G.R. NO.

160339

March 14, 2008

OSCAR P. GARCIA and ALEX V. MORALES, Petitioners, vs. MALAYAN INSURANCE CO., INC. and NATIONAL LABOR RELATIONS * COMMISSION, Respondents. DECISION AUSTRIA-MARTINEZ, J.: This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court of Oscar P. 1 Garcia and Alex V. Morales (petitioners), assailing the March 13, 2003 Decision of the Court of Appeals (CA), which upheld the validity of the termination of their employment; and the October 9, 2003 CA 2 Resolution 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 3 Memorandum 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 4 additional instruction for his preventive suspension for 30 days pending investigation. 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 5 collective bargaining agreement. After the conduct of an informal administrative hearing, 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.
6

The above acts constitute serious misconduct and a violation of the Companys 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 7 effective immediately. 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 Companys 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 8 effective immediately. Petitioners filed before the Labor Arbiter (LA) a Complaint for illegal dismissal, illegal suspension, 9 unfair labor practice, damages and attorneys fees. The LA dismissed their Complaint in a 10 Decision dated November 20, 2000. Petitioners appealed to the National Labor Relations Commission (NLRC), which issued a 11 Resolution dated November 29, 2001, affirming the November 20, 2000 LA Decision. The NLRC 12 also denied petitioners Motion for Reconsideration in a Resolution dated February 28, 2002. Petitioners filed a Petition for Certiorari with the CA, which dismissed it in the March 13, 2003 13 Decision 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 14 the legal issues raised. Resolution of the foregoing issues entails an inquiry into the facts, a re-evaluation of the credibility of the witnesses and a recalibration of the evidence presented. Ordinarily, the Court does not undertake these functions, for it defers to the expertise of the CA, NLRC and LA, and accords great weight to their factual findings, especially when these are unanimous. Thus, only their errors of law are reviewable by the Court in a petition for review on certiorari under Rule 45. However, under extraordinary circumstances, the Court delves into the factual assessment of the forums below when it is shown that (1) the findings are not supported by evidence; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings, the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's reply briefs are not disputed by the respondent; and (10) when the findings of fact 15 are premised on the supposed absence of evidence and contradicted by the evidence on record. 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 16 [petitioner] Garcia. 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. 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 18 union while those being charged are union officers, hence, with moral ascendancy over them." While the CA did not elaborate on its view, it bound itself by the concurrent factual findings of the LA 19 and NLRC for it found them to be supported by evidence. 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 20 office table; and second, De Guzman merely described how these properties were recovered. 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 21 possession. De Guzman's statement detailed the effort to bring said properties back into the 22 premises of private respondent and to make it appear that these were merely misplaced. 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 23 Rubi, dito rin sa Quintin Paredes, Binondo para kunin ang isang bagay sa lalaking may bigote.
17

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. 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 25 guard's logbook and the affidavit of the guard-on-duty, Joey Limbo. Petitioner explains that it took time for him to present these documents, because private respondent had tried to conceal them and 26 was compelled to present the same before the LA only when he (petitioner Garcia) demanded to 27 see them. 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 28 Guzman recovered the stolen properties from the fifth floor of the office building. The affidavit of Joey Limbo merely repeated the logbook entry. 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 30 then that he divulged the details leading to the recovery of said properties. 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 31 copy of the evidence against them or the minutes of the investigation. It is oft repeated that in administrative proceedings, due process is served by the mere fact that 32 each party is afforded an opportunity to air its side, not necessarily through verbal argumentation,
29 24

but also through pleadings in which the parties may explain their side of the controversy. It is of record that petitioners were informed of the charges against them and were given the opportunity to present their defense, not just in the administrative investigation, but also in the proceedings before the LA and NLRC. The requirements of due process were more than adequately satisfied. In fine, the Court sees no compelling reason to disturb the concurrent factual findings of the CA, NLRC and LA that petitioner Garcia was involved in the theft of respondent's properties and in the attempt to cover up said act for the same are supported by substantial evidence. However, the Court finds scant evidence to connect petitioner Morales to the theft or its cover-up and therefore declares that the CA committed a grievous error in upholding his dismissal. WHEREFORE, the petition is PARTLY GRANTED. The assailed March 13, 2003 Decision and October 9, 2003 Resolution of the Court of Appeals are AFFIRMED insofar as they sustained the dismissal of the complaint of petitioner Oscar Garcia; and REVERSED and SET ASIDE insofar as they sustained the dismissal of the complaint of petitioner Alex Morales. The complaint for the illegal dismissal of Alex Morales is GRANTED. His immediate reinstatement with backwages is ordered. No costs. SO ORDERED. G.R. No. 173151 March 28, 2008

33

EDUARDO BUGHAW, JR., Petitioner, vs. TREASURE ISLAND INDUSTRIAL CORPORATION, Respondent. DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, filed by petitioner Eduardo Bughaw, Jr., seeking to reverse and set aside the 1 2 Decision, dated 14 June 2005 and the Resolution, dated 8 May 2006 of the Court of Appeals in CA-G.R. SP No. 85498. The appellate court reversed the Decision dated 28 August 2003 and Resolution dated 27 February 2004 of the National Labor Relations Commission (NLRC) in NLRC Case No. V-000231-02 that found the petitioner to be illegally dismissed from employment by respondent Treasure Island Industrial Corporation. The dispositive portion of the assailed appellate courts Decision thus reads: WHEREFORE, discussion considered, the decision dated August 28, 2003 of the National Labor Relations Commission, Fourth Division, Cebu City, in NLRC Case No. V-000231-02 (RAB VII-061171-01), is hereby VACATED and SET ASIDE en toto. The award of money claims to [herein petitioner] is NULLIFIED and RECALLED. The factual and procedural antecedents of the instant Petition are as follows:
3

Sometime in March 1986, petitioner was employed as production worker by respondent. Respondent was receiving information that many of its employees were using prohibited drugs 4 during working hours and within the company premises. On 5 June 2001, one of its employees, Erlito Loberanes (Loberanes) was caught in flagrante delicto by the police officers while in possession of shabu. Loberanes was arrested and sent to jail. In the course of police investigation, Loberanes admitted the commission of the crime. He implicated petitioner in the crime by claiming that part of the money used for buying the illegal drugs was given 5 by the latter, and the illegal drugs purchased were for their consumption for the rest of the month. In view of Loberaness statement, respondent, on 29 June 2001, served a Memo for Explanation to petitioner requiring him to explain within 120 hours why no disciplinary action should be imposed against him for his alleged involvement in illegal drug activities. Petitioner was further directed to appear at the office of respondents legal counsel on 16 June 2001 at 9:00 oclock in the morning for the hearing on the matter. For the meantime, petitioner was placed under preventive suspension for the period of 30 days effective upon receipt of the Notice. Notwithstanding said Memo, petitioner failed to appear before the respondents legal counsel on the scheduled hearing date and to explain his side on the matter. On 19 July 2001, respondent, through legal counsel, sent a second letter to petitioner directing him to attend another administrative hearing scheduled on 23 July 2001 at 11:00 oclock in the morning at said legal counsels office but petitioner once again failed to show up. Consequently, respondent, in a third letter dated 21 August 2001 addressed to petitioner, terminated the latters employment retroactive to 11 June 2001 for using illegal drugs within company premises during working hours, and for refusal to attend the administrative hearing and submit written explanation on the charges hurled against him. On 20 July 2001, petitioner filed a complaint for illegal dismissal against respondent and its President, Emmanuel Ong, before the Labor Arbiter. Petitioner alleged that he had been working for the respondent for 15 years and he was very conscientious with his job. He was suspended for 30 days on 11 June 2001 based on the unfounded allegation of his co-worker that he used illegal drugs within company premises. When petitioner reported back to work after the expiration of his suspension, he was no longer allowed by respondent to enter the work premises and was told not to report back to work. On 8 January 2002, the Labor Arbiter rendered a Decision in favor of petitioner since the respondent failed to present substantial evidence to establish the charge leveled against the petitioner. Apart from Loberaness statements on petitioners alleged illegal drug use, no other corroborating proof was offered by respondent to justify petitioners dismissal. Further, respondent failed to comply with due process when it immediately suspended petitioner and eventually dismissed him from employment. Petitioners immediate suspension was not justified since no evidence was submitted by the respondent to establish that petitioners continued employment pending investigation poses a serious and imminent threat to respondents life or property or to the life or property of petitioners co-workers. Finally, the Labor Arbiter observed that the notices of hearing sent by respondent to petitioner were not duly received by the latter. The Labor Arbiter was not swayed by respondents explanation that the reason therefor was that petitioner refused to receive said notices. The Labor Arbiter thus ruled:
10 9 8 7 6

