and other outlying islands of the Philippines.4 It is operated and managed by Rosendo S. de Borja.

2. On 1 August 1998, Lynvil received a report from Romanito Clarido, one of its employees, that on 31 July 1998, he witnessed that while on board the company vessel Analyn VIII, Lynvil employees, namely: Andres G. Ariola (Ariola), the captain; Jessie D. Alcovendas (Alcovendas), Chief Mate; Jimmy B. Calinao (Calinao), Chief Engineer; Ismael G. Nubla (Nubla), cook; Elorde Bañez (Bañez), oiler; and Leopoldo D. Sebullen (Sebullen), bodegero, conspired with one another and stole eight (8) tubs of "pampano" and "tangigue" fish and delivered them to another vessel, to the prejudice of Lynvil.5

3. The said employees were engaged on a per trip basis or "por viaje" which terminates at the end of each trip. Ariola, Alcovendas and Calinao were managerial field personnel while the rest of the crew were field personnel.6

4. By reason of the report and after initial investigation, Lynvil’s General Manager Rosendo S. De Borja (De Borja) summoned respondents to explain within five (5) days why they should not be dismissed from service. However, except for Alcovendas and Bañez,7 the respondents refused to sign the receipt of the notice.

5. Failing to explain as required, respondents’ employment was terminated.

6. Lynvil, through De Borja, filed a criminal complaint against the dismissed employees for violation of P.D. 532, or the Anti-Piracy and Anti-Highway Robbery Law of 1974 before the Office of the City Prosecutor of Malabon City.8

7. On 12 November 1998, First Assistant City Prosecutor Rosauro Silverio found probable cause for the indictment of the dismissed employees for the crime of qualified theft9 under the Revised Penal Code.

On the other hand, the story of the defense is:

1. The private respondents were crew members of Lynvil’s vessel named Analyn VIII.10

2. On 31 July 1998, they arrived at the Navotas Fishport on board Analyn VIII loaded with 1,241 bañeras of different kinds of fishes. These bañeras were delivered to a consignee named SAS and Royale.11

The following day, the private respondents reported back to Lynvil office to inquire about their new job assignment but were told to wait for further advice. They were not allowed to board any vessel.12

3. On 5 August 1998, only Alcovendas and Bañez received a memorandum from De Borja ordering them to explain the incident that happened on 31 July 1998. Upon being informed about this, Ariola, Calinao, Nubla and Sebullen went to the Lynvil office. However, they were told that their employments were already terminated.13

Aggrieved, the employees filed with the Arbitration Branch of the National Labor Relations Commission-National Capital Region on 25 August 1998 a complaint for illegal dismissal with claims for backwages, salary differential reinstatement, service incentive leave, holiday pay and its premium and 13th month pay from 1996 to1998. They also claimed for moral, exemplary damages and attorney’s fees for their dismissal with bad faith.14

They added that the unwarranted accusation of theft stemmed from their oral demand of increase of salaries three months earlier and their request that they should not be required to sign a blank payroll and vouchers.15

On 5 June 2002, Labor Arbiter Ramon Valentin C. Reyes found merit in complainants’ charge of illegal dismissal.16 The dispositive portion reads:

WHEREFORE, premises considered, judgment is hereby rendered finding that complainants were illegally dismissed, ordering respondents to jointly and severally pay complainants (a) separation pay at one half month pay for every year of service; (b) backwages; (c) salary differential; (d) 13th month pay; and (e) attorney’s fees, as follows:

"1) Andres AriolaBackwages P234,000.00

(P6,500.00 x 36 = P234,000.00)

Separation Pay – P74,650.00

13th Month Pay – P6,500.00

P325,250.00

"2) Jessie AlcovendasBackwages P195,328.00

(P5,148.00 x 36 = P195,328.00)

Separation Pay – P44,304.00

13th Month Pay – 5,538.00

Salary Differential – 1,547.52

P246,717.52

"3) Jimmy CalinaoBackwages P234,000.00

(P6,500.00 x 36 = P234,000.00)

Separation Pay – 55,250.00

13th Month Pay – P6,500.00

P295,700.00

"4) Leopoldo Sebullen

Backwages P154,440.00

(P4, 290.00 x 36 = P154,440.00)

Separation Pay – P44,073.00

13th Month Pay – 2,473.12

Salary Differential – 4,472.00

P208,455.12

"5) Ismael NublaBackwages P199,640.12

Separation Pay – P58,149.00

13th Month Pay – 2,473.12

Salary Differential – P5,538.00

P265, 28.12

TOTAL P 1, 341, 650.76

All other claims are dismissed for lack of merit."17

The Labor Arbiter found that there was no evidence showing that the private respondents received the 41 bañeras of "pampano" as alleged by De Borja in his reply-affidavit; and that no proof was presented that the 8 bañeras of pampano [and tangigue] were missing at the place of destination.18

The Labor Arbiter disregarded the Resolution of Assistant City Prosecutor Rosauro Silverio on the theft case. He reasoned out that the Labor Office is governed by different rules for the determination of the validity of the dismissal of employees.19

The Labor Arbiter also ruled that the contractual provision that the employment terminates upon the end of each trip does not make the respondents’ dismissal legal. He pointed out that respondents and Lynvil did not negotiate on equal terms because of the moral dominance of the employer.20

The Labor Arbiter found that the procedural due process was not complied with and that the mere notice given to the private respondents fell short of the requirement of "ample opportunity" to present the employees’ side.21

On appeal before the National Labor Relations Commission, petitioners asserted that private respondents were only contractual employees; that they were not illegally dismissed but were accorded procedural due process and that De Borja did not commit bad faith in dismissing the employees so as to warrant his joint liability with Lynvil.22

On 31 March 2004, the NLRC reversed and set aside the Decision of the Labor Arbiter. The dispositive portion reads:

WHEREFORE, judgment is hereby rendered REVERSING AND SETTING ASIDE the Decision of the Labor Arbiter a quo and a new one entered DISMISSING the present complaints for utter lack of merit;

However as above discussed, an administrative fine of PhP5,000.00 for each complainant, Andres Ariola, Jessie Alcovendas, Jimmy Canilao, Leopoldo Sebullen and Ismael Nobla or a total of PhP25,000.00 is hereby awarded.23

The private respondents except Elorde Bañez filed a Petition for Certiorari24 before the Court of Appeals alleging grave abuse of discretion on the part of NLRC.

The Court of Appeals found merit in the petition and reinstated the Decision of the Labor Arbiter except as to the award of attorney’s fees. The appellate court held that the allegation of theft did not warrant the dismissal of the employees since there was no evidence to prove the actual quantities of the missing kinds of fish loaded to Analyn VIII.25 It also reversed the finding of the NLRC that the dismissed employees were merely contractual employees and added that they were regular ones performing activities which are usually necessary or desirable in the business and trade of Lynvil. Finally, it ruled that the two-notice rule provided by law and jurisprudence is mandatory and non-compliance therewith rendered the dismissal of the employees illegal.

The following are the assignment of errors presented before this Court by Lynvil:

I

THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THE ESTABLISHED DOCTRINE LAID DOWN IN NASIPIT LUMBER COMPANY V. NLRC HOLDING THAT THE FILING OF A CRIMINAL CASE BEFORE THE PROSECUTOR’S OFFICE CONSTITUTES SUFFICIENT BASIS FOR A VALID TERMINATION OF EMPLOYMENT ON THE GROUNDS OF SERIOUS MISCONDUCT AND/OR LOSS OF TRUST AND CONFIDENCE.

II

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE TERMINATION OF RESPONDENTS’ EMPLOYMENT WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

III

THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THAT THE RESPONDENTS’ EMPLOYMENT, IN ANY EVENT, WERE CONTRACTUAL IN NATURE BEING ON A PER VOYAGE BASIS. THUS, THEIR RESPECTIVE EMPLOYMENT TERMINATED AFTER THE END OF EACH VOYAGE

IV

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENTS WERE NOT ACCORDED PROCEDURAL DUE PROCESS.

V

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENTS ARE ENTITLED TO THE PAYMENT OF THEIR MONEY CLAIMS.

VI

THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THAT PETITIONER ROSENDO S. DE BORJA IS NOT JOINTLY AND SEVERALLY LIABLE FOR THE JUDGMENT WHEN THERE WAS NO FINDING OF BAD FAITH.26

The Court’s Ruling

The Supreme Court is not a trier of facts. Under Rule 45,27 parties may raise only questions of law. We are not duty-bound to analyze again and weigh the evidence introduced in and considered by the tribunals below. Generally when supported by substantial evidence, the findings of fact of the CA are conclusive and binding on the parties and are not reviewable by this Court, unless the case falls under any of the following recognized exceptions:

(1) When the conclusion is a finding grounded entirely on speculation, surmises and conjectures;

(2) When the inference made is manifestly mistaken, absurd or impossible;

(3) Where there is a grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When the findings of fact are conflicting;

(6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee;

(7) When the findings are contrary to those of the trial court;

(8) When the findings of fact are conclusions without citation of specific evidence on which they are based;

(9) When the facts set forth in the petition as well as in the petitioners' main and reply briefs are not disputed by the respondents; and

(10) When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record. (Emphasis supplied)28

The contrariety of the findings of the Labor Arbiter and the NLRC prevents reliance on the principle of special administrative expertise and provides the reason for judicial review, at first instance by the appellate court, and on final study through the present petition.

In the first assignment of error, Lynvil contends that the filing of a criminal case before the Office of the Prosecutor is sufficient basis for a valid termination of employment based on serious misconduct and/or loss of trust and confidence relying on Nasipit Lumber Company v. NLRC.29

Nasipit is about a security guard who was charged with qualified theft which charge was dismissed by the Office of the Prosecutor. However, despite the dismissal of the complaint, he was still terminated from his employment on the ground of loss of confidence. We ruled that proof beyond reasonable doubt of an employee's misconduct is not required when loss of confidence is the ground for dismissal. It is sufficient if the employer has "some basis" to lose confidence or that the employer has reasonable ground to believe or to entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position.30 It added that the dropping of the qualified theft charges against the respondent is not binding upon a labor tribunal.31

In Nicolas v. National Labor Relations Commission,32 we held that a criminal conviction is not necessary to find just cause for employment termination. Otherwise stated, an employee’s acquittal in a criminal case, especially one that is grounded on the existence of reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts inimical to the employer’s interests.33 In the reverse, the finding of probable cause is not followed by automatic adoption of such finding by the labor tribunals.

In other words, whichever way the public prosecutor disposes of a complaint, the finding does not bind the labor tribunal.

Thus, Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft the Labor Arbiter must follow the finding as a valid reason for the termination of respondents’ employment. The proof required for purposes that differ from one and the other are likewise different.

Nonetheless, even without reliance on the prosecutor’s finding, we find that there was valid cause for respondents’ dismissal.

In illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid or authorized cause.34

Just cause is required for a valid dismissal. The Labor Code35 provides that an employer may terminate an employment based on fraud or willful breach of the trust reposed on the employee. Such breach is considered willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must also be based on substantial evidence and not on the employer’s whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer. In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate matters, such as the handling or care and protection of the property and assets of the employer. The betrayal of this trust is the essence of the offense for which an employee is penalized.36

Breach of trust is present in this case.

We agree with the ruling of the Labor Arbiter and Court of Appeals that the quantity of tubs expected to be received was the same as that which was loaded. However, what is material is the kind of fish loaded and then unloaded. Sameness is likewise needed.

We cannot close our eyes to the positive and clear narration of facts of the three witnesses to the commission of qualified theft. Jonathan Distajo, a crew member of the Analyn VIII, stated in his letter addressed to De Borja37dated 8 August 1998, that while the vessel was traversing San Nicolas, Cavite, he saw a small boat approach them. When the boat was next to their vessel, Alcovendas went inside the stockroom while Sebullen pushed an estimated four tubs of fish away from it. Ariola, on the other hand, served as the lookout and negotiator of the transaction. Finally, Bañez and Calinao helped in putting the tubs in the small boat. He further added that he received P800.00 as his share for the transaction. Romanito Clarido, who was also on board the vessel, corroborated the narration of Distajo on all accounts in his 25 August 1998 affidavit.38 He added that Alcovendas told him to keep silent about what happened on that day. Sealing tight the credibility of the narration of theft is the affidavit39 executed by Elorde Bañez dated 3 May 1999. Bañez was one of the dismissed employees who actively participated in the taking of the tubs. He clarified in the affidavit that the four tubs taken out of the stockroom in fact contained fish taken from the eight tubs. He further stated that Ariola told everyone in the vessel not to say anything and instead file a labor case against the management. Clearly, we cannot fault Lynvil and De Borja when it dismissed the employees.

The second to the fifth assignment of errors interconnect.

The nature of employment is defined in the Labor Code, thus:

Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

Lynvil contends that it cannot be guilty of illegal dismissal because the private respondents were employed under a fixed-term contract which expired at the end of the voyage. The pertinent provisions of the contract are:

xxxx

1. NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon sa patakarang "por viaje" na magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila;

xxxx

1. NA ako ay nakipagkasundo na babayaran ang aking paglilingkod sa paraang "por viaje" sa halagang P__________ isang biyahe ng kabuuang araw xxxx.40

Lynvil insists on the applicability of the case of Brent School,41 to wit:

Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the employee's right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent security of tenure. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences.

Contrarily, the private respondents contend that they became regular employees by reason of their continuous hiring and performance of tasks necessary and desirable in the usual trade and business of Lynvil.

Jurisprudence,42 laid two conditions for the validity of a fixed-contract agreement between the employer and employee:

First, the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or

Second, it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.43

Textually, the provision that: "NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon sa patakarang "por viaje" na magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila" is for a fixed period of employment. In the context, however, of the facts that: (1) the respondents were doing tasks necessarily to Lynvil’s fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more than ten years, the clear intention is to go around the security of tenure of the respondents as regular employees. And respondents are so by the express provisions of the second paragraph of Article 280, thus:

xxx Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

The same set of circumstances indicate clearly enough that it was the need for a continued source of income that forced the employees’ acceptance of the "por viaje" provision.

Having found that respondents are regular employees who may be, however, dismissed for cause as we have so found in this case, there is a need to look into the procedural requirement of due process in Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code. It is required that the employer furnish the employee with two written notices: (1) a written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; and (2) a written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

From the records, there was only one written notice which required respondents to explain within five (5) days why they should not be dismissed from the service. Alcovendas was the only one who signed the receipt of the notice. The others, as claimed by Lynvil, refused to sign. The other employees argue that no notice was given to them. Despite the inconsistencies, what is clear is that no final written notice or notices of termination were sent to the employees.

The twin requirements of notice and hearing constitute the elements of [due] process in cases of employee's dismissal. The requirement of notice is intended to inform the employee concerned of the employer's intent to dismiss and the reason for the proposed dismissal. Upon the other hand, the

requirement of hearing affords the employee an opportunity to answer his employer's charges against him and accordingly, to defend himself therefrom before dismissal is effected.44 Obviously, the second written notice, as indispensable as the first, is intended to ensure the observance of due process.

Applying the rule to the facts at hand, we grant a monetary award of P50,000.00 as nominal damages, this, pursuant to the fresh ruling of this Court in Culili v. Eastern Communication Philippines, Inc.45 Due to the failure of Lynvil to follow the procedural requirement of two-notice rule, nominal damages are due to respondents despite their dismissal for just cause.

Given the fact that their dismissal was for just cause, we cannot grant backwages and separation pay to respondents. However, following the findings of the Labor Arbiter who with the expertise presided over the proceedings below, which findings were affirmed by the Court of Appeals, we grant the 13th month pay and salary differential of the dismissed employees.

Whether De Borja is jointly and severally liable with Lynvil

As to the last issue, this Court has ruled that in labor cases, the corporate directors and officers are solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith.46Indeed, moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy.

It has also been discussed in MAM Realty Development Corporation v. NLRC47 that:

x x x A corporation being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them, acting as such corporate agents, are not theirs but the direct accountabilities of the corporation they represent. True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases:

1. When directors and trustees or, in appropriate cases, the officers of a corporation:

xxx

(b) act in bad faith or with gross negligence in directing the corporate affairs;

x x x 48

The term "bad faith" contemplates a "state of mind affirmatively operating with furtive design or with some motive of self-interest or will or for ulterior purpose."491âwphi1

We agree with the ruling of both the NLRC and the Court of Appeals when they pronounced that there was no evidence on record that indicates commission of bad faith on the part of De Borja. He is the general manager of Lynvil, the one tasked with the supervision by the employees and the operation of the business. However, there is no proof that he imposed on the respondents the "por viaje" provision for purpose of effecting their summary dismissal.

WHEREFORE, the petition is partially GRANTED. The 10 September 2007 Decision of the Court of Appeals in CA-G.R. SP No. 95094 reversing the Resolution dated 31 March 2004 of the National Labor Relations Commission is hereby MODIFIED. The Court hereby rules that the employees were dismissed for just cause by Lynvil Fishing Enterprises, Inc. and Rosendo S. De Borja, hence, the reversal of the award for backwages and separation pay. However, we affirm the award for 13th month pay, salary differential and grant an additional P50,000.00 in favor of the employees representing nominal damages for petitioners’ non-compliance with statutory due process. No cost.

SO ORDERED.

G.R. No. 173189               February 13, 2013

JONATHAN I. SANG-AN, Petitioner, vs.EQUATOR KNIGHTS DETECTIVE AND SECURITY AGENCY, INC., Respondents.

D E C I S I O N

BRION, J.:

Before the Court is the petition for review on certiorari1 filed by petitioner Jonathan I. Sang-an assailing the decision2 dated September 29, 2005 and the resolution3 dated May 29, 2006 of the Court of Appeals (CA) in CA-G.R. SP. No. 86677. TheCA set aside the decision4 dated December 15, 2003 of the National Labor Relations Commission (NLRC) and reinstated the decision5 dated July 30, 200 I of Labor Arbiter Geoffrey P. Villahermosa(LA).

The Facts

Jonathan was the Assistant Operation Manager of respondent Equator Knights Detective and Security Agency, Inc. (Equator). He was tasked, among others, with the duty of assisting in the operations of the security services; he was also in charge of safekeeping Equator’s firearms.

On April 21, 2001, Equator discovered that two firearms were missing from its inventory. The investigation revealed that it was Jonathan who might have been responsible for the loss.6 On April 24, 2001, Jonathan wastemporarily suspended from work pending further investigation.

On May 8, 2001, while Jonathan was under suspension, a security guard from Equator was apprehended by policemen for violating the Commission on Elections’ gun ban rule. The security guard stated in his affidavit7 thatthe unlicensed firearm had been issued to him by Jonathan.

On May 24, 2001, Jonathan filed with the NLRC a complaint for illegal suspension with prayer for reinstatement.8 In his position paper, however, he treated his case as one for illegal dismissal and alleged that he had been denied due process when he was dismissed.9 Equator, on the other hand, argued that Jonathan’s dismissal was not illegal but was instead for a just cause under Article 282 of the Labor Code.10

On July 30, 2001, the LA rendered a decision11 dismissing the complaint. It declared that no illegal dismissal took place as Jonathan’s services were terminated pursuant to a just cause. The LA found that Jonathan was dismissed due to the two infractions he committed:

The basis for the termination of the complainant was first, when he was suspended when he issued a firearm [to] a security guard and then replaced it with another one, then took the respondent[’s] firearm with him and since then both firearms were lost. x x x.

x x x x

His second offense which resulted in his being terminated was when he issued an unlicensed firearm to a Security Guard stationed in one of the business establishment[s] in Bais City which is a client of the respondents.

x x x x

WHEREFORE, in the light of the foregoing, judgment is hereby rendered DISMISSING this case for lack of legal and factual basis.12

Jonathan appealed the LA’s decision to the NLRC, contending that no charge had been laid against him; there was no hearing or investigation of any kind; and he was not given any chance or opportunity to defend himself.

The NLRC sustained the findings of the LA that there had been just cause for his dismissal. However, it found that Jonathan had been denied his right to due process when he was dismissed. It held that Equator’s letter informing him of his temporary suspension until further notice did not satisfy the requirements of due process for a valid dismissal. Thus, the NLRC modified the LA’s decision and ordered Equator to pay Jonathan backwages from April 24, 2001 until the date of the NLRC’s decision. Equator moved for reconsideration but the NLRC denied the motion, prompting the filing of a petition for certiorari under Rule 65 of the Rules of Court with the CA. Equator argued that the NLRC committed grave abuse of discretion when it found that Jonathan had been denied procedural due process.

The CA reversed the decision of the NLRC, finding that Equator substantially complied with the procedural requirements of due process. It found that the letter given to Jonathan did not mean that he had been dismissed; rather, he was only suspended – the very reason for the case for illegal suspension Jonathan filed before the LA.1âwphi1

The CA found that Jonathan filed his complaint for illegal suspension on May 2, 2001. During the pendency of the illegal suspension case before the LA, Jonathan committed another offense on May 8, 2001 when he issued the unlicensed firearm to Equator’s security guard. The CA found that Equator’s June 7, 2001 position paper brought Jonathan’s second offense before the LA for resolution; thus, Jonathan was not denied due process. The CA reinstated the LA’s decision dismissing Jonathan’s complaint. Jonathan filed a motion for reconsideration which the CA denied. He thereafter filed the present petition.

The Parties’ Arguments

Jonathan contends that when Equator filed a petition for certiorari under Rule 65 of the Rules of Court alleging grave abuse of discretion by the NLRC, it failed to post a cash or surety bond as required by Article 223 of the Labor Code. Without complying with this condition, the petition for certiorari should have been dismissed outright. Also, Jonathan contends that the CA’s findings of fact are contrary to the findings of fact by the NLRC. Since the findings of fact of quasi-judicial agencies are accorded respect and finality, he argues that the NLRC’s decision must be sustained.

Equator, on the other hand, submits that the rule on posting of cash or surety bond as required by Article 223 of the Labor Code is not applicable in a petition for certiorari under Rule 65 of the Rules of Court. It also submits that both the LA and the NLRC concur in finding just cause for the dismissal of Jonathan; hence, Jonathan’s subsequent dismissal is valid.

The Issues

Given the parties’ arguments, the case poses the following issues for the Court’s resolution:

1. whether the posting of a cash or surety bond is required for the filing of a petition for certiorari under Rule 65 of the Rules of Court with the CA; and

2. whether Jonathan was validly dismissed.

The Court’s Ruling

We find the petition partially meritorious.

A cash/surety bond is not needed in a Petition for Certiorari under Rule 65

The requirement of a cash or surety bond as provided under Article 223 of the Labor Code only applies to appeals from the orders of the LA to the NLRC. It does not apply to special civil actions such as a petition forcertiorari under Rule 65 of the Rules of Court. In fact, nowhere under Rule 65 does it state that a bond is required for the filing of the petition.

A petition for certiorari is an original and independent action and is not part of the proceedings that resulted in the judgment or order assailed before the CA. It deals with the issue of jurisdiction, and may be directed against an interlocutory order of the lower court or tribunal prior to an appeal from the judgment, or to a final judgment where there is no appeal or any plain, speedy or adequate remedy provided by law or by the rules.

Jonathan filed a complaint for illegal dismissal

Contrary to the findings of the CA, Jonathan was not merely suspended but was dismissed from the service. While Jonathan initially filed an action for illegal suspension, the position papers both parties filed treated the case as one for illegal dismissal. Jonathan alleged in his position paper that "the [r]espondent illegally SUSPENDED (DISMISSED) the x x x complainant[,]" and claimed that his dismissal lacked the required due process.13 Similarly, Equator’s position paper states that after the commission of the second offense on May 8, 2001, "[management] made up a decision to dismiss [Jonathan]."14 Even the LA treated the case before him as "a case for illegal dismissal[.]"15 In Equator’s memorandum to this Court, it admitted that Jonathan was dismissed.16

We also find that Jonathan did not file his complaint for illegal suspension on May 2, 2001. The records of the case disclose that the receiving date stamped on the complaint is May 24, 2001. The date relied upon by the CA, May 2, 2001, was the date when the complaint was subscribed and sworn to before a notary public.17 Due to the second offense committed by Jonathan on May 8, 2001, Equator decided to dismiss him. Therefore, when the LA tried the case, Jonathan had already been dismissed.

Equator failed to comply with the procedural due process

In order to validly dismiss an employee, it is fundamental that the employer observe both substantive and procedural due process – the termination of employment must be based on a just or authorized cause and the dismissal can only be effected, after due notice and hearing.18

This Court finds that Equator complied with the substantive requirements of due process when Jonathan committed the two offenses.

Article 282(A) of the Labor Code provides that an employee may be dismissed on the ground of serious misconduct or willful disobedience of the lawful orders of his employer or representative in connection with his work. Misconduct is improper or wrongful conduct; it is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct, to be serious within the meaning of the Labor Code, must be of such grave and aggravated character and not merely trivial or unimportant. It is also important that the misconduct be in connection with the employee's work to constitute just cause for his separation.19

By losing two firearms and issuing an unlicensed firearm, Jonathan committed serious misconduct. He did not merely violate a company policy; he violated the law itself (Presidential Decree No. 1866 or Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing in, Acquisition or Disposition, of Firearms, Ammunition or Explosives or Instruments Used in the Manufacture of Firearms, Ammunition or Explosives, and Imposing Stiffer Penalties for Certain Violations Thereof and for Relevant Purposes),20 and placed Equator and its employees at risk of being made legally liable. Thus, Equator had a valid reason that warranted Jonathan’s dismissal from employment as Assistant Operation Manager.

The Court, however, finds that Equator failed to observe the proper procedure in terminating Jonathan’s services. Section 2, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code provides that:

Section 2. Standard of due process: requirements of notice. – In all cases of termination of employment, the following standards of due process shall be substantially observed.

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

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

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him; and

(c) A written notice [of] termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.21

Jurisprudence has expounded on the guarantee of due process, requiring the employer to furnish the employee with two written notices before termination of employment can be effected: a first written notice that informs the employee of the particular acts or omissions for which his or her dismissal is sought, and a second written notice which informs the employee of the employer's decision to dismiss him. In considering whether the charge in the first notice is sufficient to warrant dismissal under the second notice, the employer must afford the employee ample opportunity to be heard.

A review of the records shows that Jonathan was not furnished with any written notice that informed him of the acts he committed justifying his dismissal from employment. The notice of suspension given to Jonathan only pertained to the first offense, i.e., the loss of Equator’s firearms under Jonathan’s watch.1âwphi1 With respect to his second offense (i.e., the issuance of an unlicensed firearm to Equator’s security guard – that became the basis for his dismissal), Jonathan was never given any notice that allowed him to air his side and to avail of the guaranteed opportunity to be heard. That Equator brought the second offense before the LA does not serve as notice because by then, Jonathan had already been dismissed.

In order to validly dismiss an employee, the observance of both substantive and procedural due process by the employer is a condition sine qua non. Procedural due process requires that the employee be given a notice of the charge against him, an ample opportunity to be heard, and a notice of termination.22

Since Jonathan had been dismissed in violation of his right to procedural due process but for a just cause, Equator should pay him nominal damages of P30,000.00, in accordance with Agabon v. NLRC.23 The decision of the NLRC, although final, was brought to CA on a petition for certiorari and was eventually nullified for grave abuse of discretion. When the CA ruled on the case, this Court had abandoned the ruling in Serrano v. NLRC24 in favor of the Agabon ruling.

WHEREFORE, we hereby PARTIALLY GRANT the petition. The decision dated September 29, 2005 and the resolution dated May 29, 2006 of the Court of Appeals in CA-G.R. SP. No. 86677 are AFFIRMED withMODIFICATION. The employer, Equator Knights Detective and Security Agency, Inc., had sut1icient basis to terminate the employment of Jonathan I. Sang-an whose dismissal is thus declared to be substantively valid. However, he was denied his right to procedural due process for lack of the required notice of dismissal. Consequently, Equator Knights Detective and Security Agency, Inc. is ordered to pay petitioner Jonathan I. Sang-an P30,000.00 as nominal damages for its non-compliance with procedural due process.

SO ORDERED.

G.R. No. 166705               July 28, 2009

MANTLE TRADING SERVICES, INCORPORATED AND/OR BOBBY DEL ROSARIO, Petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION and PABLO S. MADRIAGA, Respondents.

D E C I S I O N

PUNO, C.J.:

This petition for review seeks to reverse the Decision1 of the Court of Appeals in C.A.-G.R. SP No. 84796 which nullified and set aside the Decision2 and Resolution of the National Labor Relations Commission (NLRC) in NLRC NCR CA No. 034291-03 which modified an earlier decision by the Labor Arbiter holding that respondent Pablo S. Madriaga (Madriaga) was illegally dismissed.

Petitioner company, Mantle Trading Services, Inc., is engaged in the fishing business.3 Sometime in June 1989, Madriaga was hired by petitioner company as a "batilyo" or fish hauler. Subsequently, he became a "tagapuno" (someone who filled up tubs with fish). He worked from 6:00 p.m. up to 6:00 a.m. the following day with a daily pay of P150.00.

On August 10, 1999, Madriaga was reported by one Henry Gallos, a fish broker, to have received money from a fish trader, Mr. Edwin Alfaro. As consideration, Madriaga would put more fish in Alfaro’s tubs. On August 25, 1999, Madriaga was again reported to have received money from Alfaro for the same illicit purpose. In both incidents, formal incident reports were submitted to the petitioner company.4

On September 11, 1999, Madriaga was allegedly barred by the payroll master, Mr. Charlie Baqued, from reporting for work. Petitioner company, on the other hand, alleged that Madriaga abandoned his work when he was about to be investigated for the two incident reports.

On February 7, 2001, Madriaga filed a complaint with the Regional Office of the Department of Labor and Employment (DOLE)—National Capital Region (NCR) against petitioners, for illegal dismissal, underpayment of wages and nonpayment of holiday pay, 13th month pay, overtime pay, service incentive leave pay and night shift differential pay.

On June 20, 2001, the DOLE-NCR Regional Office endorsed the complaint to the NCR Arbitration Branch. Petitioner company alleged, among others, that Madriaga was a seasonal employee and he was not dismissed. In a decision rendered on August 26, 2002, Labor Arbiter Melquiades Sol D. Del Rosario found Madriaga to be a regular employee who was illegally dismissed. The dispositive portion states, viz.:

CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding complainant to have been illegally dismissed. Respondent Mantle Trading Services, Inc. is hereby ordered to pay complainant the sums computed in the body of this decision, which dispositions are made a part hereof.

SO ORDERED.5

The Labor Arbiter ruled that Madriaga was a regular employee because "the nature of [Madriaga’s] work is filling tubs with fish everytime the fishing vessel would come to port, and that the business of respondent is the disposition of fish catch."6 He found that since the signing of the employment agreement with petitioner company on August 1, 1996, Madriaga had been working as "tagapuno" continuously.7 He held that Madriaga’s work was necessary or desirable in the usual business or trade of the petitioner company.8 The Labor Arbiter concluded that Madriaga could not have been a project worker as alleged by the petitioner company because there is no specific project that appeared on the contract and neither was there a statement as to the specific period of time when that the project will be completed.

The Labor Arbiter also faulted the petitioner company in failing to comply with the requirement of notice before dismissing an employee. He held that the employer must furnish the employee, sought to be dismissed, with two (2) written notices before termination can be legally effected: first, there must be a notice which apprises the employee of the particular acts or omissions for which the dismissal is sought; and second, a subsequent notice which informs the employee of the employer’s decision to dismiss him.9 The Labor Arbiter held that even if the ground of dismissal is abandonment of work, there must still be a notice to be served at the employee’s last known address.10

The Labor Arbiter awarded Madriaga with backwages to be paid not from the date he was dismissed, on September 11, 1999, but on February 7, 2001 "as a matter of penalty for dilly-dallying in the filing of the case."11As of June 11, 2002, respondent’s backwages amounted to P82,368.00. In addition, the Labor Arbiter awarded Madriaga P15,444.00 as separation pay, P24,240.00 for underpayment of wages, P1,980.00 for unpaid holiday pay, or the total amount of P124,032.00.12

Petitioner company appealed to the NLRC. It charged that the Labor Arbiter committed grave abuse of discretion in holding that: (1) Madriaga was a regular and not a contractual employee; (2) he was illegally dismissed; and (3) his money claims were granted.1avvphi1

On January 30, 2004, the NLRC modified the decision of the Labor Arbiter. It affirmed the Labor Arbiter’s ruling that Madriaga was a regular employee but it held that Madriaga was not illegally dismissed, viz.:

As regards the second issue, respondent [Mantle] contends that [Madriaga] was not illegally dismissed because being a contractual/seasonal/project employee, his employment was terminated at the end of the undertaking or at the latest, at the end of the fishing season for 1999, hence, there was no need to comply with the two-notice requirement under the law. It claims that when the incidents of August 10 and August 25, 1999 were about to be investigated, complainant [Madriaga] disappeared from the fish port and abandoned his work, only to surface again when this complaint was heard. It avers that complainant committed serious misconduct since by the account of his co-workers, he received money from a fish trader to intentionally injure the interest of the respondent.

We find that complainant was neither dismissed by the respondent nor did he abandon his work. Based on the records, no notice of termination was sent to the complainant by the respondent company, much less was complainant verbally told by any officer of the respondent not to report for work. Complainant’s allegation that he was barred by the payroll master from reporting for work has not been substantiated. In any case, even if it were true, the act of the payroll master in preventing the complainant from reporting for work cannot be deemed respondent’s act in the absence of evidence that said payroll master had the authority to dismiss employees. What appears to have happened here is that complainant was not dismissed by the respondent company but the

complainant without ascertaining the authority of the payroll master, heeded the latter’s order for him not to report for work.13

The NLRC rejected petitioner company’s contention that Madriaga abandoned his work. It ruled that mere absence is not sufficient. There must be proof that there was deliberate and unjustified refusal on the part of the employee to resume his employment without any intention of returning.