WHEREFORE, premises considered, judgment is hereby rendered ordering [herein respondent] to pay [herein petitioner] the following: 1. Separation pay 2. Backwages 3. Unpaid wages Total P 106,590.00 The case against respondent Emmanuel Ong is dismissed for lack of merit.
11

P 74,100.00 P 27,550.00 P 4,940.00

On appeal, the NLRC affirmed the Labor Arbiters Decision in its Decision dated 28 August 2003. The NLRC decreed that respondent failed to accord due process to petitioner when it dismissed him from employment. The use of illegal drugs can be a valid ground for terminating employment only if it is proven true. An accusation of illegal drug use, standing alone, without any proof or evidence 12 presented in support thereof, would just remain an accusation. The Motion for Reconsideration filed by respondent was denied by the NLRC in a 13 Resolution dated 27 February 2004. Resolving respondents Petition for Certiorari, the Court of Appeals reversed the Decisions of the Labor Arbiter and NLRC on the grounds of patent misappreciation of evidence and misapplication of law. The appellate court found that petitioner was afforded the opportunity to explain and defend himself from the accusations against him when respondents gave him notices of hearing, but petitioner repeatedly ignored them, opting instead to file an illegal dismissal case against respondent before the Labor Arbiter. The essence of due process in administrative proceedings is simply an opportunity to explain ones side or to seek reconsideration of the action or ruling complained of. Due process is not violated where one is given the opportunity to be heard but he 14 chooses not to explain his side. Similarly ill-fated was petitioners Motion for Reconsideration which was denied by the Court of 15 Appeals in its Resolution dated 8 May 2006. Hence, this instant Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court filed by petitioner impugning the foregoing Court of Appeals Decision and Resolution, and raising the sole issue of: WHETHER OR NOT PETITIONER WAS ILLEGALLY DISMISSED FROM EMPLOYMENT. Time and again we reiterate the established rule that in the exercise of the Supreme Courts power 17 of review, the Court is not a trier of facts and does not routinely undertake the reexamination of the evidence presented by the contending parties during the trial of the case considering that the findings of facts of labor officials who are deemed to have acquired expertise in matters within their respective jurisdiction are generally accorded not only respect, but even finality, and are binding 18 19 upon this Court, when supported by substantial evidence.
16

The Labor Arbiter and the NLRC both ruled that petitioner was illegally dismissed from employment and ordered the payment of his unpaid wages, backwages, and separation pay, while the Court of Appeals found otherwise. The Labor Arbiter and the NLRC, on one hand, and the Court of Appeals, on the other, arrived at divergent conclusions although they considered the very same evidences submitted by the parties. It is, thus, incumbent upon us to determine whether there is substantial evidence to support the finding of the Labor Arbiter and the NLRC that petitioner was illegally dismissed. Substantial evidence is such amount of relevant evidence which a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might 20 conceivably opine otherwise. Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold, the 21 substantive and the procedural aspects. Not only must the dismissal be for a just or authorized 22 23 cause, the rudimentary requirements of due process - notice and hearing must, likewise, be observed before an employee may be dismissed. Without the concurrence of the two, the 24 termination would, in the eyes of the law, be illegal, for employment is a property right of which 25 one cannot be deprived of without due process. Hence, the two (2) facets of a valid termination of employment are: (a) the legality of the act of dismissal, i.e., the dismissal must be under any of the just causes provided under Article 282 of the Labor Code; and (b) the legality of the manner of dismissal, which means that there must be 26 observance of the requirements of due process, otherwise known as the two-notice rule. Article 282 of the Labor Code enumerates the just causes for terminating the services of an employee: ART. 282. Termination by employer. - An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. The charge of drug abuse inside the companys premises and during working hours against petitioner constitutes serious misconduct, which is one of the just causes for termination. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not merely an error in judgment. The misconduct to be serious within the meaning of the Act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless, in connection with the work of the employee, 27 constitute just cause for his separation. This Court took judicial notice of scientific findings that drug abuse can damage the mental faculties of the user. It is beyond question therefore that any

employee under the influence of drugs cannot possibly continue doing his duties without posing a serious threat to the lives and property of his co-workers and even his employer. Loberaness statements given to police during investigation is evidence which can be considered by the respondent against the petitioner. Petitioner failed to controvert Loberanes claim that he too was using illegal drugs. Records reveal that respondent gave petitioner a first notice dated 11 June 2001, giving him 120 hours within which to explain and defend himself from the charge against him and to attend the administrative hearing scheduled on 16 June 2001. There is no dispute that petitioner received said notice as evidenced by his signature appearing on the lower left portion of a 28 copy thereof together with the date and time of his receipt. He also admitted receipt of the first 29 notice in his Memorandum before this Court. Despite his receipt of the notice, however, petitioner did not submit any written explanation on the charge against him, even after the lapse of the 120day period given him. Neither did petitioner appear in the scheduled administrative hearing to personally present his side. Thus, the respondent cannot be faulted for considering only the evidence at hand, which was Loberanes statement, and conclude therefrom that there was just cause for petitioners termination. We thus quote with approval the disquisition of the Court of Appeals: The [NLRC] did not find substantial evidence in order to establish the charge leveled against [herein petitioner] claiming that the statement of Loberanes is legally infirm as it was an admission made under custodial investigation; and there has been no corroborating evidence. In administrative proceedings, technical rules of procedure and evidence are not strictly applied and administrative due process cannot be fully equated with due process in its strict judicial sense. Xxx It is sufficient that [herein petitioner] was implicated in the use of illegal drugs and, more importantly, there is no counter-statement from [herein petitioner] despite opportunities granted to him submit to an 30 investigation. It was by petitioners own omission and inaction that he was not able to present evidence to refute the charge against him. Now we proceed to judge whether the manner of petitioners dismissal was legal; stated otherwise, whether petitioner was accorded procedural due process. In Pastor Austria v. National Labor Relations Commission, of the two-notice rule in dismissing an employee:
31

the Court underscored the significance

The first notice, which may be considered as the proper charge, serves to apprise the employee of the particular acts or omissions for which his dismissal is sought. The second notice on the other hand seeks to inform the employee of the employers decision to dismiss him. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge and ample opportunity to be heard and defend himself with the assistance of a representative if he so desires. This is in consonance with the express provision of the law on the protection to labor and the broader dictates of procedural due process. Noncompliance therewith is fatal because these requirements are conditions sine qua non before dismissal may be validly effected. (Emphases supplied.) While there is no dispute that respondent fully complied with the first-notice requirement apprising petitioner of the cause of his impending termination and giving him the opportunity to explain his side, we find that it failed to satisfy the need for a second notice informing petitioner that he was being dismissed from employment.

We cannot give credence to respondents allegation that the petitioner refused to receive the third letter dated 21 August 2001 which served as the notice of termination. There is nothing on record that would indicate that respondent even attempted to serve or tender the notice of termination to petitioner.1avvphi1 No affidavit of service was appended to the said notice attesting to the reason for failure of service upon its intended recipient. Neither was there any note to that effect by the server written on the notice itself. The law mandates that it is incumbent upon the employer to prove the validity of the termination of 32 employment. Failure to discharge this evidentiary burden would necessarily mean that the 33 dismissal was not justified and, therefore, illegal. Unsubstantiated claims as to alleged compliance with the mandatory provisions of law cannot be favored by this Court. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of our labor laws and 34 Constitution. The burden therefore is on respondent to present clear and unmistakable proof that petitioner was duly served a copy of the notice of termination but he refused receipt. Bare and vague allegations as to the manner of service and the circumstances surrounding the same would not suffice. A mere copy of the notice of termination allegedly sent by respondent to petitioner, without proof of receipt, or in the very least, actual service thereof upon petitioner, does not constitute substantial evidence. It was unilaterally prepared by the petitioner and, thus, evidently self-serving and insufficient to convince even an unreasonable mind. We cannot overemphasize the importance of the requirement on the notice of termination, for we 35 have ruled in a number of cases that non-compliance therewith is tantamount to deprivation of the employees right to due process. This is not the first time that the Court affirmed that there was just cause for dismissal, but held the employer liable for non-compliance with the procedural due process. In Agabon v. National Labor 36 Relations Commission, we found that the dismissal of the employees therein was for valid and just cause because their abandonment of their work was firmly established. Nonetheless, the employer therein was held liable because it was proven that it did not comply with the twin procedural requirements of notice and hearing for a legal dismissal. However, in lieu of payment of backwages, we ordered the employer to pay indemnity to the dismissed employees in the form of nominal damages, thus: The violation of the petitioners right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this 37 fundamental right granted to the latter under the Labor Code and its Implementing Rules. The above ruling was further clarified in Jaka Food Processing Corporation v. Pacot.
38

The difference between Agabon and the instant case is that in the former, the dismissal was based on a just cause under Article 282 of the Labor Code while in the present case, respondents were dismissed due to retrenchment, which is one of the authorized causes under Article 283 of the same Code. xxxx A dismissal for just cause under Article 282 implies that the employee concerned has committed, or is guilty of, some violation against the employer, i.e., the employee has committed some serious misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected his duties. Thus, it can be said that the employee himself initiated the dismissal process. On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by the employers 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 39 undertakes to implement a retrenchment program. Then we elucidated on our ruling in Agabon in this wise: Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the 40 dismissal process was initiated by the employers exercise of his management prerogati ve. The Agabon doctrine enunciates the rule that if the dismissal was for just cause but procedural due process was not observed, the dismissal should be upheld. Where the dismissal is for just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal or render it illegal or ineffectual. However, the employer should indemnify the employee for the violation of his right to procedural due process. The indemnity to be imposed should be stiffer to discourage the 41 abhorrent practice of "dismiss now, pay later," which we sought to deter in the Serrano ruling. In 42 Agabon the nominal damages awarded was P30,000.00. Conformably, the award of backwages by the Labor Arbiter and the NLRC should be deleted and, instead, private respondent should be indemnified in the amount of P30,000.00 as nominal 43 damages. WHEREFORE, premises considered, the instant Petition is DENIED. The Court of Appeals Decision dated 14 June 2005 is hereby AFFIRMED WITH MODIFICATION in the sense that while there was a valid ground for dismissal, the procedural requirements for termination as mandated by law and jurisprudence were not observed. Respondent Treasure Island Corporation is ORDERED to pay the amount of P30,000.00 as nominal damages. No costs. SO ORDERED. G.R. No. 159302 February 6, 2008

In Jaka, the employees were terminated because the corporation was financially distressed. However, the employer failed to comply with Article 283 of the Labor Code which requires the employer to serve a written notice upon the employees and the Department of Labor and Employment (DOLE) at least one month before the intended date of termination. We first distinguished the case from Agabon, to wit:

CITIBANK, N.A., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ROSITA TAN PARAGAS, respondents. DECISION CARPIO MORALES, J.: Subject of this petition for review is the National Labor Relations Commission (NLRC) Resolution dated October 24, 2001 granting the MOTION FOR PARTIAL RECONSIDERATION of respondent Rosita Tan Paragas (Rosita) relative to her appeal in an illegal dismissal case, which the Court of 1 Appeals affirmed in toto by Decision of January 24, 2003 and Resolution of July 29, 2003. Rosita was found by Labor Arbiter Geobel Bartolabac to be an employee of petitioner Citibank, N.A. for around eighteen (18) years from August 8, 1979 to September 4, 1997. At the time her employment was terminated by petitioner for serious misconduct, willful disobedience, gross and habitual neglect of duties and gross inefficiency, she was occupying the position of filing clerk. The relevant facts pertaining to respondents employment history may be gleaned from the following salient portions of the labor arbiters Decision of June 29, 1998: On 8 August 1979, complainant Paragas joined respondent Citibank as Secretary to the Premises Administration (up to 1981): Corporate Teller (1981-1982): Secretary to Assistant Vice Presidents Ed Katigbak and Z.P. Molina (up to 1987); Secretary to Vice-PresidentLegal Counsel, Atty. Renato J. Fernandez (up [to] 1988); Secretary to the Employer/Employee Relations Officer, Atty. Beatriz Alo and later to the Public Affairs Director Vice President, Maximo J. Edralin, Jr. When the latter retired in 1992, complainant was assigned to Cash Management Services as Remittance Processor. Sometime in the early part of 1993, as a result of the reorganization, respondent bank declared certain officers and employees, or their positions/functions, redundant. Among these affected was complainant Paragas. However, to accommodate the union officers request, complainants employment was not terminated but was assigned to Records Management Unit of the Quality Assurance Division as bank statement retriever, a filing clerk job described by complainant as "non-brainer job." In the latter part of July 1994, complainant was assigned to file Universal Account Opening Forms (UAOF) in file boxes and retrieving such UAOFs from the file boxes upon internal customers request from time to time. In the same month, she was also assigned to process or develop microfilms. However, on 20 February 1995, she complained that the processing of microfilms was proving to be harmful to her health. Thus, the job was reassigned to another clerk. Accordingly, beginning 21 February 1995, complainants job in the bank was to file and retrieve UAOFs. x x x xxxx On 11 December 1996, complainant was assigned to undertake the special project of reorganizing the UAOFs from 13 December 1996 to 15 May 1997. The work to be done are as follows:

a. Review of existing files in order to verify misfiles b. Pull-out of misfiles and file them in their proper places c. Interfile new/incoming UAOFs received for the day d. Add new file boxes and make an allowance of at least inch for each file box for incoming UAOFs and for future explasion [sic] e. Labelling of all file boxes and Corporate UAOFs and their actual contents f. Transfer of the UAOFs from the Citicenter basement to the new compactors at the third floor g. Submit a status report (accomplishment for the week) every Monday On 10 January 1997, AVP Narciso Ferrera issued a Memo to complainant calling her attention on the following, to wit: 10 January 1997 TO Rosita T. Paragas CC: Randy J. Uson SUBJECT: REORGANIZATION OF THE UNIVERSAL ACCOUNT OPENING FORMS (UAOFs) In connection with the Reorganization of the Universal Account Opening Forms (UAOFs), I would like to call your attention on the following, viz: a. Various misfiling on the reorganized UAOF file I had the reorganized file counter-checked by your co-employees and they came out with the following misfiling, e.g. 1. Belo, Jose; Belo, Matilde, Belo William interfiled with BELLO 2. BARRAGER, RAYMOND misfiled with BARANGAN and BARANUELO Box (BARBARO) 3. EUGENIO BARAOIDANs interfiled with BARNUEVO AND BARRAMEDA 4. VICTOR AGIUS filed with the AGUIRREs 5. Several AGUILAs interfiled with File box ALF-ALI