Thus, the dispositive portion of the NLRC decision held:

Wherefore, the Decision dated August 26, 2002 is MODIFIED. Complainant is declared not illegally dismissed and directed to report for work. Respondent is directed to accept complainant back to work and to pay complainant the amount of twenty four thousand two hundred forty pesos (P24,240.00) as salary differentials, five thousand one hundred forty eight pesos (P5,148.00) as 13th month pay and one thousand nine hunded eighty pesos (P1,980.00) as holiday pay, or the aggregate sum of thirty one thousand three hundred twenty eight pesos (P31,328.00).

SO ORDERED.14

Both petitioner company and respondent filed their respective motions for reconsideration. Petitioner company contended that the NLRC erred when it found Madriaga to have been employed since 1989 and not 1999. It reiterated its argument that Madriaga was not a regular employee and that he abandoned his work. Respondent, on the other hand, insisted he was illegally dismissed. On March 31, 2004, their motions for reconsideration were denied for lack of merit.

Petitioner company sought recourse with the Court of Appeals through a Petition for Certiorari. It alleged that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that: (1) Madriaga was a regular employee; (2) his employment commenced in 1989 as testified to by the employee and not 1999 as stated in their employment contract; and (3) he did not abandon his work.

On August 31, 2004, the Court of Appeals affirmed the finding of the Labor Arbiter and the NLRC that Madriaga was a regular employee. It held that Madriaga’s work as tagapuno may be likened to the work of a cargador which is directly related, necessary and vital to the operations of the employer’s business.15 It ruled that the distribution of the day’s catch to the tubs of different fish traders has a reasonable connection to the fishing business of petitioner company.

The Court of Appeals also sustained the ruling that Madriaga began work in 1989 and not in 1999. It affirmed the joint finding of the Labor Arbiter and the NLRC based on the testimony of the employee that he began work in 1989 as opposed to the questionable employee contract dated 1999.

The Court of Appeals, however, reversed the Labor Arbiter and the NLRC on the issue of abandonment of work. It held that there was a causal connection between the charge against Madriaga of having received money from a fish trader and his failure to seek his immediate reinstatement. It ruled that Madriaga abandoned his work as it was only invoked two years after his alleged dismissal. However, despite the finding that Madriaga abandoned his work, the Court of Appeals held that "[c]onsidering that petitioner has not established the compliance with due process in terminating respondent’s employment, it is still considered to have committed illegal dismissal."16 The dispositive portion of its Decision held:

Wherefore, the Decision dated January 30, 2004 of the National Labor Relations Commission is ANNULLED and SET ASIDE. Accordingly, the Decision dated August 26, 2002 of the Labor Arbiter finding private respondent to have been illegally dismissed is REINSTATED.

SO ORDERED.17

Petitioner company filed a Motion for Reconsideration and a Supplemental Motion for Reconsideration, which were both denied in a Resolution dated January 13, 2004.18

It now comes before this Court raising the following issues:

I.

Whether or not the Honorable Court of Appeals erred when it went beyond the scope of a writ of certiorari in resolving that private respondent was illegally dismissed although such issue was not raised [in] the petition for certiorari.

II.

Whether or not the Honorable Court of Appeals erred when it held that private respondent was illegally dismissed because petitioner did not comply with the notice requirement despite its finding of abandonment of work.

The first ground patently lacks merit. Petitioner company raised three (3) assignment of errors before the Court of Appeals, i.e., whether the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction: (1) in ruling that Madriaga is a regular employee; (2) in holding that Madriaga’s employment commenced in 1989; and (3) in concluding that respondent did not abandon his work. All these issues cannot be divorced from the question of whether Madriaga was illegally dismissed by the petitioner company. More specifically, the issue of abandonment is inextricably linked with the issue of the validity of the dismissal.19Indeed, the illegal dismissal of Madriaga was the subject of his complaint that was resolved by the Labor Arbiter, the NLRC and the Court of Appeals. It is the heart of the case at bar.

We now come to the ruling of the Court of Appeals that Madriaga who abandoned his work was nevertheless illegally dismissed for non-compliance by the petitioner company with the notice requirement. It is settled that to effect a valid dismissal, the law requires that a) there be just and valid cause as provided under Article 282 of the Labor Code; and b) the employee be afforded an opportunity to be heard and to defend himself. The two-notice requirement must be complied with, to wit: a) a written notice containing a statement of the cause for the termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires; and b) if the employer decides to terminate the services of the employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the reason therefore.20

The case of Agabon v. NLRC, et al.21 applies to the case at bar. In Agabon, the dismissal was found by the Court to be based on a just cause because the employee abandoned his work. But it also found that the employer did not follow the notice requirement demanded by due process. It ruled that this violation of due process on the part of the employer did not nullify the dismissal, or render it illegal, or ineffectual. Nonetheless, the employer was ordered to indemnify the employee for the violation of his right to due process. It further held that the penalty should be in the nature of

indemnification, in the form of nominal damages and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer.22 The amount of such damages is addressed to the sound discretion of the court, considering the relevant circumstances.23 Thus, in Agabon, the Court ordered the employer to pay the employee nominal damages in the amount of P30,000.00.

Again, we stress that though the Court is given the latitude to determine the amount of nominal damages to be awarded to an employee who was validly dismissed but whose due process rights were violated, a distinction should be made between a valid dismissal due to just causes under Article 282 of the Labor Code and those based on authorized causes, under Article 283. The two causes for a valid dismissal were differentiated in the case of JAKA Food Processing Corporation v. Pacot24 where the Court held that:

A dismissal for just cause under Article 282 implies that the employee concerned has committed, or is guilty of, some violation against the employer, i.e. the employee has committed some serious misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected his duties. Thus, it can be said that the employee himself initiated the dismissal process.

On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by the employer's exercise of his management prerogative, i.e. when the employer opts to install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes to implement a retrenchment program.

x x x x

Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer's exercise of his management prerogative.25

Since in the case of JAKA, the employee was terminated for authorized causes as the employer was suffering from serious business losses, the Court fixed the indemnity at a higher amount of P50,000.00. In the case at bar, the cause for termination was abandonment, thus it is due to the employee’s fault. It is equitable under these circumstances to order the petitioner company to pay nominal damages in the amount of P30,000.00, similar to the case of Agabon.

We affirm the award of salary differentials, 13th month pay and holiday pay, awarded by the NLRC and the Court of Appeals. We note that although petitioner company had cause to terminate Madriaga, this has no bearing on the issue of award of salary differentials, holiday pay and 13th month pay because prior to his valid dismissal, he performed work as a regular employee of petitioner company, and he is entitled to the benefits provided under the law. Thus, in the case of Agabon, even while the Court found that the dismissal was for a just cause, the employee was still awarded his monetary claims.

An employee should be compensated for the work he has rendered in accordance with the minimum wage, and must be appropriately remunerated when he was suffered to work on a regular holiday during the time he was employed by the petitioner company. As regards the 13th month pay, an

employee who was terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his termination from the service.26

As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege nonpayment, the general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove nonpayment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents — which will show that overtime, differentials, service incentive leave and other claims of workers have been paid — are not in the possession of the employee but in the custody and absolute control of the employer. 27 Since in the case at bar petitioner company has not shown any proof of payment of the correct amount of salary, holiday pay and 13th month pay, we affirm the award of Madriaga’s monetary claims.

IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of Appeals in C.A.-G.R. SP No. 84796, dated August 31, 2004, annulling and setting aside the Decision of the NLRC dated January 30, 2004 and reinstating the Decision dated August 26, 2002 of the Labor Arbiter finding respondent Pablo S. Madriaga a regular employee and ordering the petitioner company to pay the amount of twenty-four thousand, two hundred forty pesos (P24,240.00) as salary differentials, five thousand, one hundred forty-eight pesos (P5,148.00) as 13th month pay, and one thousand, nine hundred eighty pesos (P1,980.00) as holiday pay, is hereby AFFIRMED. In accordance with the ruling in Agabon, the award for backwages is deleted, but in addition, the amount of thirty thousand pesos as nominal damages (P30,000.00) is awarded to the respondent. The aggregate sum of the award to Madriaga shall be the total of sixty-one thousand, three hundred twenty-eight pesos (P61,328.00).

No costs.

SO ORDERED.

G.R. No. 188882               March 30, 2010

PHILIPPINE VETERANS BANK, Petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION) and BENIGNO MARTINEZ,Respondents.

R E S O L U T I O N

BRION, J.:

Submitted for our review in this petition for review on certiorari (with a prayer for temporary restraining order and/or writ of preliminary injunction)1 are the decision2 and the resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 00708. The CA decision affirmed the December 8, 2004 decision4 and March 14, 20055 resolution of the National Labor Relations Commission (NLRC),

Fourth Division, Cebu City. The NLRC, in turn, reversed the decision of the Labor Arbiter (LA) that dismissed the respondent’s complaint for constructive dismissal.

On February 20, 2003, respondent Benigno B. Martinez (respondent) filed a complaint for illegal dismissal, with a claim for backwages, reinstatement and damages against petitioner Philippine Veterans Bank (petitioner).

In his position paper, the respondent alleged that he was the manager of the petitioner’s Dumaguete Branch from September 1, 2001 until January 8, 2003, when his supposed resignation from the petitioner became effective. The respondent claimed that his resignation stemmed from a report published by the Philippine Daily Inquirer regarding the anomalies hounding the petitioner’s high-ranking officials. This controversy according to the respondent resulted in huge withdrawals of major depositors. Concerned, the respondent approached Mr. Wilfredo S. Aniñon (Mr. Aniñon), the petitioner’s Area Head for Visayas and Mindanao to discuss how to resolve the matter. When Mr. Aniñon just brushed off the issue, the respondent requested the Mayor of Valencia (a known big depositor of the Dumaguete Branch) to talk to Mr. Aniñon. The latter apparently misinterpreted the respondent’s actions and angrily confronted him the next day, saying – "You fool, you went to the mayor of Valencia to seek support. Let them pull out all their deposits, they cannot threaten me! Let them pull out immediately! I will see to it that you will be replaced there! If not, I’d manage the branch myself! Or I’ll have Dumaguete Branch made under the Luzon area so that I have nothing to do with your branch."

On October 14, 2002, Mr. Aniñon went to the Dumaguete Branch and brought along with him Mr. Mansueto Quijote as the respondent’s replacement and new branch manager. Mr. Aniñon then instructed the respondent to go to the petitioner’s head office in Makati to report to the Vice President and Head of Branch Banking Division, Mr. Jose D. Lloren, Jr (VP Lloren).

The respondent flew to Manila and reported to the Makati Office, as ordered. VP Lloren told him that he would undergo training, but no such training took place. Instead, he was made to do clerical jobs. To compound the unjust treatment, the respondent had to travel at least 4 hours daily from his rented house in Cavite to Makati; his travel and living expenses consumed at least half of his salary. On January 8, 2003, the respondent tendered his resignation citing that "it is so expensive for [him] to be staying away from [his] family."

The petitioner in its Position Paper claimed that the respondent’s transfer was not motivated by bad faith. It argued that Special Order No. 880, which ordered the respondent’s transfer to the Branch Banking Division to undergo Branch Head Training effective October 21, 2002, authorized the respondent’s transfer. The same Order stated that the respondent’s transfer will not entail any change in rank and compensation and that he is also entitled to per diem and housing allowance amounting to six thousand pesos. The petitioner further claimed that the respondent’s transfer was neither unceremonious nor without his consent since he agreed in his contract of employment that he can be given a different assignment at any given time. Finally, the petitioner claimed that the respondent was not placed on "floating status;" after his training on October 29, 2002, he was assigned to the Due Head Office Task Force to hold the sensitive position of reconciling all book entries of all the petitioner’s branches. Thus, to the petitioner, the respondent was not constructively dismissed; he voluntarily resigned from his job.

The LA and NLRC Rulings

On June 30, 2003, the LA dismissed the respondent’s complaint for lack of merit. The LA found that the petitioner was not guilty of constructive dismissal and that the respondent voluntarily resigned from the service.

On appeal, the NLRC reversed the LA’s decision and held that the respondent was constructively dismissed. The NLRC awarded backwages, separation pay in lieu of reinstatement, moral and exemplary damages in the aggregate amount of P933,350.00. The NLRC found that the "unceremonious replacement" of the respondent on October 14, 2002 is akin to constructive dismissal. It also found that the events following the respondent’s transfer, including the inconvenience that he had to face on a daily basis while working in Makati, left him with no other option but to resign.

On December 8, 2004, the petitioner filed a petition for certiorari before the Court of Appeals (CA) contending that the NLRC committed grave abuse of discretion in ruling that the respondent was constructively dismissed. During the pendency of the petition for certiorari, the petitioner filed a supplemental petition raising the theory that the present case involves the termination of an elected corporate officer, which issue is not within the jurisdiction of the LA, but within the exclusive and original jurisdiction of the Regional Trial Courts.

The CA Ruling

On February 27, 2009, the CA affirmed the NLRC’s decision with modification on the award of backwages (to be reckoned from January 16, 2003 up to the finality of the decision) and attorney’s fees. Procedurally, the CA found the petitioner’s petition for certiorari to be defective and, therefore, dismissible since the Head of the Legal Department (who signed the Certification of Non-Forum Shopping) was not duly authorized to file the petition in the petitioner’s behalf. The CA held that in the absence of any authority from the board of directors, no person, not even the officers of the corporation, can validly bind the corporation.

On the merits, the CA held that the petitioner is estopped from raising the issue of lack of jurisdiction for the very first time on appeal. The CA held that the respondent’s unceremonious replacement amounted to constructive dismissal; it was clearly an act of clear discrimination, insensibility or disdain on the part of the petitioner.

The CA noted that jurisprudence prohibits transfers or reassignments of employees that are unreasonable and that inconvenience or prejudice them. In this case, the CA found that the respondent’s transfer from Dumaguete to Makati City was clearly unreasonable, inconvenient and put him in the difficult predicament of choosing whether to live away from his family or to bring them to Manila which will entail additional expenses on his part. The CA also found no compelling reason (i.e. any urgency or genuine business necessity) to justify the petitioner’s order of transfer. The petitioner’s stated reason about branch head training because of the respondent’s gross inefficiency is unconvincing, since the petitioner failed to present any evidence that the latter had a record of gross inefficiency. Finally, the CA opined that the petitioner failed to show any valid reason why it had to require the respondent to go to Makati City to undergo branch head training when it could just as easily require the latter to undergo the same training in the VISMIN area. Based on these considerations, the CA concluded that the respondent’s resignation amounted to constructive dismissal.

The present petition raises the following issues:

(1) Whether or not the petitioner is already estopped from raising the issue of lack of jurisdiction;

(2) Whether or not the petitioner’s act of transferring the respondent to its head office in Makati was a valid exercise of management prerogative; and

(3) Whether or not the respondent’s severance from employment was voluntary or was he constructively dismissed.

We DENY the petition for lack of merit.

Petitioner is estopped from belatedly raising the issue of lack of jurisdiction

As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court will not be permitted to change theory on appeal.6 Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory, which it could have done had it been aware of it at the time of the hearing before the trial court.7 To permit the petitioner in this case to change its theory on appeal would thus be unfair to the respondent, and offend the basic rules of fair play, justice and due process.8

In addition, the petitioner is already estopped from belatedly raising the issue of lack of jurisdiction since it has actively participated in the proceedings before the LA and NLRC. We have consistently held that while jurisdiction may be assailed at any stage, a party’s active participation in the proceedings before a court without jurisdiction will estop such party from assailing such lack of it. It is an undesirable practice of a party participating in the proceedings and submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse.91avvphi1

The petitioner violated the non-forum shopping provision

The certificate of non-forum shopping was filed by the petitioner’s Legal Department Head, yet he failed to present proper authority showing that the petitioner authorized him to file the petition for certiorari. Coming from a major bank and from its Legal Department Head, this lapse cannot be condoned and the CA was right in dismissing the petition for this reason, among others.

The petitioner was constructively dismissed

The settled rule is that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.10 In the present case, we find that the NLRC’s finding, as affirmed by the CA, that respondent’s constructive dismissal is supported by substantial evidence.

In constructive dismissal cases, the employer has the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer

must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee. Failure of the employer to overcome this burden of proof taints the employee’s transfer as a constructive dismissal.11

In the present case, the petitioner failed to discharge this burden. The NLRC, as affirmed by the CA, correctly found that the combination of the harsh actions of the petitioner rendered the employment condition of respondent hostile and unbearable for the following reasons:

First, the petitioner failed to show any urgency or genuine business necessity to transfer the respondent to the Makati Head Office. In fact, the respondent showed the actual motivation and the bad faith behind his transfer. The petitioner’s stated reason that the respondent had to undergo branch head training because of his gross inefficiency cannot defeat the respondent’s evidence on this point as the petitioner failed to present any evidence that the respondent had a record of gross inefficiency.

Second, the respondent’s transfer from Dumaguete to Makati City is clearly unreasonable, inconvenient and oppressive, since the respondent and his family are residents of Dumaguete City. The CA correctly found that the respondent was placed in the very difficult predicament of having to choose whether to live away from his family or to bring them to Manila, which will entail additional expenses on his part.

Third, the petitioner failed to present any valid reason why it had to require the respondent to go to Makati Head Office to undergo branch head training when it could have just easily required the latter to undertake the same training in the VISMIN area.