6. LETICIA AMANSEC filed with AMAR and AMARGO 7. Several BARON interfiled between BARROGA AND BARRON 8. AMANDA CAMELLO interfiled between CAMERO and CAMERON 9. PETER CARSON interfiled between CARR and CARRAD They went thru 9 files boxes only and found 9 misfiles. This level of errors is not acceptable. Remember a misfiled document is considered LOST and you will have to go through the file one by one to be able to retrieve it. b. Submission of a weekly status report every Monday. As per our agreement, report every Monday effective January 6, 1997. As of February 10, 1997; I have not received a single report from you. c. Trimming/cutting of edges of attached documents like xerox copies of Ids, Passports, Drivers license, etc. I would like to reiterate my previous instructions to do away with the trimming and cutting of attached documents as it only consumes valuable time and will prolong the reorganization process. We started the reorganization last December 13, 1996 and as today 10 February 1997, you are still in letter C for a total of 163 file boxes. There are still 348 file boxes to reorganize d. Accumulation of incoming newly received UAOFs. I have noticed that you have accumulated two (2) boxes full of personal UAOFs at the basement and at the third floor. Arce and Sammy are complaining on the retrieval of these files. It is taking them more time and efforts. In the monthly meeting we had last December, 1996, interfiling incoming UAOFs is your responsibility. In view of the above, please concentrate on the filing process and stop trimming the attachments. Our goal in the reorganization of the UAOFs is ACCURATE FILING so that these documents could be located when requested. I hope you exhaust all means and efforts to finish the project within the given time frame. Please be guided accordingly. (Sgd.) Narciso M. Ferrera Assistant Vice President Again, on 2 April 1997, complainant received another memo from AVP Ferrera called her attention (a) to the same nine (9) cases misfiled UAOFs in Annex 16, (b) to three (3) other cases of misfiled UAOFs (c) her persistent failure to submit weekly report on the progress of her work under the Special Project, and (d) that despite the lapse of three (3) months, she was still in letter D (or UAOFs covering clients whose surnames begin with letter D).

As she failed to complete the project on 30 May 1997, complainant was given another 30 days to complete it. However, by the end of June 1997, her accomplishment was only 30% of the total work to be done. On 25 July 1997, AVP Ferrera directed complainant to explain in writing why her employment should not be terminated on the ground of serious misconduct, willful disobedience, gross and habitual neglect of her duties and gross inefficiency. Correspondingly, complainant was placed under Preventive suspension. Complainant submitted her written explanation on 31 July 1997. On 29 August 1997, an administrative conference took place with the complainant, her counsel and the Union President in attendance. Finally, on 4 September 1997, the respondent bank thru AVP Ferrera notified complainant that her written explanation and those which she ventilated during the administrative conference held on 29 August 1997 were found self-serving, and consequently, terminating her employment on the ground of serious misconduct, willful disobedience, 2 gross and habitual neglect of duties and gross inefficiency. Following the termination of her services, respondent filed a complaint for illegal dismissal, praying 3 forreinstatement, backwages, damages and attorneys fees. By the aforementioned Decision of June 29, 1998, the labor arbiter dismissed the complaint for lack of merit, finding that her dismissal on the ground of work inefficiency was valid. On appeal, the NLRC, by Resolution of October 24, 2000, affirmed the decision of the labor arbiter with the modification that respondent should be paid separation pay "as a form of equitable relief" in view of her length of service with petitioner. Respondent filed a MOTION FOR PARTIAL RECONSIDERATION of the NLRC Resolution. She no longer challenged her dismissal on the ground of work inefficiency, but prayed that petitioner be ordered to pay her the "Provident Fund" benefits under its retirement plan for which she claimed to be qualified pursuant to petitioners "Working Together" Manual, specifically the provision on page 12.5 thereof which states: Should you (employee) resign or be discharged for reasons other than misconduct prior to your earliest retirement date, you will be paid a percentage of your share in the Fund according to the following schedule: Completed Years of Continuous Vesting Service 20 or more years 19 years 18 years xxxx (Emphasis and underscoring supplied) 100% 95% 90% xxxx
4

Respondent, claiming that the labor arbiter upheld her dismissal on the ground of merely "work inefficiency" and not for any misconduct on her part, asserted that she is entitled to 90% of the retirement benefits. Petitioner did not move to reconsider the NLRC October 24, 2000 Resolution. Finding that respondents dismissal was "for causes other than misconduct," the NLRC, by the above-mentioned October 24, 2001 Resolution granted respondents motion for partial 5 reconsideration. Petitioner moved to reconsider this Resolution, but the same was denied by the NLRC. Petitioner thereupon filed a petition for certiorari with the Court of Appeals to set aside and nullify the October 24, 2001 NLRC Resolution. The appellate court, by Decision dated January 24, 2003, dismissed petitioners petition for lack of merit and affirmed in toto the challenged NLRC Resolution. Its motion for reconsideration having been denied by the appellate court by Resolution of July 29, 6 2003, the present petition was filed, petitioner asserting as follows: 1. The NLRC has no authority to pass upon and resolve issues and grant claims not pleaded and proved before the Labor Arbiter. 2. The NLRC acted without authority or without or in excess of jurisdiction when it granted the entirely new/subsequent claim (for payment of retirement benefits) of Paragas. 3. In any case, (a) the actuations of Paragas narrated in petitioners motion for reconsideration [of the NLRC Resolution dated October 24, 2001] for which petitioner had dismissed her on the ground of Serious Misconduct, among other grounds and (b) the decision of the Labor Arbiter dismissing Paragas complaint for illegal dismissal f or lack of merit, which the NLRC affirmed, show that Paragas is not entitled to her new claim for retirement benefits; for as Paragas herself has shown in her motion for partial reconsideration, under the Retirement Plan of the bank a bank employee who has been dismissed for misconduct is not entitled to retirement benefit. 4. In any event, even assuming that Paragas was entitled to retirement benefit, her claim therefor is already time-barred. 5. Thus, the Court of Appeals erred when it dismissed petitione rs petition in CA-G.R. No. 7 SP 69642. The petition is impressed with merit. That respondent did not expressly claim retirement benefits in the proceedings before the labor arbiter is not disputed. Indeed, she admits that the first time she explicitly prayed for such benefits was in her Motion for Partial Reconsideration filed with the NLRC. She argues, nonetheless, that the grant thereof by the NLRC was warranted based on the principle that rules of procedure and evidence should not be applied rigidly and technically in labor cases. Moreover, she alleges that her claim for retirement benefits was implicit in her general prayer in her position paper for "such other reliefs as may be just and equitable." While it is established that technical rules of procedure may be relaxed in labor cases, Maebo v. 8 NLRC instructs

We wish, however, to stress some points. Firstly, while it is true that the Rules of the NLRC must be liberally construed and that the NLRC is not bound by the technicalities of law and procedure, the Labor Arbiters and the NLRC itself must not be the first to arbitrarily disregard specific provisions of the Rules which are precisely intended to assist the parties in obtaining just, expeditious, and inexpensive settlement of labor disputes. One such provision is Section 3, Rule V of the New Rules of Procedure of the NLRC which requires the submission of verified position papers within fifteen days from the date of the last conference, with proof of service thereof on the other parties. The position papers "shall cover only those claims and causes of action raised in the complaint excluding those that may have been amicably settled, and shall be accompanied by all supporting documents including the affidavits of their respective witnesses which shall take the place of the latters testimony." After the submission thereof, the parties "shallnot be allowed to allege facts, or present evidence to prove facts, not referred to and any cause or causes of action not included in the complaint or position papers, affidavits and other documents."(Emphasis and underscoring supplied) Respondent indeed prayed for "other just and equitable relief," but the same may not be interpreted so broadly as to include even those which are not warranted by the factual premises alleged by a party. Thus the January 24, 2003 Decision of the Court of Appeals correctly stated: "It has been ruled in this jurisdiction that the general prayer for other reliefs is applicable to such other reliefs which are warranted by the law and facts alleged by the respondent in her basic pleadings and not 9 10 on a newly created issue." (Underscoring supplied) Particularly in People v. Lacson, this Court held: x x x Case law has it that a prayer for equitable relief is of no avail, unless the petition states facts which will authorize the court to grant such relief. A court cannot set itself in motion, nor has it power to decide questions except as presented by the parties in their pleadings. Anything that is resolved or decided beyond them is coram non judice and void. (Emphasis supplied) Respondents assertion that she mentioned the matter regarding the Provident Fund even prior to her Motion for Partial Reconsideration on page 14 of her position paper and again on pages 2 and 7 of her "Notice of Appeal and Appeal Memorandum" is unavailing. Her "Notice of Appeal and Appeal Memorandum" was filed after she had already submitted her position paper. Thus, any mention of the Provident Fund therein would fail to adhere to the aboveruling in Maebo, the thrust of which was precisely that all facts, evidence, and causes of action should already be proffered in the position papers and the supporting documents thereto, not in any later pleading. As to respondents position paper, there was only the mere mention of "Provident A & C," with the corresponding amount of P1,086,335.43, among the actual damages that she was allegedly 11 suffering from her continued severance from employment. Respondent made no attempt to define what this "Provident A & C" was, nor offer any substantiation for including it to be among her actual damages. She did not even hint how "Provident A & C" had a bearing on retirement benefits. Thus, while respondent did refer to the Provident Fund in her position paper, such reference was too vague to be a basis for any court or administrative body to grant her retirement benefits. Respondent justifies her failure to claim for retirement benefits before the labor arbiter by alleging that it would be inconsistent with her prayer for reinstatement. Respondent, however, could have easily claimed such benefits as an alternative relief.

In any event, respondent is not entitled to retirement benefits as this Court finds that she was validly dismissed for serious misconduct and not merely for work inefficiency. While findings of fact in administrative decisions such as those rendered by the NLRC are to be accorded not only great weight and respect, but even finality, the rule only applies for as long as 12 these findings are supported by substantial evidence. In the present case, the NLRC was absolutely silent on why it did not give credence to petitioners evidence on respondents misconduct. It was content merely to state that "the separation is not for reasons of misconduct but 13 for other grounds" without any substantiation and in total disregard of the evidence proffered by 14 petitioner. Colegio de San Juan de Letran-Calamba v. Villas instructs: Likewise, findings of fact of administrative agencies and quasi-judicial bodies which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality. They are binding upon this Court unless there is a showing of grave abuse of discretion or where it is clearly shown that they were arrived at arbitrarily or in utter disregard of the evidence on record. (Emphasis and underscoring supplied) True, the NLRC adopted the findings of the labor arbiter, but the labor arbiter did not expressly rule on the issue of respondents alleged misconduct which is not surprising, for a ruling thereon was not then strictly necessary. At that stage, the main issue which had to be resolved was only whether respondents dismissal was valid, and not whether she was qualified for retirement benefits. Only when respondent raised the claim of retirement benefits did it become crucial to determine whether she was validly dismissed on the specific ground of serious misconduct, not only on the ground of poor work performance. As reflected above, this Court, after a review of the NLRC finding that respondent did not commit serious misconduct, finds otherwise. While the labor arbiter did not explicitly rule that respondent committed serious misconduct, his decision leads to that conclusion, for the documentary evidence which it cites as basis to prove her work inefficiency shows, upon close examination, also her commission of serious misconduct. In support of its ruling that respondents dismissal was valid, the labor arbiter relied on the performance appraisals of respondent from July to December 1994, from January to June 1995, and from July to December 1996, all of which were submitted by petitioners Assistant Vice President, Narciso M. Ferrera. The labor arbiter noted that Ferreras evaluation of respondent was not lacking in objectivity. These performance appraisals, however, did not merely show that respondent was not able to meet performance targets. More relevantly, they also consistently noted significant behavioral and attitudinal problems in respondent. In particular, respondent was found to be very 15 16 17 argumentative; she had difficulty working with others; she was hard to deal with; and she never 18 ceased being the subject of complaints from co-workers. Moreover, beyond the documents referred to in the labor arbiters decision, there are other pieces of evidence on record which further establish that respondent was validly dismissed not only for work inefficiency but for serious misconduct. The Court sees no reason why these should not be accorded credibility along with those cited by the labor arbiter.

The assessment of respondents performance by Randy Uson, another superior of respondent, was given weight by the labor arbiter who noted that Uson was "described as [a] very professional and 19 fair person by complainant [herein-respondent] herself." Significantly, Uson later commented on respondents behavior as follows: "Less tangible but none the less real, are the common concerns raised by her peers and supervisor, on the stress and tension created when Rose is around. The conscious effort to get out of her way and avoid conflict, hinders productivity and 20 efficiency and has adversely affected the morale of the entire unit . x x x" (Emphasis and underscoring supplied) More. For the appraisal period from June to December 1995, respondents performance appraisal 21 report stated that her attitude towards her work, the bank, and superiors needed reformation. The 22 report for January to June 1996 made the same observation, indicating that there was no improvement on her part. The performance appraisal report of respondent for the period of January to June 1997, besides stating that she was still "hard to deal with," described her as "belligerent," one who had "a negative presence which affects the morale of the entire unit," and who "pick[ed] fights with peers and other 23 employees even without provocation." The evaluation of respondent cited above finds corroboration in her admission that "she may have been tactless and insolent in dealing with her superior but it does not allegedly warrant the supreme 24 penalty of dismissal." Finally, even the NLRC, its later ruling that respondent was not guilty of misconduct notwithstanding, was aware that the problem with respondent was not merely her poor work output, but her unreasonable behavior and unpleasant deportment. Thus, as its Resolution of October 24, 2000 drew to a close, it stated that petitioner was "correct" in invoking Cathedral School of 25 Technology v. NLRC, specifically the following portion of this Courts decision therein: An evaluative review of the records of this case nonetheless supports a finding of a just cause for termination. The reason for which private respondents services were terminated, namely, herunreasonable behavior and unpleasant deportment in dealing with the people she closely works with in the course of her employment, is analogous to the other "just causes" enumerated under the Labor Code. (Emphasis supplied) It bears noting that petitioner cited Cathedral School of Technology in its Comment/Reply to Complainant-Appellants Appeal Memorandum precisely to show that its dismissal of complainant on the ground of "gross inefficiency and unreasonable behavior" (emphasis supplied) was 26 correctly upheld by the labor arbiter. When an employee, despite repeated warnings from the employer, obstinately refuses to curtail a bellicose inclination such that it erodes the morale of co-employees, the same may be a ground for dismissal for serious misconduct. As this Court held in National Service Corp. v. Leogardo, Jr., "[a] series of irregularities when put together may constitute serious misconduct, which under Article 283 of the Labor Code, is a just cause for termination." And as it held in Asian Design and Manufacturing Corporation v. Deputy
27