Finally, there was nothing in the order of transfer as to what position the respondent would occupy after his training; the respondent was effectively placed in a "floating" status. The petitioner’s allegation that the respondent was assigned to a sensitive position in the DUHO Task Force is suspect when considered with the fact that he was made to undergo branch head training which is totally different from a position that entails reconciling book entries of all branches of the former. Reconciling book entries is essentially an accounting task.

The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances.12 Based on the factual considerations in the present case, we hold that the hostile and unreasonable working conditions of the petitioner justified the finding of the NLRC and the CA that respondent was constructively dismissed.

WHEREFORE, premises considered, we DENY the present petition and AFFIRM the Court of Appeal’s Decision dated February 27, 2009 and Resolution dated July 16, 2009 in CA-G.R. SP No. 00708.

SO ORDERED.

G.R. No. 173774               January 30, 2012

MANILA ELECTRIC COMPANY, Petitioner, vs.MA. LUISA BELTRAN, Respondent.

D E C I S I O N

DEL CASTILLO, J.:

As the law regards workers with compassion, an employer’s right to discipline them should be tempered with compassion as well. In line with this, the imposition of the supreme penalty of dismissal is justified only when there are sufficient grounds as supported by substantial evidence.

This Petition for Review on Certiorari1 assails the November 25, 2005 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 67960, which granted the petition filed therewith, reversed the May 30, 2001 Decision3 of the National Labor Relations Commission (NLRC), and accordingly affirmed the July 16, 1999 Decision4 of the Labor Arbiter ordering petitioner Manila Electric Company (MERALCO) to reinstate respondent Ma. Luisa Beltran (Beltran) to her former position but without payment of backwages. Likewise assailed is the CA Resolution5dated July 19, 2006 which denied the Motion for Reconsideration thereto.

Factual Antecedents

Beltran was employed by MERALCO on December 16, 1987. At the time material to this case, she was holding the position of Senior Branch Clerk at MERALCO’s Pasig branch. While rendering overtime work on September 28, 1996, a Saturday, Beltran accepted P15,164.48 from Collection Route Supervisor Berlin Marcos (Marcos), which the latter received from customer Andy Chang (Chang). The cash payment was being made in lieu of a returned check earlier issued as payment for Chang’s electric bill. Beltran was at first hesitant as it was not part of her regular duties to accept payments from customers but was later on persuaded by Marcos’ persistence. Hence, Beltran received the payment and issued Auxiliary Receipt No. 879646 which she dated September 30, 1996, a Monday, instead of September 28, 1996. This was done to show that it was an accommodation, an accepted practice in the office. She thereafter placed the money and the original auxiliary receipt and other documents pertinent to the returned check underneath her other files inside the drawer of her table.

Beltran, however, was only able to remit Chang’s payment on January 13, 1997. Thus, in a Memorandum7 dated January 16, 1997, she was placed under preventive suspension effective January 20, 1997 pending completion of an investigation. MERALCO considered as misappropriation or withholding of company funds her failure to immediately remit said payment in violation of its Code on Employee Discipline. Investigation thereafter ensued.8

In her Sinumpaang Salaysay,9 Beltran admitted receipt of Chang’s payment of P15,164.48 on September 28, 1996. She also admitted having issued an Auxiliary Receipt dated September 30, 1996 and having remitted the amount only on January 13, 1997, after her immediate supervisor, Elenita L. Garcia (Garcia), called her attention about the payment and its non-remittance. Beltran nevertheless explained the circumstances which caused the delay of the turn-over of Chang’s payment. She recounted that on the day following her receipt of the money, she had a huge fight with her husband which led to their separation; that on September 30, 1997, she reported at MERALCO’s Taguig branch where she worked until 8:30 p.m.; and, that subsequent marital woes coupled with her worries for her ailing child distracted her into forgetting Chang’s payment. Beltran

claimed that after Garcia approached her regarding the unremitted payment of Chang, she immediately looked for the money in her drawer and right there and then handed it over to Garcia together with the other pertinent documents. Beltran denied having personally used the money.

Garcia, the Administrative Supervisor of MERALCO’s Pasig branch, on the other hand, testified that while doing an accounting of all outstanding returned checks sometime in December 1996, she noticed that Chang’s returned check was missing. Upon further inquiry, she discovered that Chang had already redeemed the returned check after paying P15,164.48 to Beltran, who in turn issued an Auxiliary Receipt dated September 30, 1996. It was also discovered that the payment has not yet been remitted. This prompted her to inquire from Beltran on January 7, 1997 about the supposed payment and immediately ordered the remittance of the same. Beltran, however, failed to do so on that day and even on the next day when she reported for work. Beltran subsequently went on leave of absence on January 9 and 10, 1997. It was only on January 13, 1997 that the money with the pertinent documents were handed over.10

In a memorandum11 dated February 25, 1997, the investigator found Beltran guilty of misappropriating and withholding Chang’s payment of P15,164.48 and recommended her dismissal from service thus:

For wil[l]fully, unlawfully and feloniously withholding and/or misappropriating for your personal purposes or benefit electric bill payment of a Meralco customer, you have thereby violated Section 7 par. (1) of the Company Code on Employee Discipline which proscribes "(m)isappropriating, or withholding, Company funds: penalized therein with dismissal from the service. Because of this act of fraud and dishonesty, you have wil[l]fully breached the trust and confidence reposed in you by your employer.

x x x x

Accordingly, Management is constrained to dismiss you for cause from the service and employ of the Company, as you are hereby so dismissed effective 13 March 1997, with forfeiture of all rights and privileges.12 (Emphasis supplied.)

By virtue thereof, Beltran was terminated effective March 13, 1997.13

Beltran filed a complaint for illegal dismissal14 against MERALCO. She argued that she had no intention to withhold company funds. Besides, it was not her customary duty to collect and remit payments from customers. She claimed good faith, believing that her acceptance of Chang’s payment is considered goodwill in favor of both MERALCO and its customer. If at all, her only violation was a simple delay in remitting the payment, which caused no considerable harm to the company. Further, her nine years of unblemished service to the company should be taken into account such that the penalty of dismissal is not a commensurate penalty for the unintentional act committed.

MERALCO, on the other hand, maintained that under company policy, Beltran had the duty to remit payment for electric bills by any customer on the day the same was received. It opined that if indeed the money was kept intact inside the drawer and was not put to personal use, Beltran could have easily turned over the same when Garcia instructed her to do so on January 7, 1997. However, Beltran failed to remit the money on said date and even on the following day, January 8, when she reported for work. Worse, in the two succeeding days, she went on leave. Thus, there was a clear sign of misappropriation of company funds, considered a serious misconduct and punishable by

dismissal from the service. Further, Beltran’s reason for her failure to perform such obligation on account of family problems deserves scant consideration. MERALCO insisted that Beltran’s act renders her unworthy of the trust and confidence demanded of her position.

Ruling of the Labor Arbiter

In a Decision15 dated June 16, 1999, the Labor Arbiter regarded the penalty of dismissal as not commensurate to the degree of infraction committed as there was no adequate proof of misappropriation on the part of Beltran. If there was delay in Beltran’s remittance of Chang’s payment, it was unintentional and same cannot serve as sufficient basis to conclude that there was misappropriation of company funds. In fact, Beltran did not even attempt to deny possession of, or refuse to hand in, the money. The Labor Arbiter thus gave compassionate consideration for the neglect to remit the money promptly, stating that it is excusable for Beltran to commit lapses in her work due to serious family difficulties. While the Labor Arbiter commiserated with Beltran’s circumstances and took into account her long and untainted service, he nonetheless imposed disciplinary action in the form of forfeiture of salary for her neglect in remitting the funds at once. The dispositive portion of his Decision reads as follows:

IN THE LIGHT OF THE FOREGOING, the respondent is hereby ordered to reinstate the complainant to her former position without backwages. The forfeiture of backwages should be an equitable penalty for the delay in the remittance of company funds.

SO ORDERED.16

Ruling of the National Labor Relations Commission

Upon appeal, the NLRC reversed the Labor Arbiter’s Decision and dismissed Beltran’s complaint against MERALCO in its Decision17 dated May 30, 2001. It found that Beltran withheld company funds by failing to remit it for almost four months. It disregarded Beltran’s assertion of family problems as the same cannot be used as an excuse for committing a serious misconduct in violation of the trust reposed on her as a Senior Branch Clerk. The NLRC was convinced that Beltran used the money for her personal needs since her act of taking a leave of absence right after her confrontation with Garcia suggested that she needed time to produce it. The NLRC thus ruled that MERALCO validly dismissed Beltran from the service in the exercise of its inherent right to discipline its employees.

In her Motion for Reconsideration,18 Beltran attributed grave abuse of discretion on the part of the NLRC in basing its conclusions on mere inferences and presumptions. Beltran argued that she could not be guilty of withholding Chang’s payment, much more, misappropriating it. She alleged that Garcia did not order her to remit the money on January 7, 1997 or on the following day. Further, records reveal that she was on leave from January 9 to 10 to attend to her child who was suffering from asthma. And since January 11 and 12 are Saturday and Sunday, she deemed it appropriate to make the remittance on the following Monday, January 13, 1997. Garcia, however, refused to accept the money, saying that she already committed withholding of company funds.

The NLRC denied Beltran’s Motion for Reconsideration.19

Ruling of the Court of Appeals

When Beltran brought the case to the CA via a Petition for Certiorari,20 the NLRC’s ruling was reversed. The CA instead agreed with the findings of the Labor Arbiter that there were no serious grounds to warrant Beltran’s dismissal. The CA held that the penalty of dismissal is harsh considering the infraction committed and Beltran’s nine years of unblemished service with MERALCO. It held that Beltran’s mere failure to remit the payment was unintentional and not attended by any ill motive and that her excuse for the inadvertence was reasonable. As such, the CA affirmed the ruling of the Labor Arbiter ordering MERALCO to reinstate Beltran to her former position but with the forfeiture of her salary as an equitable penalty for her negligence. Thus, in its Decision21dated November 25, 2005, the petition was resolved as follows:

WHEREFORE, premises considered, the instant petition is hereby GRANTED. The x x x Decision dated May 30, 2001 and the Resolution dated August 22, 2001 of the National Labor Relations Commission are herebyREVERSED. ACCORDINGLY, the Decision of the Labor Arbiter dated June 16, 1999, is hereby AFFIRMED.

SO ORDERED.22

In a Resolution23 dated July 19, 2006, MERALCO’s Motion for Reconsideration was denied by the CA. Hence, MERALCO filed this present Petition for Review on Certiorari, raising the lone issue of whether –

Issue

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE REINSTATEMENT OF [BELTRAN] DESPITE THE UNDISPUTED FINDING THAT SHE IS GUILTY OF WITHHOLDING x x x COMPANY FUNDS.24

Our Ruling

MERALCO insists that there was convincing basis to dismiss Beltran from employment. While there was no concrete proof of misappropriation, the fact that there was withholding of company funds remains undisputed. This act of negligence by Beltran in the performance of her duties has resulted to the loss of trust and confidence reposed on her, notwithstanding her self-serving allegations of marital woes and family difficulties, which were not even corroborated by any clear evidence.

We do not agree. On the contrary, we support the CA’s finding that there are no sufficient grounds to warrant Beltran’s dismissal.

For loss of trust and confidence to be a valid ground for dismissal, it must be based on a willful breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. In addition, loss of trust and confidence must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion. 25

In the case at bench, Beltran attributed her delay in turning over Chang’s payment to her difficult family situation as she and her husband were having marital problems and her child was suffering from an illness. Admittedly, she was reminded of Chang’s payment by her supervisor on January 7, 1997 but denied having been ordered to remit the money on that day. She then reasoned that her

continued delay was caused by an inevitable need to take a leave of absence for her to attend to the needs of her child who was suffering from asthma.

It should be emphasized at this point that the burden of proving the legality of an employee’s dismissal lies with the employer.26 "Unsubstantiated suspicions, accusations, and conclusions of employers do not provide legal justification for dismissing employees."27 "[M]ere conjectures cannot work to deprive employees of their means of livelihood."28 To begin with, MERALCO cannot claim or conclude that Beltran misappropriated the money based on mere suspicion. The NLRC thus erred in concluding that Beltran made use of the money from the mere fact that she took a leave of absence after having been reminded of the unremitted funds. And even if Beltran delayed handing over the funds to the company, MERALCO still has the burden of proof to show clearly that such act of negligence is sufficient to justify termination from employment. Moreover, we find that Beltran’s delay does not clearly and convincingly establish a willful breach on her part, that is, which is done "intentionally, knowingly and purposely, without any justifiable excuse." True, the reasons Beltran proffered for her delay in remitting the cash payment are mere allegations without any concrete proof. Nonetheless, we emphasize that as the employer, the burden still lies on MERALCO to provide clear and convincing facts upon which the alleged loss of confidence is to be made to rest.

Undoubtedly, Beltran was remiss in her duties for her failure to immediately turn over Chang’s payment to the company. Such negligence, however, is not sufficient to warrant separation from employment. To justify removal from service, the negligence should be gross and habitual.29 "Gross negligence x x x is the want of even slight care, acting or omitting to act in a situation where there is duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to consequences insofar as other persons may be affected."30Habitual neglect, on the other hand, connotes repeated failure to perform one’s duties for a period of time, depending upon the circumstances.31 No concrete evidence was presented by MERALCO to show that Beltran’s delay in remitting the funds was done intentionally. Neither was it shown that same is willful, unlawful and felonious contrary to MERALCO’s finging as stated in the letter of termination it sent to Beltran.32 Surely, Beltran’s single and isolated act of negligence cannot justify her dismissal from service.

Moreover, Beltran’s simple negligence did not result in any loss. From the time she received the payment on September 28, 1996 until January 7, 1997 when she was apprised by her supervisor about Chang’s payment, no harm or damage to the company or to its customers attributable to Beltran’s negligence was alleged by MERALCO. Also, from the time she was apprised of the non-remittance by her superior on January 7, 1997, until the turn-over of the amount on January 13, 1997, no such harm or damage was ever claimed by MERALCO.1âwphi1

Under the circumstances, MERALCO’s sanction of dismissal will not be commensurate to Beltran’s inadvertence not only because there was no clear showing of bad faith and malice but also in consideration of her untainted record of long and dedicated service to MERALCO.33 In the similar case of Philippine Long Distance Telephone Company v. Berbano, Jr.,34 we held that:

The magnitude of the infraction committed by an employee must be weighed and equated with the penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of dismissal or termination from the service. The employer should bear in mind that in termination cases, what is at stake is not simply the employee’s job or position but [her] very livelihood.

Where a penalty less punitive would suffice, whatever missteps may be committed by an employee ought not to be visited with a consequence so severe such as dismissal from employment.35 Hence,

we find no reversible error or any grave abuse of discretion on the part of the CA in ordering Beltran’s reinstatement without backwages. The forfeiture of her salary is an equitable punishment for the simple negligence committed.

WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated November 25, 2005 and Resolution dated July 19, 2006 in CA-G.R. SP No. 67960 are AFFIRMED.

SO ORDERED.

G.R. No. L-34974 July 25, 1974

P. A. ALMIRA, P. M. AMURAO, J. R. ANGELES, R. N. BADIOLA, LILIA R. BAUTISTA, G. B. LAIZ, N. A. CANLAS, C. S. DE CASTRO, C. V. CELIS, JR., A. M. DIONISIO, V. S. ESPIRITU, E. S. GUERRERO, J. R. GUTIERREZ, E. HERMIDA, M. O. LORENZO, R. S. MARQUEZ, C. G. PAISO, C. DELA PAZ, O. RABULAN, A. C. SALCEDO, C. P. SAN JUAN, D. T. SULIT, I. F. UY, FELIX BAYANI LOPEZ, GERRY DOMINGO, Z. DACLISON, A. PANGINDIAN, T. F. PESTANO, P. FULGAR, BEATRIZ M. LACSON, EROL A. SUGUITAN, ROSALIE O. ROMERO, AMADOR S. JALOSJOS, R. G. ARTEFICIO, M. R. BARTOLOME, MANUEL BASILIA, SYLVIA CAGUIOA, REBECCA DELA CRUZ, ROGELIO I. CRUZ, LIGAYA A. DURAN, ENRIQUE GALIERO, ANNA T. GAMBOA, FELIPE LLAVORE ARSENIO A. MENDOZA, JUSTO MUEDEN, STALINITA QUIJANO, PATRICIA RODRIGUEZ, ALLINAS P. ALBINDA, RUBEN A. ANTONIO, HERMINIA CANDO, NICOLAS CRUZ, TEREZA A. CRUZ, ANGELES Q. DELA CRUZ, DANIEL F. BAGUIO, MARCIAL DE LA LUPO, C. DE CASTRO, AMELIA R. CEDRO ISLA, ANDRES LACSAMANA, JOSE S. SIENA, ROLANDO S. JOSE, GERFE P. LOHO, BERNARDO MARTINEZ, GONZALO MORALES, DIONISIO T. ONG, AUGUSTO SANCHEZ, MANUEL V. TIBAY, MANUEL ALMENDRALA, E. V. FRANCIA, CARMELO CAPARROS, ROQUE DUMAGUING, F. P. ESPIRITU, G. I. MANANSALA, CARLOS SANTOS, FELITO E. CABANGON, ANGEL TICSAY, ROBERTO FORMELOZA, ROMEO GONZALES, and FLORENCIO MARQUEZ, petitioners, vs.B. F. GOODRICH PHILIPPINES, INC., COURT OF INDUSTRIAL RELATIONS and HONORABLE JOAQUIN SALVADOR, respondents.