Minister of Labor, acts destructive of the morale of ones co-employees may be considered serious 28 misconduct. It is respondents obstinate refusal to reform herself which ultimately persuades this Court to find that her dismissal on the ground of serious misconduct was valid. Clearly, the following statement of Jaime R. Paraiso, head of petitioners Records Management Unit, quoted with approval both by the labor arbiter and the NLRC, relates not only to respondents inefficiency but also to her admittedly tactless and insolent dealings with her superior. While we all have strengths and good points we also have weaknesses and shortcomings. However, the first step towards self-improvement is acknowledging and accepting ones weaknesses and shortcomings. This is followed by a resolve to change for the better, in turn followed by appropriate action. These elements are not evident in the responses given [by respondent to the performance appraisal report] and there is no clear indication of a desire for self-improvement or any plans in that 29 direction. There continues to be a need to address this situation. (Emphasis supplied) Having been validly dismissed on the ground of serious misconduct, respondent is thus disqualified from receiving her retirement benefits pursuant to the provision of petitioners "Working Together" Manual quoted earlier. WHEREFORE, the petition is GRANTED. The Court of Appeals Decision of January 24, 2003 and Resolution of July 29, 2003 are SET ASIDE. The NLRC Resolution dated October 24, 2001 granting private respondents MOTION FOR PARTIAL RECONSIDERATION is thus VACATED. SO ORDERED. G.R. No. 163270 September 11, 2009

The appellate court narrated the facts as follows: On February 24, 1998, [Tomada] filed a complaint for illegal dismissal against RFM Corporation Bakery Flour Division and Jose Ma. Concepcion, Jr. The case was subsequently assigned to Labor Arbiter Daniel C. Cueto who required both parties to submit their respective position papers. In his position paper, [Tomada] alleged: "x x x xxx xxx

2. That I have worked with the said company since March 9, 1979 and my latest salary therein is P491.00 per day; 3. That the company dismissed me from work because I was allegedly sleeping on my job during my working time and in the process, I failed to detect the fire which was taking place inside my work area; 4. That I was not sleeping however and was never negligent in my job; 5. That on November 22, 1997, there was no certified operator manning the third floor of the flour mill. What was present there was only a trainee; 6. Since there was no certified operator in the third floor, I was forced to go up to the said area whenever there was trouble even if my assigned area was only at the second floor where I was head spoutman; 7. At about 9:00 in the evening of November 22, 1997, the B3A Plan Sifter at the 3rd Floor choked up. I was therefore forced to go up to the said area to assist the trainee (Fernando Filarea) to attend to the said trouble; 8. After attending to the choke-up, I went up to the Fourth Floor to inspect the cyclone if it had trouble also; 9. After seeing that the cyclone was in good condition, I went down to the second floor but felt the call of nature so I entered the screen room from where I could proceed to the comfort room; 10. That at the screen room, I tried to fight the urge to relieve myself and it was at this point in time when Ver Ignacio, the duty shift miller arrived and told me that there was a fire at the bran grinder; 11. That I assisted in putting out said fire but Ver Ignacio eventually charged me with sleeping on my job which resulted to my dismissal on January 26, 1998; 12. That as I have explained earlier, I was not sleeping on my job. I was not also negligent. If ever I was not at the vicinity of the bran grinder at the time of the fire, it was because I attended to a trouble at the 3rd floor and inspected the 4th floor due to the lack of available personnel therein;

EDUARDO M. TOMADA, SR., Petitioner, vs. RFM CORPORATION-BAKERY FLOUR DIVISION and JOSE MARIA CONCEPCION III, Respondents. DECISION CARPIO, J.: The Case This is a petition for review assailing the Decision promulgated on 23 December 2003 as well as 3 the Resolution promulgated on 19 April 2004 of the Court of Appeals (appellate court) in CA-G.R. SP Nos. 69901 and 70069. The appellate court dismissed the petition filed by Eduardo M. Tomada, Sr. (Tomada) and partially granted the petition filed by RFM Corporation-Bakery Flour Division and Jose Maria Concepcion III (respondents). The appellate court affirmed the decision of the National Labor Relations Commission (NLRC) with the modification that RFM Corporation should pay Tomada P127,660 as separation pay. The Facts
1 2

13. That under the circumstances, it is clear that my dismissal was illegal." For their part, RFM and Jose Ma. Concepcion made the following allegations in their position paper: 1. The complainant was a former employee of the respondent, assigned to the position headspoutman of the Flour Milling Department at the time of his termination; 2. As headspoutman of the Flour Milling Department, the complainant was assigned at the second floor and is in-charge of the bran grinding machine on the same floor; 3. Sometime on November 22, 1997, at about 9:00 in the evening, Aries Lazaro, a contractual employee assigned at the Semolina Tipping, noticed the thick smoke coming from the bran; 4. That when he made an investigation, the said employee noticed that smoke was coming from the bran grinding machine and the bran being grounded inside the machine was already smoldering; 5. That immediately, Aries Lazaro went down to the ground floor to seek assistance and found Heronico Mancilla; 6. Together, they went back upstairs to the second floor to try to contain the fire; 7. It was then that Heronico Mancilla instructed Aries Lazaro to go down and call Virgilio F. Ignacio, the Shift Miller on duty; 8. That Virgilio F. Ignacio hurriedly ran upstairs and found that the fire was already growing rapidly; 9. That immediately, Virgilio F. Ignacio went down to the ground floor panel board to shut down mills II and IA; 10. That when Virgilio F. Ignacio returned to the bran grinding machine at the second floor, he found Heronico Mancilla, Fernando Felarca and a number of flour packers were already trying to stop the fire with the use of fire extinguishers; 11. Realizing that the packing area and the screen room were still operating, Virgilio F. Ignacio ran to the panel board of the packing area to shut down the machine and then to the screen room, likewise with the intention of shutting off the screen room machine; 12. That it was in the screen room, an air-conditioned room, where Virgilio F. Ignacio found the complainant [Tomada] who was supposed to be at the second floor watching and monitoring the machine thereat, soundly asleep on top of two (2) units of automatic voltage regulators (AVR); 13. That it was only after Virgilio F. Ignacio woke the complainant up did the latter proceed to the bran grinding machine room on the second floor;

14. The following day, November 23, 1997, Virgilio F. Ignacio submitted a memorandum report of the incident, a copy of which is hereto attached as Annex 1; 15. That same day, a memorandum was likewise issued to the complainant, requiring him to explain within 48 hours why no disciplinary action should be taken against him for violating company rules and regulations, a copy of the memorandum is hereto attached as Annex 2; 16. In compliance [with] the aforesaid memorandum, the complainant submitted his written explanation dated November 27, 1997, a copy of which is hereto attached as Annex 3; 17. In a memorandum dated December 4, 1997, the complainant was served notice that his case was set for administrative investigation on December 6, 1997 and that he was directed to attend the said investigation, a copy of the memorandum is hereto attached as Annex 4; 18. The investigation and hearings were set three (3) times where the complainant was apprised of the nature and the cause of the charges against him; afforded the opportunity of confronting the witness against him; and full opportunity to present his side duly assisted by a representative of his own choice; 19. After hearing, investigation and evaluation of complainants case, management found him guilty of violating company rules and regulations #32, that of sleeping on company time outside of work area with adverse effect or damage, and his services were terminated. A copy of the Memorandum dated February 21, 1998 is hereto attached as Annex 5. Both parties filed their respective Reply to the Position Papers and Rejoinder to Reply. Thereafter, 4 the case was submitted for decision. The Labor Arbiters Ruling In his Decision dated 4 May 2000, the Labor Arbiter dismissed Tomadas case for lack of merit. The Labor Arbiter found that Tomada was grossly remiss in performing his assigned duties and his separation from work was justified. The Labor Arbiter further stated that: Precisely, personnel rules and regulations are promulgated as a vital component in sound personnel administration and for as long as the rules and regulations are reasonable in character and in application, this Office should not interfere in the matter of its exercise. Such is part and parcel of the duly recognized prerogatives of management in instilling discipline to its employees that should not be interferred [sic] into by this Tribunal. In the case at bar, since the rules and regulations upon wh ich [Tomadas] dismissal was based are reasonable in application and it appearing that [Tomada] by his conduct shown violated the rules against sleeping on company time that caused damage and/or adverse effect to the respondents operation his conduct is considered serious and thus cannot be taken lightly by this Office considering the unfavorable and serious impact on respondents business which also deserves legal protection against erring personnel like in the case of [Tomada].

[Tomadas] act amounted to dereliction of duty and gross negligence which is a legal ground to dismiss him for cause. [Tomada], it appears, was given the opportunity to explain his side but sadly, it was not convincing to us based on the factual milieu of the case. WHEREFORE, instant case is dismissed for lack of merit. SO ORDERED.
5

SO ORDERED.

The appellate court denied both parties respective motions for reconsideration in a Resolution 8 promulgated on 19 April 2004. All parties filed their respective petitions for review before this Court. On 13 March 2006, we issued a Resolution denying respondents petition, docketed as G.R. Nos. 163263-64, for failure to file the required reply. Respondents, however, filed the requisite comment to the present petition. On 23 June 2008, this Court resolved to deconsolidate the present petition from G.R. Nos. 163263-64 in view of our 13 March 2006 Resolution. The Issues Tomada raises the following grounds for allowance of his petition: 1. The appellate court committed a serious error of law in imposing the penalty of dismissal upon Tomada despite the fact that respondents did not sustain any damage on account of Tomadas supposed negligence. 2. The appellate courts ruling that Tomada was negligent in his job is a patent nullity and 9 should be reversed. The Ruling of the Court

The Ruling of the NLRC Tomada filed an appeal before the NLRC. In its Decision promulgated on 22 October 2001, the NLRC also dismissed Tomadas appeal for lack of merit. The NLRC reiterated the Labor Arbiters findings that Tomada was not only absent from his area of responsibility at the time the fire started in the second floor, but Tomada was also sleeping in the screen room. The NLRC, however, modified the Labor Arbiters decision when it decreed that Tomada should receive separation pay, equivalent to one-half months pay for every year of service with a fraction of six months considered as one whole year, since the cause of Tomadas dismissal was not reflective of his moral character. On 12 December 2001, the NLRC resolved to deny Tomadas Motion for Reconsideration for lack of 6 merit. The Decision of the Appellate Court Tomada, as well as respondents, assailed the NLRCs decision and resolution before the appellate court. Tomada imputed grave abuse of discretion upon the NLRC in sustaining the validity of his dismissal from employment. On the other hand, respondents questioned the NLRCs grant of separation pay to Tomada, as well as Jose Maria Concepcion IIIs joint liability wit h RFM Corporation. The appellate court ruled that Tomadas dismissal from employment was valid. RFM Corporation entrusted Tomada with the responsibility involving a delicate matter, that of the care, custody and operation of the bran grinding machine for the duration of his duty. The nature of Tomadas infraction, leaving his post and sleeping while on duty, rendered Tomada unworthy of the trust and confidence demanded by his position. The appellate court agreed with the NLRCs award of separation pay to Tomada. The appellate court considered Tomadas service to RFM Corporation for 20 years, as well as his commission of only one, yet very serious, violation of company rules. However, the appellate court modified the NLRCs ruling regarding Jose Maria Concepcion IIIs liability. The award of separation pay may only be enforced against RFM Corporation because of the corporations separate juridical personality. A stockholder or an officer of a corporation cannot be made personally liable for corporate liabilities in the absence of malice or bad faith. The dispositive portion of the appellate courts decision reads as follows: WHEREFORE, the petition filed by Eduardo Tomada, Sr. is hereby DISMISSED and the petition filed by petitioners RFM and Jose Ma. Concepcion is PARTIALLY GRANTED. Accordingly, the assailed decision of public respondent dated October 22, 2001 is hereby AFFIRMED with modification that petitioner RFM Corporation Bakery, Flour Division is hereby ordered to pay Eduardo M. Tomada, Sr. his separation pay in the amount of P127,660.00

The petition has no merit. We see no reason to overturn the factual findings of the Labor Arbiter, which were subsequently approved by the NLRC and the appellate court. The present case adheres to the rule that factual findings of quasi-judicial and administrative bodies are accorded great respect and even finality by the courts. Tomada failed to show that the factual findings were arbitrarily made and disregarded evidence on record. Serious Misconduct as a Just Cause for Dismissal Tomadas acts constitute serious misconduct, one of the five enumerated causes for termination by employer in Article 282 of the Labor Code. Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; xxxx By sleeping on the job and leaving his work area without prior authorization, Tomada did not merely disregard company rules. Tomada, in effect, issued an open invitation for others to violate those same company rules. Indeed, considering the presence of trainees in the building and Tomadas acts, Tomada failed to live up to his companys reasonable expectations. Tomadas offenses cannot be excused upon a plea of being a "first offense," or have not resulted in prejudice to the company

in any way. No employer may rationally be expected to continue in employment a person whose lack of morals, respect and loyalty to his employer, regard for his employers rules, and appreciation 10 of the dignity and responsibility of his office, has so plainly and completely been bared. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless be in connection with the employees work to constitute just cause for his separation. Thus, for misconduct or improper behavior to be a just cause for dismissal, (1) it must be serious; (2) it must relate to the performance of the employees duties; and (3) it must show that the employee has become unfit to continue working for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the service would be patently 11 inimical to his employers interest. 1avvphi1 The present case fulfills the requisites mentioned above. The Labor Arbiter established the following facts: 1. That the fire incident occurred in the second floor of the building which is specifically within the area of jurisdiction of [Tomada]. 2. That at the time of the occurrence of the fire, [Tomada] was on duty but he was not in his area of work/jurisdiction and that his absence in his area was without any approval of the supervisory authorities and/or incurred for an urgent nature which are official in character. It is not shown that [Tomada] is authorized to trouble shoot or conduct inspection beyond his area of jurisdiction. 3. That [Tomada] no less admitted that he entered the screenroom on November 22, 1997, the night when the incident occurred. The screenroom does not appear to be within the area of work jurisdiction of [Tomada]. It is the place where [Tomada] was located by supervisor Ver Ignacio when the fire was already taking place. 4. The official fire incident (Annex 1, respondents position paper) of sup ervisor Ignacio that he saw [Tomada] "soundly sleeping atop two (2) units of AVR at screenroom," was not effectively rebutted by [Tomada] other than his bare denial. The fact however remains undisputed that it was at the screenroom where [Tomada] was caught by Supervisor Ver Ignacio at the very time when the fire broke out in [Tomadas] actual area of work wherein he was supposed to be working during the time of the incident. There is no showing that Supervisor Ignacios report was motivated by personal ill -will or motive as to create a suspicion or belief that his report was personally motivated to oust [Tomada] from his job. 5. [Tomadas] allegation that he was attending to some trouble shooting works at the third and fourth floors was not established by concrete and convincing evidence. On the contrary, the logbook entries presented by the respondent (Annex "2," Reply (respondent)), do not indicate any trouble shooting work to be undertaken in the said 12 sections of the third and fourth floors. It has been shown that Tomada, in the normal and routine exercise of his functions, was directly responsible for a significant portion of respondents property. By his acts, Tomada is guilty of serious misconduct, such that he is not entitled to financial assistance or separation pay. Indeed, the Labor Arbiter even categorized Tomadas acts under "dereliction of duty and gross negligence."