Domingo E. de Lara & Associates for petitioners.

Manuel O. Chan for private respondent. Jose K Manguiat, Jr. for respondent Court.

 

FERNANDO, J.:p

What is readily apparent in this appeal from a decision of respondent Court of Industrial Relations, declaring a strike illegal because of the means employed, and dismissing petitioners, was the high pitch of bitterness that marked the relationship between labor and management in the establishment of private respondent, B. F. Goodrich Philippines, Inc. Even a cursory reading of the records will make evident that on both sides, there was the feeling that the other party was guilty of conduct the most reprehensible resulting in the flagrant disregard of its rights. With such a background, there was a greater need for objectivity in the application of the authoritative legal norms to the facts as

found. It cannot be said that respondent Court, more precisely respondent Joaquin Salvador, then the Judge whose order is now on appeal, was fully cognizant that such should be the case. 1 It is hard not to lend credence to the contention of petitioners that there was undue receptivity to the claim of private respondent, no doubt induced by the skill, competence, and resourcefulness of its counsel, Atty. Manuel Chan. It was unfortunate that in some of the crucial stages of the controversy, petitioners did not have the same advantage. 2Nonetheless, as will be shown, the strike could have been viewed with a little less disapproval and even if declared illegal, need not have been attended with such a drastic consequence as termination of employment relationship. This last point is even more compelling considering the security of tenure which is one of the notable features in the present Constitution. 3

The facts according to the appealed order follow: "As to the conduct of the strike and the picketing, this Court's Order of July 1, 1971 has fully described the same. In the course of the mass picketing, illegal and unlawful acts were committed by the respondents such as physically blocking and preventing the entry of complainant's customers, supplies and other employees who were not on strike, both in complainant's premises in Makati and Marikina, Rizal. Injuries likewise were inflicted on certain employees of complainant. Such acts of violence and intimidation appear to be of such a widespread nature so as to create an impression that there is a common pattern of action set into motion by the respondents. The actuations of respondents are likewise illegal. In the premises of complainant at Makati, Rizal, the respondents who picketed the same on April 20, 1971 were identified ... . Similarly, some of the respondents who picketed the Marikina premises of complainants were identified .... 4 Further: 'The complainant caused the publication of notices in both the Manila Times and Daily Mirror, newspapers of general and wide circulation ... for all employees not participating in the illegal strike to report for work on or before April 23, 1971, otherwise such failure will be considered as participation therein. Such notices were accompanied by instructions to personnel at all levels on how reporting for work will be accomplished, considering the precarious situation in relation to the safety of employees brought about by the strike of respondents. With respect to this particular aspect, certain of the respondents who were not seen in the picket line on or before April 23, 1971 were identified as having failed to report for work ... . It would appear, however, that these listed respondents who failed to report for work likewise were seen picketing the premises of complainant after April 26, 1971, ... ." 5 Then came this portion: "It would seem that the picketing by respondents has continued up [to] the present under the same pattern of coercive activities narrated in our Order Of July 1, 1971. Physical injuries where inflicted on complainants personnel manager. Mass picketing with the employment of intimidatory statements have again started on January 3, 1972. The roof of the complainants Makati Recap Plant was set on fire on January 13, 1972 ..." 6

Based on the above facts, it was in the appealed order of Judge Salvador; "On the basis, therefore, of the motivation as well as the conduct of the strike, the respondent are declared to have committed an illegal strike, which is likewise an unfair labor practice" 7 As consequence, in the dispositive portion, petitioner where "declared to have lost their status of employees of the complainant corporation as of April 19, 1971" 8 The appealed order was handed down on February 4, 1972. Had greater awareness been displayed to the approach followed by this court in a 1968 decision, Cebu Portland Cement Co. v. Cement Workers Union, 9 as well as to Shell Oil Workers' Union v. Shell Co. of the Philippines, Ltd. 10 there would have been less certitude displayed in the opinion of Judge Salvador as to the correctness of its decision. Moreover, as stated at the outset, if there be deference to what of late has been so evident, even on the assumption of the illegality of the strike, there need not be the automatic termination of the employment relationship, especially so in view of the command of the present Constitution as to the security of tenure.

1. It is understandable why respondent Judge Salvador was unsympathetic to a strike in which petitioners participated, considering the pendency of a certification election, just because management would not consider their union as the exclusive collective bargaining representative. At the very least, it was premature. Nonetheless, there was this commendable admission in the appealed order of Judge Salvador; "Lest we be miscontrued, the ilegality of the strike for recognition as general proposition is not absolute. We declare such strike illegal on the basis of the attendant circumstances in this case." 11 It mentioned the attendant circumstances, but as was apparent in an earlier portion of such order, what respondent Judge apparently could not resist was the compelling force of what by now should be an outmoded view of a strike being "by its very nature ... coercive ... ." 12 To display such a predisposition is to ignore the leading case ofCebu Portland Cement Co. v. Cement Workers Union. 13 For, as was therein pointed out, the ruling in National Labor Union, Inc. v. Philippine Match Factory 14 to the effect that a strike "is an economic weapon at war with the policy of the Constitution and the law," resort to which "is not, in plain terms, outlawed," 15 although certainly discouraged, is obsolete, for as was so clearly pointed out by Justice J. B. L. Reyes in Cebu Portland Cement Co. v. Cement Workers Union: 16 "For a time, decisions on the issue under consideration were characterized by strict adherence to the ruling in the Philippine Match Factory Case."17 Further, it was stated by him: "The actual break-away from the doctrine laid down in the Philippine Match Factory case came in Dinglasan v. National Labor Union, when the discretionary power of the Court of Industrial Relations to grant affirmative relief was recognized. ... Thereafter, the doctrine enunciated in Interwood Employees Association ... that good faith of the strikers in the staging of the strike is immaterial in the determination of the legality or illegality of the strike, was abandoned. In the case of Ferrer v. CIR, et al. the belief of the strikers that the management was committing unfair labor practice was properly considered in declaring an otherwise premature strike, not unlawful, and in affirming the order of the Labor Court for the reinstatement without back wages of said employees." 18 This 1968 decision of this Court, if present in the consciousness of respondent Judge Salvador, certainly could have caused, at the very least, a hesitancy on his part to declare the strike illegal. This is not to deny that the labor union ought not to have declared a strike under such circumstances, but at least, while premature, it could have been plausibly viewed as inspired by good faith, although perhaps not guided by sound legal advice.

2. What was set forth in the facts as found by respondent Judge Salvador would indicate that it was during the picketing, certainly not peaceful, that the imputed acts of violence did occur. It cannot be ignored, however, that there were injuries on both sides because management did not, understandably, play a passive role confronted as it was with the unruly disruptive tactics of labor. This is not, by any means, to condone activities of such character, irrespective of the parties responsible. It is merely to explain what cannot be justified. Nonetheless, did the acts in question call for an automatic finding of illegality? Again, the order issued on February 4, 1972 appeared to be oblivious of a 1971 decision of this Court,Shell Oil Workers' Union v. Shell Company of the Philippines, Ltd. 19 There it was clearly held: "A strike otherwise valid, if violent in character, may be placed beyond the pale. Care is to be taken, however, especially where an unfair labor practice is involved, to avoid stamping it with illegality just because it is tainted by such acts. To avoid rendering illusory the recognition of the right to strike, responsibility in such case should be individual and not collective. A different conclusion would be called for, of course, if the existence of force while the strike lasts is pervasive and widespread, consistently and deliberately resorted to as a matter of policy. It could be reasonably concluded then that even if justified as to ends, it becomes illegal because of the means employed. 20 It must be pointed out likewise that the facts as there found would seem to indicate a greater degree of violence. Thus: "Respondent Court must have been unduly impressed by the evidence submitted by the Shell Company to the effect that the strike was marred by acts of force, intimidation and violence on the evening of June 14 and twice in the mornings of June 15 and 16, 1967 in Manila. Attention was likewise called to the fact that even on the following day, with police officials stationed at the strike-bound area, molotov bombs did explode and the streets were obstructed with wooden planks containing protruding nails. Moreover, in the

branches of the Shell Company in Iloilo City as well as in Bacolod, on dates unspecified, physical injuries appeared to have been inflicted on management personnel. Respondent Court in the appealed decision did penalize with loss of employment the ten individuals responsible for such acts. Nor is it to be lost sight of that before the certification on June 27, 1967, one month had elapsed during which the Union was on strike. Except on those few days specified then, the Shell Company could not allege that the strike was conducted in a manner other than peaceful. Under the circumstances, it would be going too far to consider that it thereby became illegal." 21Then, mention was made of a decision "in Insular Life Assurance Co., Ltd. Employees' Association v. Insular Life Assurance Co., Ltd. [where] there is the recognition by this Court, speaking through Justice Castro, of picketing as such being 'inherently explosive.' It is thus clear that not every form of violence suffices to affix the seal of illegality on a strike or to cause the loss of employment by the guilty party." 22

There was in that case a concurring opinion by Justice Barredo which elicited the approval of the present Chief Justice. Thus: "All these, however, do not mean, on the other hand, that petitioner's strike should necessarily be held to be illegal. It is always a wholesome attitude in cases of this nature to give but secondary importance to strict technicalities, whether of substantive or remedial law, and to constantly bear in mind the human values involved which are beyond pecuniary estimation. 23

It would seem, therefore, to reiterate a point, that on the date of the appealed order of February 4, 1972, a less condemnatory attitude to the appearance of violence as such was part of the law of the land. It is to be admitted that this is one of those close cases. What is merely emphasized is that the imputation of illegality on the ground of the means employed is not automatically called for.

3. This is not to say that the appealed order is totally bereft of support in law. It is merely to point out that the facts as found did not point automatically and unerringly to so severe a result, namely the dismissal of petitioners. From a perspective more attuned to the trend indicated in current decisions of this Court, the three cited cases being representative, the conclusion reached could have been cast in a different mold. In labor law, as in constitutional law, it is no doubt true that the issues submitted, in the language of Justice Malcolm, may be "determined by the court's approach to them." 24 It is submitted that the direction indicated in the express language of both the 1935 and the present Constitution, is that which leads to protection to labor. 25

As previously noted, both petitioners and private respondent were guilty of practices far from peaceful in character. The original blame must of course be assumed by petitioners, for they ought to have known that the picketing that comes within the protection of the free speech guarantee is one that is peaceful. It involves people marching to and fro with placards to acquaint the public with the facts of a labor dispute. So it has been ruled from Mortera v. Court of Industrial Relations 26 a 1947 decision, to Chan Bros., Inc. v. Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas 27decided in January of this year. When they obstructed entrance into the premises of private respondent, they ought to have known that they were inviting reprisal. It has been observed of course that in labor controversies the unstructured incoherencies of vehement protest for grievances, sincerely even if erroneously felt, may easily flare up into rowdy conduct. So it did come about. The appealed order took note of the resulting melee. From the standpoint of settling a dispute, it would not suffice just to visit recriminations on either or both parties. The more crucial question is what to do next.

We start with the circumstances that ought to be considered. To repeat, the breach of the peace, though started by petitioners, was not solely their responsibility as it turned out. For criminal charges and counter charges were filed by one group against the other. The reply brief of private respondent,

submitted on March 8, 1973, included a memorandum from a certain Attorney Rolando A. Velasco, speaking of the status of the criminal cases filed by the group of petitioners against management men, 28 , and of thirteen criminal cases as well as complaints against at least thirty individuals identified with private respondent. 29 In some of them the complainants did not press charges, and the cases were dismissed. With the submission of such data, its objection to the admission of information similar in character as to the status of the criminal cases against petitioners loses weight. What is more, it does not appear as of this date as to who of the petitioners were found guilty of what was referred to it in the Shell opinion as committing serious acts of violence. As a matter of fact, the appealed order merely referred to the instances of picketing conducted illegally without specifically pin-pointing the culprits to whom such kind of conduct could be ascribed. It would seem therefore, that the wholesale dismissal of petitioners is far from warranted. It is to be admitted though that on a showing of having engaged in non-peaceful activities of a serious character, the right to re-admission is defeated.

This conclusion is further fortified by the stress on the security of tenure that is a notable feature of the present Constitution. As pointed out in a decision rendered only last month, Philippine Airlines, Inc. v. Philippine Air Lines Employees Association: 30 "The futility of this appeal becomes even more apparent considering the express provision in the Constitution already noted, requiring the State to assure workers 'security of tenure.' It was not that specific in the 1935 Charter. The mandate was limited to the State affording protection to labor, especially to working women and minors, ....

... That is to conform to the ideal of the New Society, the establishment of which was to felicitously referred to by the First Lady as the Compassionate Society. 31 To the possible objection that in this Philippine Air Lines case, there was an order of reinstatement, it suffices by way of an answer that while the facts could be distinguished, the basic principle in accordance with a constitutional mandate, in the language of Justice Cardozo, speaks with a reverberating clang that drowns all weaker sounds.

It would imply at the very least that where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's concern for the workingman. There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. The misery and pain attendant on the loss of jobs then could be avoided if there be acceptance of the view that under all the circumstances of this case, petitioners should not be deprived of their means of livelihood. Nor is this to condone what had been done by them. For all this while, since private respondent considered them separated from the service, they had not been paid. From the strictly juridical standpoint, it cannot be too strongly stressed, to follow Davis in his masterly work, Discretionary Justice, 32 that where a decision may be made to rest an informed judgment rather than rigid rules, all the equities of the case must be accorded their due weight. Finally, labor law determinations, to quote from Bultmann, should be not only secundum rationem but also secundum caritatem.

4. This is all that needs to be said except to remind petitioners that the basic doctrine underlying the provisions of the Constitution so solicitous of labor as well as the applicable statutory norms is that both the working force and management are necessary components of the economy. The rights of labor have been expanded. Concern is evident for its welfare. The advantages thus conferred, however, call for attendant responsibilities. The ways of the law are not to be ignored. Those who seek comfort from the Shelter that it affords should be the last to engage in activities which negate the very concept of a legal order as antithetical to force and coercion. What is equally important is that in the steps to be taken by it in the pursuit of what it believes to be its rights, the advice of those

conversant with the requirements of legal norms should be sought and should not be ignored. It is even more important that reason and not violence should be its milieu.

WHEREFORE, the appealed order of February 4, 1972 as affirmed in a resolution of March 14, 1972 is reversed and set aside. Petitioners against whom no criminal charges filed in relation to their acts referred to in this decision are still pending are ordered reinstated to their employment, with the right to backpay corresponding to eighteen (18) months, at the respective rates of compensation they were being paid on February 4, 1972, without any deduction corresponding to any possible income earned elsewhere since their dismissal to the present. Those petitioners against whom criminal complaints have been filed shall be reinstated, with the right to backpay as herein indicated, only upon the final dismissal of said cases or their acquittal therein. Respondent Court is hereby ordered to implement this decision as expeditiously as possible. No costs.

G.R. No. 130957           January 19, 2000

VH MANUFACTURING, INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and HERMINIO C. GAMIDO, respondents.

DE LEON, JR., J.:

Before us is a petition for certiorari, under Rule 65 of the Rules of Court, seeking to annul the Decision1 and the Order2 of the National Labor Relations Commission (NLRC), First Division, dated February 27, 1997 and August 14, 1997, respectively, which set aside the Decision3 dated June 20, 1996 of the Labor Arbiter. Essentially, public respondent found and declared that the petitioner's allegation that private respondent slept on the job on February 10, 1995 was not proven and, as a result, there was no just and valid cause for his dismissal, and that even if there was, the penalty of dismissal was too harsh a punishment for violation of petitioner's Company Rule 15-b.1âwphi1.nêt

The facts of the case are the following:

Since November 5, 1985 private respondent was employed in petitioner's, business of manufacturing liquefied petroleum gas (LPG) cylinders.4 He served as a quality control inspector with the principal duty of inspecting LPG cylinders for any possible defects and earning P155.00 a day.5 His service with the company was abruptly interrupted on February 14, 1995, when he was served a notice of termination of his employment.6

His dismissal stemmed from an incident on February 10, 1995 wherein petitioner's company President, Alejandro Dy Juanco, allegedly caught private respondent sleeping on the job.7 On that same day, private respondent was asked through a written notice from the petitioner's Personnel Department8 to explain within twenty-four (24) hours why no disciplinary action should be taken against him for his violation of Company Rule 15-b9 which provides for a penalty of separation for sleeping during working hours. Without delay, private respondent replied in a letter which reads:

Sir, ipagpaumanhin po ninyo kung nakapikit ako sa aking puwesto dahil hinihintay ko po ang niliha hi Abreu para i quality pasensiya na po kung hindi ko po namalayan ang pagdaan ninyo dahil maingay po ang painting booth.10

Notwithstanding his foregoing reply, he was terminated.11

Feeling aggrieved, private respondent initially instituted on April 26, 1995 a criminal suit for Estafa, for alleged withholding of his salary, against the company President, Alejandro Dy Juanco.12 Said complaint was dismissed on June 22, 1995 for improper forum.13 He then filed on July 4, 1995 a complaint for illegal dismissal, praying for reinstatement to his position as quality control inspector.14 On June 20, 1996, Labor Arbiter Ricardo C. Nora rendered his decision upholding petitioner's position and declared that private respondent's dismissal is anchored on a valid and just cause and the latter's contention of denial of due process as devoid of merit.15

Private respondent then appealed the decision of the Labor Arbiter to the public respondent NLRC where it was assigned to the First Division. The NLRC reversed the decision of the Labor Arbiter and ordered herein petitioner to reinstate private respondent with full backwages less one-month pay.16 Inasmuch as public respondent in its Order dated August 14, 1997 denied petitioner's motion for reconsideration17, petitioner now challenges the correctness of the NLRC's decision and order via the instant petition.

Petitioner anchors its petition on two (2) grounds, to wit:

1. THE NLRC GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT GAMIDO'S DISMISSAL WAS NOT ANCHORED ON A JUST AND VALID CAUSE.

2. THE NLRC GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT DISMISSAL WAS TOO HARSH A PENALTY FOR GAMIDO'S VIOLATION OF COMPANY RULE 15-b.18

The instant petition must fail.

First. Basically, the reason cited for the dismissal of private respondent is sleeping on the job in violation of Company Rule 15-b. Was the private respondent sleeping on the job or was he merely idle and, as he claimed, waiting for the next cylinder to be checked? Evidence on this score is material, for it is the be-all and end-all of petitioner's cause, in view of the gravity of the penalty of separation, as provided by the Company Rules and Regulation. In termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause.19 What is at stake here is not only the job itself of the employee but also his regular income therefrom which is the means of livelihood of his family.

A thorough review of the record discloses that, contrary to the findings of the Labor Arbiter, petitioner's claim that private respondent slept on the job on February 10, 1995 was not substantiated by any convincing evidence other than the bare allegation of petitioner. The report20 of Ronaldo M. Alvarez, Acting Quality Control Department Head of petitioner corporation, on the circumstances which ultimately served as basis for the termination of private respondent's employment, did not confirm the alleged violation by private respondent of the pertinent Company Rule 15-b. The report merely stated private respondent's denial and response to petitioner's allegation which he reiterated in his written reply.21

Second. Petitioner's reliance on the authorities22 it cited that sleeping on the job is always a valid ground for dismissal, is misplaced. The authorities cited involved security guards whose duty necessitates that they be awake and watchful at all times inasmuch as their function, to use the

words in Luzon Stevedoring Corp. v.Court of Industrial Relations,23 is "to protect the company from pilferage or loss." Accordingly, the doctrine laid down in those cases is not applicable to the case at bar.

Third. While an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees, those directives, however, must always be fair and reasonable, and the corresponding penalties, when prescribed, must be commensurate to the offense involved and to the degree of the infraction. In the case at bar, the dismissal meted out on private respondent for allegedly sleeping on the job, under the attendant circumstances, appears to be too harsh a penalty,24considering that he was being held liable for first time, after nine (9) long years of unblemished service, for an alleged offense which caused no prejudice to the employer, aside from absence of substantiation of the alleged offense. The authorities cited by petitioner are also irrelevant for the reason that there is no evidence on the depravity of conduct,25 willfulness of the disobedience,26 or conclusiveness of guilt on the part of private respondent.27 Neither was it shown that private respondent's alleged negligence or neglect of duty, if any, was gross and habitual.28 Thus, reinstatement is just and proper.

WHEREFORE, the petition is hereby DISMISSED, and the challenged Decision and Order of public respondent NLRC are AFFIRMED. No pronouncement as to costs.1âwphi1.nêt

SO ORDERED.

G.R. No. 158703               June 26, 2009

TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES TEACHERS and EMPLOYEES ORGANIZATION (TIPTEO) and its member MAGDALENA T. SALON, Petitioners, vs.THE HON. COURT OF APPEALS and TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES, Respondents.

D E C I S I O N

BRION, J.:

Before this Court is the petition for review on certiorari1 challenging the Amended Decision dated May 22, 2003 of the Court of Appeals (CA) in the case Technological Institute of the Philippines v. Technological Institute of the Philippines Teachers and Employees Organization, CA G.R. SP No. 66896.2

THE FACTUAL BACKGROUND

The facts of the case, set out in the original CA decision promulgated on November 20, 2002,3 are summarized below.

Petitioner Magdalena T. Salon (Salon) was a College Instructor 3 of the Humanities and Social Science Department (HSSD) of respondent Technological Institute of the Philippines (TIP) and a

member of the Technological Institute of the Philippines Teachers and Employees Organization (TIPTEO). She commenced employment with the TIP on June 13, 1989.

On October 24, 2000, the TIP received complaints from students claiming that Salon was collecting P1.50 per page for the test paper used in the subject she was teaching at the time. She reportedly asked her students not to write on the test papers; these test papers were not returned to the students after the test. An allegation was made, too, that Salon committed an anomaly in the grading of her students.

Acting on the written complaints, the TIP – through Ms. Josephine Royer (Ms. Royer), the school's Assistant Faculty Coordinator – sent Salon a memorandum dated October 30, 2000 asking her to explain within 72 hours why she should not be disciplined on the basis of the complaints.4

Salon answered the charges on October 31, 2000.5 She explained that she collected only P0.50 for each page of the test papers, which sum she spent in photocopying the papers; the amount collected was within the limits the school had set. She admitted that she asked her students not to write on the test papers because there was no space on these papers where they could write their answers; it would be preferable to use the test booklets also provided to the students.

On the alleged grade manipulation, Salon explained that the incident involved the son of a fellow faculty member who actually failed her subject. Her fellow faculty member and mother of the student, upon learning of her son's failing grade, tried to persuade Salon to give her son a passing grade for fear that the father, if he learned of the failing mark, would harm his son. Salon claimed that she did not accede to the request; she gave the student a grade of 6.0 or "dropped" instead of giving him a grade of 5.0 or "failed."

The TIP created a three-man committee to conduct a formal investigation of the charges.6 The committee called a hearing on November 16, 2000 and issued the following findings:7

Recommendation:

1. Evidences (sic) show that Ms. M.T. Salon has changed the grade of Mr. Joseph Florante Manalo. She disregarded the TIP grading system when she gave a grade of 6.0 (officially dropped) inspite of the class performance records. She admitted that the grade is 5.0 (failed) but made it 6.0 (officially dropped) which according to her is 'lesser degree of failure' because Mr. Joseph Florante Manalo, is the son of a co-faculty, Mrs. Elma Manalo in HSSD. She also changed the entry in the class record. The class record was already submitted to TIP so that this is already a TIP document.

2. With regards to the printed test questionnaires, Mrs. M.T. Salon has violated Memorandum No. P-66 SY 1992-1993 by not getting the approval of the department officer. It is unauthorized selling which the General Disciplinary Sanctions (Memorandum No. P-2 s. 1999-2000) classifies as a GRAVE offense.

3. The committee recommends the application of the corresponding sanction as contained in the General Disciplinary Sanctions (Memo No. P-3 s. 1999-2000) which is dismissal.

4. The recommendation shall take effect only after the approval of the President.

On December 4, 2000, the office of TIP President Dr. Teresita U. Quirino notified Salon of the termination of her service as member of the faculty of HSSD effective thirty (30) days from receipt of the notice.8 The dismissal was based on the investigation committee's recommendations.

Salon sought assistance from TIPTEO which then requested the TIP that a joint grievance investigation be conducted to take up her dismissal. The TIP denied the request arguing that Salon's dismissal was not proper for the grievance machinery because the ground for dismissal was a violation of the school's rules and regulations.

Faced with this denial, TIPTEO opted to file a complaint for illegal dismissal with the National Conciliation and Mediation Board (NCMB) in the National Capital Region. At the NCMB, the parties agreed to submit the dispute to Voluntary Arbitrator Alfonso C. Atienza for voluntary arbitration.

On July 14, 2001, the voluntary arbitrator rendered an award in Salon’s favor.9 The arbitrator ruled that Salon was dismissed without a valid cause and without due process. He found that the school was unable to prove by substantial evidence that Salon committed the acts charged. At the most, the arbitrator concluded that the TIP only proved that there was no permission, written or verbal, before Salon prepared and sold the test papers to her students. On the due process issue, the arbitrator found that Salon was not afforded an opportunity for a real investigation because she was denied the right to counsel; neither was she afforded the right to a hearing under the grievance procedure of the CBA and under the Labor Code.

The voluntary arbitrator ordered the TIP to reinstate Salon as College Instructor 3 with full backwages, but suspended her for one month "for not getting a written permission from responsible officials of the school in charging students with the cost of examination papers."

The TIP sought the reconsideration of the award, but the voluntary arbitrator denied the motion on September 16, 2001. The TIP thereupon elevated the case to the CA through a petition for review. In a decision promulgated on November 20, 2002, the appellate court affirmed the voluntary arbitration award resulting in the dismissal of the petition.10 The appellate court agreed with the voluntary arbitrator that nothing in the TIP rules warrants the dismissal of a faculty member for selling examination papers without the school's written permission. It was not convinced that the infraction committed by Salon is a grave offense referred to in Memorandum No. P-25 s. 2000-2001 that the TIP cited as justification for the dismissal of Salon.11 The relevant portion of this memorandum reads:

1. In line with the school's thrust to provide quality education and service to its students, a photocopy center is created with the major task of servicing students on their handout requirements.

x x x

4. Please discuss these to your respective faculty members on one of your department meetings.

x x x

4.1 Explain to them the objectives for the creation of said photocopy center. Emphasize to them that they are not authorized to sell instructional materials, and to do so is a grave offense. Explain further that this is one of the reasons why the center is being formed.

x x x

4.2 Make clear to them that services of the photocopy center shall be limited to required handouts and instructional materials assigned by faculty members and will not include other photocopy needs of the student.

The CA ruled that examination papers do not fall within the term "instructional materials" that the memorandum covers; the memorandum only covers handouts and instructional materials needed by students and assigned by their teachers. The CA explained that from their nature and use, handouts and instructional materials are entirely different from examination papers; instructional materials are used to present and convey lessons to the students; whereas, examination papers measure the students’ degree of comprehension of their lessons.

On a related matter, the CA held that if Salon committed an infraction, it should be limited to the fact that she did not ask the Faculty Coordinator and the Department Head to determine the cost of the papers which she disseminated among her students, as required under paragraph 4 of Memorandum No. P-22 s. 1988-1989.12Additionally, the CA held that Salon could be cited for tampering with the grade of her student Joseph Florante Manalo (Manalo) – a violation of the TIP grading policy.

Undeterred, the TIP moved for the reconsideration of the CA decision. The CA granted the motion and handed down the now assailed amended decision on May 22, 2003.13 It examined the facts for the second time and concluded that it erred in excluding examination papers from the ambit of the term "instructional materials." It reasoned out that "examination papers play as much, maybe even more importance in the determination of a student's aptitude than any kind of instructional material x x x to exclude examination papers from the perimeters of the term 'instructional materials' would amount to an incongruity." The CA also faulted Salon for changing the grade of Manalo from 5.0 (failed) to 6.0 (officially dropped) after the grades had been submitted.

For the reason that the infractions committed by Salon "were unrefuted and proven," the CA found basis for the TIP's decision to dismiss her for the commission of a grave offense. This notwithstanding, the appellate court deemed it "in accord with justice and equity to award her separation pay," in consideration of Salon's more than ten (10) years of service to TIP and because she had not previously been involved in any similar act or one that warrants a heavier penalty.

Accordingly, the CA annulled its decision dated November 20, 200214 as well as that of the Voluntary Arbitrator dated July 14, 2001.15 It declared that Salon was dismissed for a valid cause, but awarded her separation pay at one month's basic salary for every year of service. From this decision, Salon and TIPTEO (now represented by the present counsel upon the demise of Mr. Antonio Diaz who had assisted her [Salon] from the beginning) now come before this Court to challenge the amended CA decision.

THE PETITION

The petition submits that the CA erred:

1. In ruling that Salon was dismissed for a valid cause.

2. In not finding that Salon was denied procedural due process.

3. In not dismissing the petition outright despite its failure to attach a certified statement of material dates in violation of Section 3, Rule 46 in relation to Rule 65 of the Rules of Court, and Revised Circular No. 1-88.

On the first ground, Salon and her union bewail the CA's shifting appreciation of the nature of test/examination papers, from "non-instructional" material to "instructional" material relying on the same policy document of the school, Memorandum No. P-25 s. 2000-2001.16 They contend that the appellate court's change of mind was not supported by any authority. Citing the dictionary definition17 of "instructional" and "test," they argue that "instructional material" and "test papers" are two different things; "test" is "a series of questions, problems, etc., intended to measure the extent of knowledge, aptitudes, intelligence, and other mental traits"; "instructional" is an adjective which means "pertaining or relating to instruction; educational; containing information."

Further, petitioners posit that it is incorrect to conclude that Salon is guilty of selling photocopied test questionnaires to her students; she was not selling but merely securing reimbursement for the personal expenses she incurred in the preparation of the test papers. Salon cited as authority Memorandum No. P-22 s. 1988-1989,18 which expressly set guidelines for the cost of stenciled examination papers, P0.40 for newsprint, and P0.60 for whitewove paper.

Charging the students for the examination papers could have been avoided according to Salon had TIP performed its obligation of providing test and examination papers to the students; faculty members, who are not allowed to use school computers and typewriters in the preparation of the materials, had to type and photocopy the examination papers at their own expense and for which they had to seek reimbursement.1avvphi1

On the violation of the school's grading system, Salon submits that she did it for a noble intention; she changed the grade of Manalo – the son of a fellow faculty member – from a failing mark of 5.0 to a grade of 6.0 (dropped) to lessen the impact of the student’s mother’s guilt and to keep the student from being punished by his father, as she explained in her letter dated November 14, 2000 to TIP President Dr. Teresita Quirino.19

Salon claims that when she realized that she violated the TIP's grading system, she consciously tried to rectify her error; on October 20, 2000, during the submission and re-checking of her grading sheets, she asked the permission of Ms. Royer to use the Arlegui computer room to correct the grade of Manalo, but Ms. Royer directed her to defer the correction until the date set by the Registrar's Office for the final audit of grades; the scheduled date, however, was overtaken by her dismissal from her teaching post. She submits that there was no malice in what she did or an intent to violate the school's grading system; at the very least, she committed an error in judgment that does not warrant the harsh penalty of dismissal; her dismissal would violate the constitutional guaranty of security of tenure.

On the due process issue, Salon points out that the investigation of the charges against her was a "hoax"; no genuine investigation took place as she stated in her affidavit dated June 27, 2001;20 the investigation was merely a gripe session where the complaining students hurled a barrage of malicious allegations against her; she was not afforded an opportunity to defend herself and to be represented by counsel of her own choice or a representative from the union. Salon further submits

that the TIP failed to comply with the two-notice requirement before she was terminated from employment – (1) a first notice apprising her of the particular acts or omission for which she was being dismissed, and (2) a second notice informing her of the school's decision to dismiss her. She contends that the first notice issued by the TIP merely directed her to submit her explanation regarding the "selling of photocopied examination," and did not inform her that this was a ground for dismissal.

In her third assignment of error, Salon faults the CA for not dismissing the TIP's petition outright for its failure to attach a certified statement of material dates in violation of Section 3, Rule 46 in relation with Rule 65 of the Rules of Court and Revised Circular No. 1-88. She submits that a perusal of the TIP's petition for review, dated October 1, 2001,21 reveals that there was no verified statement of material dates accompanying the petition – a defect which cannot be cured by the incorporation of material dates in the body of the petition.

Petitioners pray that the CA's amended petition be set aside; that Salon's dismissal be declared illegal; and that she be reinstated with full backwages.

THE CASE FOR TIP

The TIP’s Comment dated September 5, 200322 and Memorandum dated March 25, 200223 commonly justify Salon's dismissal on grounds of: (1) tampering or falsifying the grade of a student, which is a serious misconduct and an act of dishonesty and, (2) selling of test papers without the approval of the school, which is a grave offense under the Manual of Regulations for Private Schools and TIP's general disciplinary sanctions.24

On the first infraction, the TIP laments that the Voluntary Arbitrator ignored Salon's involvement in the incident on the excuse that the complaint was not notarized. The TIP brushes aside the technical deficiency and focuses on the substance of the offense charged – that Salon admitted that she changed the grade of her student Manalo from a failing grade of 5.0 to a mark of 6.0, which means that the student did not fail, but "officially dropped" the subject; the act constituted tampering, a violation not only of the school's explicit rules and regulations, but also of the Manual of Regulations for Private Schools; the alteration of the grade of her student constituted serious misconduct in relation with the performance of Salon's duties that rendered her unfit to continue working for the school; it was also an act of dishonesty, a clear disregard of her duty to serve as an example to her students and to others. While Salon claimed that she did it with the noble intention of giving the student a lesser degree of failure, it was a clear falsification of student records, which is a valid ground for termination of employment under the Manual.

Regarding the charge of selling test questionnaires without approval, TIP again relies on the results of the investigation undertaken by a committee created for the purpose. The committee found Salon to have violated Memorandum No. P-66 s. 1992-1993,25 which provides among others:

1.0 All faculty members are reminded that

x x x

1.3 Faculty members who intend to use mimeographed or photocopied test questionnaires should first refer these to their respective department officers. If approved, they should not sell these more

than the cost of the prevailing price of photocopies which are between 0.25 to .035 centavos per page.

x x x

2.0 Any faculty member violating the school's policies will be subject to disciplinary action, either suspension or dismissal depending on the gravity of the offense.

TIP contends that Salon did not ask for the approval of the school on her selling and costing of the test questionnaires, an offense classified as grave under the general disciplinary sanctions of the school, or Memorandum No. P-3 s. 1999-2000, the penalty for which is dismissal. It further contends that in an attempt to justify her acts, Salon cited Memorandum No. P-22, s. 1988-1989 regulating the selling of mimeographed examinations, which it argues cannot prevail over a subsequent issuance, Memorandum No. P-66 s. 1992-1993 and Memorandum No. P-25 s. 2000-2001, which set guidelines for the use of the photocopy center, not acts of teachers. It explains that under the two memoranda, the selling of test papers without authorization from school authorities is a prohibited act.

Also, the school takes exception to Salon's reliance on Memorandum No. P-25 s. 2000-200126 on the use of the photocopy center, especially on her claim that the test questionnaire is not an instructional material and, therefore, can be sold to students. It faults the voluntary arbitrator for his shortsighted appreciation of the case; the recommendation of the investigating committee clearly reflected that the rule violated was Memorandum No. P-66 s. 1992-1993.27 This notwithstanding, the TIP argues that Memorandum No. P-25 s. 2000-2001 and Memorandum No. P-22 s. 1988-1989 must be viewed in relation with the prohibition under Section 94 of the Manual of Regulations for Private Schools against any form of collections from students.28 It thus posits that the question of whether "test questionnaires" are instructional materials becomes irrelevant since the prohibited act is the selling or collecting of contributions without the approval of the school. It is quick to add, however, that the CA is correct in classifying examination papers as "instructional materials."

On the issue of due process, the TIP claims that it duly notified Salon of the charges against her consisting of (1) her having collected money from her students for test papers without the approval of the school, and (2) the complaint of the father of the tampering of the grade of his son (Manalo). The school asked Salon to submit her written answer to the charges against her. She was also given the opportunity to explain her side at the investigation hearing. Thereafter, she was given the required notice of termination.

On Salon's third assignment of error, the TIP submits that the petition for review it filed with the CA complied with the requirement on statement of material dates under the Rules of Court.29 It disputes Salon's argument that it is not sufficient to state the material dates in the body of the petition and that a separate verified statement must be attached. It maintains that a perusal of the specific applicable rule shows that the statement of material dates in a petition for review under Rule 43 need not be in a separate attachment under oath.30

The TIP then points out that the petition filed with the CA states that the school received the decision of the voluntary arbitrator dated July 14, 2001 on August 10, 2001; on August 16, 2001, it moved for reconsideration of the voluntary arbitration award, and received on September 17, 2001 the order dated September 6, 2001, denying the motion for reconsideration. It explains that with the verification/certification under oath that "all allegations in the petition for review are true and correct," the statements of material dates made on pages 1 and 4 of the petition are therefore verified or

certified under oath. The CA thus held that since a review of the material dates revealed that the petition was filed within the fifteen-day period from petitioner TIPTEO's receipt of the voluntary arbitrators' denial of its motion for reconsideration, the petition could be given due course.31

The TIP lastly contends that under the Court's Revised Circular No. 1-8832 that Salon cited, the dismissal of a case where there is no verified statement of material dates is at the discretion of the court. It then concludes with the statement that it has been held in a number of cases that rules on technicalities are adopted to serve justice and equity, and not to hamper them.

THE COURT'S DECISION

We resolve to DENY the petition for lack of merit.

The Procedural Issue

We first resolve the procedural question raised – the alleged failure of TIP to attach a verified statement of the material dates to its petition with the CA, as required by the Rules of Court33 and Supreme Court Revised Circular No. 1-88.34

We clarify in this regard that the review the TIP filed with the appellate court was not a special civil action forcertiorari under Rule 65 of the Rules of Court; it was an appeal to the CA through a petition for review under Rule 43. This is consistent with our ruling in Luzon Development Bank v. Association of Luzon Development Bank Employees35 that decisions of voluntary arbitrators or panel of voluntary arbitrators should be appealable to the CA. The CA correctly treated the petition of TIP as an appeal filed under Rule 43 which, parenthetically, also requires a statement of material dates in the petition.36 The rationale for the requirement is to enable the appellate court to determine whether the petition was filed within the period fixed in the rules.37

The CA reviewed the material dates contained in the petition and concluded that the petition "was filed within the fifteen (15)-day period from receipt of the voluntary arbitrator's denial of its motion for reconsideration x x x ." Proceeding from this premise and in the exercise of the discretion granted it by the Rules in considering technical deficiencies, the CA concluded that the petition "could be given due course."38 We respect the CA’s exercise of its discretion as it was exercised within the limits allowed by the Rules; the material data on the filing of the petition are reflected in the petition. The CA was therefore properly guided in considering whether the petition had been timely filed. Consequently, we declare that the CA committed no reversible error when it gave due course to the petition.

The Substantive Issues

a. The Sale of Papers

The first substantive issue is on the sale of test papers to students. We find it unfortunate that the tribunals below failed to recognize the appropriate TIP rule that should govern the situation. Thus, Memorandums Nos. P-22, P-25, and P-66 have all been invoked. To clear the air, Memorandum No. P-22 is an issuance on August 4, 1988 on the subject: Mimeographed Examinations whose relevant terms provide:39

There have been complaints received by this office that a number of teachers have been abusing the use of printed test materials to the detriment of the students:

1. A certain teacher uses the same printed matter in all of his classes and charges each student P1.00. This printed test material is only one page.

2. Some teachers are having printed examinations for which they charge the students exhorbitantly.

x x x

To correct these practices we have several suggestions:

x x x

3. Faculty members who have no other recourse but to print their examinations should ask for the permission of their Faculty Coordinator, Department Head or Dean before they sell such examination papers to students.

4. The cost of the stenciled examination paper should be determined by the Faculty Coordinator, Department Head and Dean by presenting the official receipts or the cost of printing. More or less, the cost per page should be for Newsprint paper – P0.40 and Whitewove paper – P0.60.

For your guidance and strict compliance effective this semester SY 1988-89.

We quote this Memorandum in full because it indicates the concern that the school sought to address in coming out with a regulation, which concern is exactly the cause for the students’ complaints. The Memorandum stresses, too, that an approval process had been in place as early as 1989.

Memorandum No. P-25 issued in 2000-2001 is on the subject of PHOTOCOPY CENTER, "created with the major task of servicing students on their handout requirements" and "shall be limited to required handout instructional materials assigned by faculty members and will not include other photocopy needs of the students."40 Apparently, this Memorandum addresses its own objectionable practice and is very specific on the concern it addresses – handout instructional materials.

Memorandum No. P-66 issued on April 23, 1993 is on the subject of "UNAUTHORIZED BOOKBINDING OF REPORTS AND PROJECTS, MIMEOGRAPHING OR PHOTOCOPYING OF TEST QUESTIONNAIRES, HANDOUTS, OR ANY PRINTED MATERIAL." Significantly, this Memorandum specifically provides that "Faculty members who intend to use mimeographed or photocopied test questionnaires should first refer these to their respective department officers. If approved, they should not sell these more than the cost of the prevailing price of photocopies which are between P0.25 to P0.35 centavos per page. x x x 2. Any faculty member found violating the school’s policies shall be subject to disciplinary action, either suspension or dismissal, depending on the gravity of the offense."

Under these regulatory measures, it appears clearly that Memorandum No. P-22, while specifically on the subject of Mimeographed Examinations, is not the current TIP issuance on the matter. Memorandum No. P-66 is the latest issuance and the one that specifies the requirements and penalizes violations. On the other hand, Memorandum No. P-25 appears to be an issuance with little relevance on the present dispute because it deals with instructional materials and by its own terms does not cover "other photocopy needs of the students." An additional reason for its irrelevance, of course, is the existence of at least two issuances that deal specifically with examination papers.

Salon never denied that she had charged her students the cost of their examination papers without the approval of the proper school authorities pursuant to Memorandums Nos. P-22 and P-66. The rationale behind the school policy of closely regulating the cost and sale of examination papers is to free the students from avoidable financial burdens, and to prevent the abuse of the use of printed examination papers by the teachers, as expressly stated in Memorandum No. P-22. It is of no moment that Salon kept within the price range set by the school for the cost per page of the examination paper. Her transgressions spring from her failure to secure prior approval of her use of photocopied exam papers, and of the attendant cost. These transgressions link up directly with the students’ allegations that they had to return and could not write on the exam papers they paid for – a possible indicator of the intent to abuse.41

Salon's guilt is not erased or mitigated by her excuse that she had no choice but to secure reimbursement from the students for the cost of the examination papers that the school should provide but does not. The school does not deny that the teachers have to be reimbursed, but at the same time it imposes measures to avoid abuses. Unless there is a showing of patent unreasonableness (and we find none in this case), these measures have to be complied with. In saying this, we do not thereby indicate our approval of the school practice of not providing test papers as part of services to students covered by their matriculation fees. Tests are the traditional and the accepted mode of measuring students’ performance and should be part and parcel of the basic services that a school should offer. Charging their costs to students at the time of the examination renders the students’ capacity to take the examinations dependent on their finances at examination time. However, these are policy questions outside the scope of our present inquiry, as the substantive reasonableness of the school’s policies and issuances is not a question directly before us, nor are these issuances patently unreasonable. Thus, they do not enter the picture at all in the determination of Salon’s guilt and penalty.

b. Grade Tampering

Salon admitted that she changed the grade of Manalo from one of "failure" (5.0) to "dropped" (6.0) at the behest of a colleague, the mother of Manalo, to save the son from being harmed by his father for his failing grade. Salon thought she was doing the family of Manalo a favor, but her act produced the opposite result because the father himself lodged a complaint against her for grade tampering;42 as suspected all along, the father was not satisfied with a grade of 6.0 for his son.

As in the case of unauthorized selling of examination papers, Salon's guilt is not erased or mitigated by the fact that she meant well, or that she tried to rectify her indiscretion after realizing that she violated the grading system of the school.43 Two differences exist between the examination paper selling violation and the present one. First, her examination paper violation is largely a transgression against a school regulation. The present one goes beyond a school violation; it is a violation against the Manual of Regulation for Private Schools whose Section 79 provides: 44

Sec. 79. Basis for Grading. The final grade or rating given to a pupil or student in a subject should be based on his scholastic record. Any addition or diminution to the grade x x x shall not be allowed.

Second, the present violation involves elements of falsification and dishonesty. Knowing fully what Manalo deserved, Salon gave him a grade of 6.0 instead of a failing grade. In the process, she changed – in short, falsified – her own records by changing the submitted record and the supporting documents. Viewed in any light, this is Serious Misconduct under Article 282(a) of the Labor Code, and a just cause for termination of employment.

Be that as it may, the mother of Manalo, being a teacher herself, should have been questioned or investigated for urging Salon to give her son a passing grade. What Mrs. Manalo did was in itself highly irregular and should have been subjected to disciplinary action, in the interest of fairness.

The Due Process Issue

Salon claims that her right to due process was violated because her investigation was a "hoax,"45 a gripe session where the complaining students were allowed to engage in a spontaneous barrage of malicious allegations against her, and where she was not afforded an opportunity to defend herself and to be represented by a counsel of her own choice or by a union representation. She adds that she was not given any notice before her termination.

The records of the case belie these claims.

Salon was given the opportunity to show cause why she should not be dismissed. First, in a Memorandum dated October 30, 200346 issued by Ms. Royer, Assistant Faculty Coordinator of the HSSD, Salon was asked to explain why no disciplinary action should be taken against her for "selling photocopied examination papers." She was also furnished a copy of the complaint of the father of Manalo regarding her "tampering" the grade of Manalo.47 Salon submitted her explanations to the two documents consisting of (a) her letter dated October 31, 2004 addressed to Ms. Royer, where she admitted photocopying the examination papers and charging her students P0.50 a page;48 and (b) her letter dated November 14, 2000 addressed to TIP President Dr. Teresita U. Quirino, where she admitted changing the grade of Manalo.49

Second. An investigation was conducted by a committee created by the TIP, which submitted a report/recommendation dated November 20, 2000, confirming the unauthorized selling of examination papers and the tampering of the grade of Manalo. The committee recommended Salon's dismissal.50

Third. In a memorandum dated December 4, 2000,51 Dr. Quirino advised Salon that her position as Faculty Member is terminated effective 30 days from receipt of the memorandum.52 This was her notice of termination – the 2nd notice that statutory due process requires in a dismissal situation.

Thus, not only was Salon notified in writing about the charges against her, she was given a reasonable opportunity to explain her side; she was also called to an investigation where, again, she had the opportunity to explain why she should not be dismissed. She was only dismissed after the conclusion of the investigation and after she had been given a second notice in writing that she was being terminated as a faculty member of the school. In short, she has nothing to complain about in terms of the process she underwent that led to her dismissal.

The Penalty

In the same breath that she justifies her actions, Salon entreats this Court to impose on her a penalty less harsh than dismissal if she will be held accountable for her misdeeds.53 She points out in this regard that it was the first time that she was charged of an offense, and that she had been with the school for more than ten (10) years already, and there was no bad faith or malicious intention on her part.54

We do not find these entreaties sufficiently compelling or convincing as Salon is no ordinary employee. She is a teacher from whom a lot is expected; she is expected to be an exemplar of uprightness, integrity and decency, not only in the school, but also in the larger community. She is a role model for her students; in fact, as she claims, she stands in loco parenti to them. She is looked up to and is accorded genuine respect by almost everyone as a person tasked with the heavy responsibility of molding and guiding the young into what they should be – productive and law-abiding citizens.

What Salon committed is a corrupt act, no less, that we cannot allow to pass without giving a wrong signal to all who look up to teachers, and to this Court, as the models who should lead the way and set the example in fostering a culture of uprightness among the young and in the larger community. From the personal perspective, Salon demonstrated, through her infractions, that she is not fit to continue undertaking the serious task and the heavy responsibility of a teacher. She failed in a teacher’s most basic task – in honestly rating the performance of students. Her failings lost her the trust and confidence of her employer, and even of her students.

Under the circumstances, our conclusion can only be for Salon’s dismissal for two counts of valid causes – i.e., for serious violation of TIP’s Memorandum No. P-66, for unauthorized selling of examination papers, and for serious misconduct, for falsifying Manalo’s grade and violating the grading rules under the Manual of Regulations for Private Schools.

The affirmation of the penalties the CA imposed brings into focus the appellate court’s award of separation pay in consideration of her more than 10 years of service with TIP.55 Given the finding of guilt and the penalty imposed, no basis exists to support and justify this award. No court, not even this Court, can make an award that is not based on law.56 Neither can this award be justified even if viewed as a discretionary financial assistance, since this kind of award can be imposed only where the cause for dismissal is not serious misconduct or a cause reflecting on the employee’s moral character.57 The dismissal we affirm is precisely for serious misconduct. The causes cited reflect as well on Salon’s moral character. Hence, we delete any award of separation pay/financial assistance that the appellate court decreed.

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. We hereby AFFIRM the amended decision of the Court of Appeals promulgated on May 22, 2003, but DELETE the award of separation pay. Costs against the petitioners.

SO ORDERED.

G.R. No. 143511               November 15, 2010

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, vs.JOEY B. TEVES, Respondent.

D E C I S I O N

PERALTA, J.:

For review on certiorari are the Decision1 dated April 24, 2000 and the Resolution2 dated May 31, 2000 of the Court of Appeals (CA) in CA- G.R. SP No. 50852, affirming the Decision of the National Labor Relations Commission (NLRC) which ordered the reinstatement of respondent Joey B. Teves to his former position without loss of seniority rights and other privileges appurtenant thereto with full backwages until actually reinstated.

The antecedent facts are as follows:

Respondent was employed by petitioner Philippine Long Distance Telephone Company in 1981 as Clerk II until his termination from service on June 1, 1992. Petitioner terminated respondent through an Inter-Office Memorandum3 dated May 29, 1992 on account of his three (3) unauthorized leaves of absence committed within three (3) years in violation of petitioner’s rules and regulations.

Respondent was absent from August 23 to September 3, 1990 as his wife gave birth on August 25 but was only discharged from the hospital on September 2, 1990 due to complications; since they had no household help, he had to attend to his wife's needs in the hospital, as well as the needs of their four kids, including bringing them to school. Respondent called up through a third party to inform petitioner that he would go on an extended leave. Upon his reporting for work on September 4, 1990, he wrote petitioner a letter4 confirming his leave of absence without pay for that period and stating the reasons thereof, with his wife's medical certificate attached. Dissatisfied, petitioner required respondent to submit further explanation which the latter did reiterating his previous explanation. However, in petitioner's Inter-Office Memorandum5 dated October 3, 1990, it found respondent’s explanation to be unacceptable and unmeritorious for the latter's failure to call, notify or request petitioner for such leave; thus, petitioner suspended respondent from work without pay for 20 days, effective October 8, 1990.

Respondent was absent from May 29 to June 12, 1991. He was sent a Memorandum6 reminding him of the July 2, 1990 Memorandum requiring written application prior to a leave of absence without pay and was directed to report for work on June 13, 1991 at ten o'clock in the evening lest he be meted a disciplinary action. Respondent reported for work on even date, and was required to explain in writing why no disciplinary action should be taken against him for his unauthorized leave of absence. In a Memorandum7 dated June 17, 1991, respondent explained that his absences were due to the fact that his eldest and youngest daughter were sick and had to be confined at the nearby clinic; and the medical certificate confirming said confinement was to follow. Further, respondent alleged that he had relayed said message to an officemate, Luis V. Marquez, who unfortunately did not also report for work. As petitioner found respondent’s explanation insufficient, respondent was suspended without pay for 45 days effective July 17, 1991.

Eight months thereafter, respondent availed of a seven-day leave of absence and extended such leave to complete his annual vacation leave, which was to end on February 11, 1992. However, respondent failed to report for work from February 11 to February 19, 1992. Petitioner then sent him a Memorandum8 dated February 19, 1992, directing him to report for duty within 72 hours,

otherwise, his services would be terminated for abandonment of work. Respondent reported for duty and was served another Memorandum requiring him to explain in writing why no disciplinary action should be taken against him for his unauthorized absences. In his explanation, respondent stated that he incurred said absences because he had many accounts in the office which were already due and demandable and thought of prolonging such payment by absenting himself. He further stated that he realized that what he did was wrong and only worsened his situation and asked for another chance. Petitioner found such explanation totally unacceptable. Thus, in an Inter-Office Memorandum9 dated May 29, 1992 addressed to respondent, the latter was terminated from service effective June 1, 1992 due to his third unauthorized absence within a three-year period.

On March 9, 1993, respondent filed a Complaint for illegal suspension, illegal dismissal, payment of two Christmas bonuses and monthly rice subsidy. Petitioner filed its Position Paper.

On May 13, 1994, Labor Arbiter (LA) Benigno C. Villarente, Jr. rendered his Decision,10 the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered declaring that the dismissal of complainant is LEGAL. Conformably with the preceding discussions, however, respondent is hereby directed to extend complainant financial assistance in the amount of TWENTY THOUSAND PESOS (P20,000.00).

Complainant's claims for bonuses and rice subsidy have not been substantiated and are, therefore, hereby DISMISSED. 11

In his decision, the LA found that (1) respondent had committed his third unauthorized absence within a three-year period and did not offer an acceptable reason therefor; (2) respondent's repeated unauthorized absences displayed his irresponsibility and lackluster attitude towards work; (3) the reasons for his absences which related to the need to attend to his family cannot mitigate his apparent neglect of duty to his employer; and (4) his absences were in violation of petitioner's rules and regulations. The LA found that respondent was not denied due process, since he was notified of all his infractions and was allowed each time to submit his explanation. The LA awarded financial assistance to respondent as a measure of compassionate justice taking into consideration respondent's 11 years of service and since the infraction committed did not amount to a serious misconduct nor did it involve moral turpitude.

Respondent interposed an appeal with the NLRC.

On January 30, 1997, the NLRC rendered its Decision12 reversing the LA’s Decision, the decretal portion of which reads:

WHEREFORE, the instant appeal is hereby given due course. The appealed decision is hereby SET ASIDE. Respondent is hereby declared guilty of illegally terminating complainant Joey B. Teves' employment. As such, respondent Philippine Long Distance Telephone Company is hereby ordered to reinstate complainant to his former position without loss of seniority rights and other privileges appurtenant thereto with full backwages until actually reinstated. Respondents are likewise ordered to pay complainant's unpaid wages for the period covering 15-31 May 1992, 13th month pay, Christmas Bonuses, accrued rice subsidy of one (1) sack a month, or its money equivalent of P350.00 at the time of his dismissal.13

In reversing the LA, the NLRC found that respondent's absences from August 23 to September 3, 1990 was brought to petitioner's attention when respondent called through a third party that respondent would go on an extended leave. Moreover, the reason for his prolonged absence, i.e., the unforeseen complications of his wife's condition after giving birth, supported by a medical certificate, was an eventuality that needed to be attended to with priority which should have been accorded credence and favorably considered; and that dismissing such explanation and placing respondent under suspension, when his leave of absence was without pay, merely exacerbated his family's plight.

The NLRC found that respondent's failure to verify whether his message for petitioner through a co-employee that his (respondent) two daughters were sick and confined at a nearby clinic was duly delivered constituted a neglect of duty. However, the NLRC took into consideration respondent's reason for such absence and stated that certain leniency should have been accorded respondent and that his suspension for 45 days was too harsh for the said offense.

While the NLRC found the reason offered by respondent for his absences from February 11 to 19, 1992 unacceptable and unreasonable, respondent should have only been penalized accordingly. The NLRC found that respondent's dismissal from service was illegal, since he had been heavily punished for each and every offense imputed to him and that in his eleven years of service, this was the first time that he was falsely charged.

The NLRC found that petitioner failed to controvert respondent's claims for unpaid salary from May 15 to 31, 1990, 13th month pay and Christmas bonuses and rice subsidy for one month or its money equivalent.

Petitioner's motion for reconsideration was denied by the NLRC in a Resolution14 dated February 26, 1997.

On May 29, 1997, petitioner filed before us a Petition for Certiorari with prayer for the issuance of a temporary restraining order and/or injunction assailing the January 30, 1997 Decision and February 26, 1997 Resolution of the NLRC. Respondent filed his Comment thereto. Petitioner then filed a Reply.

On November 12, 1997, respondent filed a Manifestation15 stating that he had already been reinstated by petitioner effective November 10, 199716 in compliance with the NLRC Decision.

Subsequently, in a Resolution17 dated December 9, 1998, we referred the petition to the CA in accordance with the St. Martin Funeral Home v. National Labor Relations Commission18 ruling.

On April 24, 2000, the CA rendered its assailed Decision, which affirmed and reiterated the NLRC decision.

The CA found that (1) petitioner complied with the two-notice requirement which was essential to respondent's right to due process; (2) respondent was given a notice to explain in writing why no disciplinary action should be meted on him for his unauthorized absences from February 11 to 19, 1992; and (3) when respondent’s explanation proved unacceptable to petitioner, respondent was sent another notice informing him of his termination by reason of three unauthorized absences within a three-year period, a conduct which was circumscribed in petitioner's rules and regulations. Notwithstanding compliance with the requirement of due process, the CA affirmed the illegality of

respondent's dismissal finding that respondent's comportment cannot be characterized as grave so as to constitute grave misconduct; that his first two leaves of absence were satisfactorily justified; and that he should not have been suspended from service by reason of such absences. However, the CA found that respondent’s failure to report for work on February 11 to 19, 1992 appeared to be the only unauthorized and unjustified leave of absence during his 11 years of stay with petitioner, and it did not merit the harsh penalty of dismissal.

Petitioner filed a motion for reconsideration, but was denied by the CA in a Resolution dated May 31, 2000.

Hence, this petition. Petitioner raises the following arguments in its Memorandum.

A.

IT IS ALREADY SETTLED THAT RESPONDENT'S PREVIOUS ABSENCES WERE UNJUSTIFIED AND UNAUTHORIZED IN LIGHT OF HIS VOLUNTARY ACCEPTANCE AND COMPLIANCE WITH THE SUSPENSIONS IMPOSED IN CONNECTION WITH SAID ABSENCES. HENCE, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT RESPONDENT MERELY COMMITTED ONE INSTANCE OF UNAUTHORIZED ABSENCE.

B.

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR AND ABUSE OF DISCRETION IN FINDING THAT RESPONDENT WAS ILLEGALLY DISMISSED CONSIDERING THAT:

1. THE TERMINATION OF RESPONDENT'S SERVICES IS JUSTIFIED APPLYING THE TOTALITY OF INFRACTIONS DOCTRINE.

2. THERE IS SUBSTANTIAL AND UNDISPUTED EVIDENCE ESTABLISHING THAT RESPONDENT IS AN ABSENTEE EMPLOYEE WHO HAS A PROPENSITY TO SIMPLY DISAPPEAR WITHOUT EVEN GIVING HIS EMPLOYER THE COURTESY OF A PRIOR NOTICE.19

Petitioner contends that the CA erred when it found that (1) what was involved in this case was merely one instance of an unauthorized leave of absence as all of respondent's absences where he was previously sanctioned were unauthorized; (2) the imposition of the penalty of suspension to respondent was justified and he had long been estopped from questioning the same; (3) respondent was suspended not so much for the reason behind the absences, but because of the manner by which he incurred the absence, i.e., by not informing petitioner causing undue prejudice to the company's operations; (4) respondent had a propensity to simply disappear without giving petitioner the courtesy of a prior notice; and (5) respondent never questioned the suspensions meted on him, but instead voluntarily complied with the suspensions without protest.

Petitioner argues that respondent's past infractions could be used as supporting justification to a subsequent similar offense which would merit respondent's dismissal; that the CA erred when it did not apply the totality of infractions doctrine but limited respondent's offenses to just one offense; and

that respondent's acts of absenting himself without prior notice, despite previous disciplinary actions, should be considered in its totality and not in isolation from one another.

Petitioner contends that the management's right to prescribe rules and regulations cannot be denied and that the employer may justly discharge from employment an employee who violates company rules and regulations. Petitioner avers that respondent’s length of service in the company cannot work in his favor, but should be taken against him.

The issue for resolution is whether or not sufficient ground exists for respondent's dismissal from service.

Respondent was terminated from employment by reason of his third unauthorized absence from February 11 to 19, 1992. Respondent absented himself because he had many accounts in the office which were already due and demandable, and he thought that absenting himself from work would prolong the payment of his financial obligations; and that he realized that his action was wrong which worsened his situation and asked for another chance. Such explanation was found by petitioner to be unacceptable; thus, respondent was terminated effective June 1, 1992 for committing three unauthorized absences within a three-year period. Petitioner found respondent to have committed the other two incidents of unauthorized absences from August 23 to September 3, 1990 and from May 29 to June 12, 1991.

The LA found that respondent’s dismissal was legal. However, the NLRC found that the two previous incidents of respondent’s alleged unauthorized absences were justified, and that while his absence from February 11 to 19, 1992 was unacceptable and unreasonable, he should have been penalized therefor accordingly, but not with dismissal from service. The CA affirmed the NLRC’s findings and concluded that respondent’s absences from February 11 to 19, 1992 was his first and only unauthorized absences during his 11 years of stay, and it did not merit the harsh penalty of dismissal.

Petitioner claims that respondent is an absentee employee who has a propensity to simply disappear without giving his employer the courtesy of prior notice; and that respondent was not sanctioned for the reasons given for his absences, but because of his failure to inform or give prior notice to petitioner.

We find partial merit in this argument.

Respondent’s first alleged unauthorized absences were from August 23 to September 3, 1990, wherein he went on leave without pay. In his letter dated September 4, 1990 addressed to petitioner, which he submitted upon reporting for work, as well as in his response dated September 10, 1990 to petitioner's memorandum dated September 7, 1990, respondent explained that his absences were due to the fact that his wife gave birth on August 25, but was only discharged from the hospital on September 2, 1990 due to complications; and that since they had no household help, he had to attend to his wife's needs in the hospital, as well as the needs of their four kids, including bringing them to school. Petitioner found the explanation unacceptable and unmeritorious as he did not bother to call, notify or request for a leave of absence; thus, respondent was suspended from service without pay equivalent to 20 days.

Respondent’s second alleged unauthorized absences were from May 29 to June 12, 1991. When asked to explain his absences during the said period, respondent explained that his eldest and youngest daughters were sick and were confined at a nearby clinic; and that he relayed such

emergency and the fact that he would not be able to report for work to a co-employee, Luis V. Marquez, who unfortunately did not also report for work. Petitioner noted respondent's negligence in failing to notify it of his intention to go on leave, or to verify whether the request for leave, allegedly through a third party, had been approved. Petitioner suspended respondent for 45 days.

Notably, the alleged two prior incidents of respondent’s unauthorized absences above-mentioned were due to a family emergency or sickness. Respondent’s explanations should have been given a kind consideration by petitioner. An employee cannot anticipate when sickness or emergencies in the family may happen, thus, he may not be able to give prior notice or seek prior approval of his absence, but could only do so after the occurrence of the incident.

However, respondent had shown that he had given petitioner prior notice of his absences from August 23 to September 3, 1990. As the NLRC found, petitioner admitted that "on August 23, 1990, he (respondent) called up through a third party to inform PLDT that he would go on an extended leave." Such admission was even reiterated in petitioner’s petition for certiorari filed with us. Notably, when respondent returned for work on September 4, 1990, he immediately submitted a letter to petitioner explaining his absence and attaching a medical certificate thereto to attest to the reason of his absence. Thus, the suspension imposed on him was not proper.

As to respondent's second unauthorized absence, while respondent had relayed his inability to report for work on May 29, 1991 to a co-employee, who unfortunately did not also report for work, he was negligent in not verifying whether his notice of absence had reached petitioner, and the duration of his absence. In fact, in petitioner's Inter-Office Memorandum dated June 12, 1991 sent to respondent, the former asked the latter to report for duty on June 13, 1991 as he had been absent since May 29, to which respondent complied. While respondent offered a justifiable reason for his absences from May 29 to June 12, 1990, i.e., his two daughters were sick and confined at a nearby clinic, however, we find that he failed to give petitioner prior notice of his absence, thus, such absence was properly considered as unauthorized.

Thus, respondent’s absence from February 11 to 19, 1991 which was made to prolong payment of his demandable financial obligations in the office, and which absence was found by both the NLRC and the CA to be unjustified, was respondent’s second unauthorized absence. We find that respondent's termination for committing three unauthorized absences within a three-year period had no basis; thus, there was no valid cause for respondent's dismissal.

Even assuming that respondent's absenteeism constitutes willful disobedience, such offense does not warrant respondent's dismissal.20 Not every case of insubordination or willful disobedience by an employee reasonably deserves the penalty of dismissal.21 There must be a reasonable proportionality between the offense and the penalty.22

Petitioner's claim that the alleged previous infractions may be used as supporting justification to a subsequent similar offense, which would merit dismissal, finds no application in this case. Respondent's absence from August 23 to September 3, 1990 was justified and not unauthorized as there was prior notice. His absence from May 29 to June 12, 1991, although found to be unauthorized, was not at all unjustified. Thus, his absence during the period from February 11 to 19, 1991, being the only unauthorized and unjustified absence and his second unauthorized absence, should not merit the penalty of dismissal.

While management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers, pursuant to company rules and regulations, however, such

management prerogatives must be exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws and valid agreements.23 The Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it may terminate an employee for a just cause, such prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. Its implementation should be tempered with compassion and understanding. The employer should bear in mind that, in the execution of said prerogative, what is at stake is not only the employee’s position, but his very livelihood, his very breadbasket. 241avvphi1

Dismissal is the ultimate penalty that can be meted to an employee.25 Even where a worker has committed an infraction, a penalty less punitive may suffice, whatever missteps maybe committed by labor ought not to be visited with a consequence so severe.26 This is not only the law’s concern for the workingman. There is, in addition, his or her family to consider. Unemployment brings untold hardships and sorrows upon those dependent on the wage-earner.27

Petitioner contends that respondent's length of service in the company cannot work in his favor but, if to be considered at all, should even be taken against him relying on the case of Philippine Airlines, Inc. (PAL) v. NLRC.28 PAL has no application in this case as it involves a case of a supervisor occupying a position of responsibility, who used trip passes which were falsified to reflect higher priority and space classification than what she and her husband were entitled to on vacation travel in violation of the company policy which served as PAL's basis for losing its trust and confidence on the employee. We considered the infraction committed, together with her twenty years of employment in the company, as reflecting her regrettable lack of loyalty to the company, which loyalty she should have strengthened instead of betrayed. In contrast, the instant infraction committed by respondent during his eleven-year stay with petitioner did not involve the betrayal of petitioner's trust and confidence. Moreover, there was no basis for respondent's termination, on the ground that he had committed his third unauthorized absence within the three-year period as discussed earlier in the decision.

Considering that respondent was illegally dismissed from service, he is entitled to be reinstated, without loss of seniority rights and the payment of backwages from the time respondent’s compensation was withheld from him until his reinstatement on November 12, 1997. However, since we find that respondent's absence from February 11 to 19, 1992 was unjustified and unauthorized, thus, his suspension for thirty days would be in order. Hence, the amount equivalent to the thirty-day suspension, which respondent should have served for his absence on February 11 to 19, 1992, should be deducted from the backwages to be awarded to him.

WHEREFORE, the Decision dated April 24, 2000 and the Resolution dated May 31, 2000 of the Court of Appeals in CA-G.R. SP No. 50852, are hereby AFFIRMED with MODIFICATION that the amount equivalent to respondent’s thirty-day suspension is deducted from the award of backwages from the time his compensation was withheld up to his reinstatement on November 12, 1997.

SO ORDERED.