Although his nearly two decades of service might generally be considered for some form of financial assistance to shield him from the effects of his termination, Tomadas acts reflect a regrettable lack of concern for his employer. If length of service justifies the mitigation of the penalty of dismissal, then this Court would be awarding disloyalty, distorting in the process the meaning of social justice 13 and undermining the efforts of labor to cleanse its ranks of undesirables. WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 23 December 2003 as well as the Resolution promulgated on 19 April 2004 of the Court of Appeals in CA-G.R. SP Nos. 69901 and 70069 with the MODIFICATION that the grant of separation pay to Eduardo M. Tomada, Sr. is DISALLOWED. SO ORDERED. G.R. No. 164016 March 15, 2010

RENO FOODS, INC., and/or VICENTE KHU, Petitioners, vs. Nagkakaisang Lakas ng Manggagawa (NLM) - KATIPUNAN on behalf of its member, NENITA CAPOR,Respondent. DECISION DEL CASTILLO, J.: There is no legal or equitable justification for awarding financial assistance to an employee who was dismissed for stealing company property. Social justice and equity are not magical formulas to erase the unjust acts committed by the employee against his employer. While compassion for the poor is desirable, it is not meant to coddle those who are unworthy of such consideration. This Petition for Review on Certiorari assails the June 3, 2004 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 76789 which denied the petition for certiorari filed by the petitioners and affirmed the award of financial assistance to respondent Nenita Capor. Factual Antecedents Petitioner Reno Foods, Inc. (Reno Foods) is a manufacturer of canned meat products of which Vicente Khu is the president and is being sued in that capacity. Respondent Nenita Capor (Capor) was an employee of Reno Foods until her dismissal on October 27, 1998. It is a standard operating procedure of petitioner-company to subject all its employees to reasonable search of their belongings upon leaving the company premises. On October 19, 1998, the guard on duty found six Reno canned goods wrapped in nylon leggings inside Capors fabric clutch bag. The only other contents of the bag were money bills and a small plastic medicine container. Petitioners accorded Capor several opportunities to explain her side, often with the assistance of the union officers of Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan. In fact, after petitioners sent a Notice of Termination to Capor, she was given yet another opportunity for reconsideration through a labor-management grievance conference held on November 17, 1999.
1 2

Unfortunately, petitioners did not find reason to change its earlier decisio n to terminate Capors employment with the company. On December 8, 1998, petitioners filed a complaint-affidavit against Capor for qualified theft in the 3 Office of the City Prosecutor, Malabon-Navotas Substation. On April 5, 1999, a Resolution was issued finding probable cause for the crime charged. Consequently, an Information was filed against Capor docketed as Criminal Case No. 207-58-MN. Meanwhile, the Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan filed on behalf of Capor a 4 complaint for illegal dismissal and money claims against petitioners with the Head Arbitration Office of the National Labor Relations Commission (NLRC) for the National Capital Region. The complaint prayed that Capor be paid her full backwages as well as moral and exemplary damages. The complaint was docketed as NLRC NCR Case No. 00-01-00183-99. Ruling of the Labor Arbiter In the proceedings before the Labor Arbiter, Capor alleged that she was unaware that her clutch bag contained the pilfered canned products. She claimed that petitioners might have planted the evidence against her so it could avoid payment of her retirement benefits, as she was set to retire in about a years time. After the submission of the parties respective position papers, the Labor Arbiter ren dered his 5 Decision dated November 16, 1999 finding Capor guilty of serious misconduct which is a just cause for termination. The Labor Arbiter noted that Capor was caught trying to sneak out six cans of Reno products without authority from the company. Under Article 232 of the Labor Code, an employer may terminate the services of an employee for just cause, such as serious misconduct. In this case, the Labor Arbiter found that theft of company property is tantamount to serious misconduct; as such, Capor is not entitled to reinstatement and backwages, as well as moral and exemplary damages. Moreover, the Labor Arbiter ruled that consistent with prevailing jurisprudence, an employee who commits theft of company property may be validly terminated and consequently, the said employee 6 is not entitled to separation pay. Ruling of the National Labor Relations Commission On appeal, the NLRC affirmed the factual findings and monetary awards of the Labor Arbiter but added an award of financial assistance. The decretal portion of the September 20, 2002 7 Decision reads: WHEREFORE, premises considered, the decision under review is hereby MODIFIED by granting an award of financial assistance in the form of separation pay equivalent to one-half month pay for every year of service. In all other respects the decision stands affirmed. All other claims of the 8 complainant are dismissed for lack of merit. Both parties moved for a reconsideration of the NLRC Decision. Petitioners asked that the award of financial assistance be deleted, while Capor asked for a finding of illegal dismissal and for 9 reinstatement with full backwages.

On February 28, 2003, the NLRC issued its Resolution for lack of merit. Ruling of the Court of Appeals

10

denying both motions for reconsideration

Aggrieved, petitioners filed a Petition for Certiorari before the CA imputing grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC for awarding financial assistance to Capor. Citing Philippine Long Distance Telephone Company v. National Labor Relations 12 Commission, petitioners argued that theft of company property is a form of serious misconduct under Article 282(a) of the Labor Code for which no financial assistance in the form of separation pay should be allowed. Unimpressed, the appellate court affirmed the NLRCs award of financial assistance to Capor. It stressed that the laborers welfare should be the primordial and paramount consideration when carrying out and interpreting provisions of the Labor Code. It explained that the mandate laid down 13 in Philippine Long Distance Telephone Company v. National Labor Relations Commission was not absolute, but merely directory. Hence, this petition. Issue The issue before us is whether the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in granting financial assistance to an employee who was validly dismissed for theft of company property. Our Ruling We grant the petition. Conviction in a criminal case is not necessary to find just cause for termination of employment. On the date that the appellate court issued its Decision, Capor filed a Manifestation informing the CA of her acquittal in the charge of qualified theft. The dispositive portion of said Decision reads: WHEREFORE, premises considered, judgment is hereby rendered acquitting Nenita Capor of the crime charged against her in this case on the ground of reasonable doubt with costs de oficio. Capor thus claims that her acquittal in the criminal case proves that petitioners failed to present substantial evidence to justify her termination from the company. She therefore asks for a finding of illegal dismissal and an award of separation pay equivalent to one month pay for every year of service. On the other hand, petitioners argue that the dismissal of a criminal action should not carry a corresponding dismissal of the labor action since a criminal conviction is unnecessary in warranting a valid dismissal for employment.
14

11

Petitioners further maintain that the ruling in Philippine Long Distance Telephone Company v. 15 National Labor Relations Commission regarding the disallowance of separation pay for those dismissed due to serious misconduct or moral turpitude is mandatory. Petitioners likewise argue 16 that in Zenco Sales, Inc. v. National Labor Relations Commission, the Supreme Court found grave abuse of discretion on the part of the NLRC when it ignored the principles laid down in the Philippine Long Distance Telephone Company v. National Labor Relations Commission. Thus, petitioners pray for the reversal of the CA Decision and reinstatement of the Labor Arbiters Decision dated November 16, 1999. Capor was acquitted in Criminal Case No. 207-58-MN based on reasonable doubt. In his Decision, the trial judge entertained doubts regarding the guilt of Capor because of two circumstances: (1) an ensuing labor dispute (though it omitted to state the parties involved), and (2) the upcoming retirement of Capor. The trial judge made room for the possibility that these circumstances could have motivated petitioners to plant evidence against Capor so as to avoid paying her retirement benefits. The trial court did not categorically rule that the acts imputed to Capor did not occur. It did not find petitioners version of the event as fabricated, baseless, or unreliable. It merely acknowledged that seeds of doubt have been planted in the jurors mind which, in a criminal case, is enough to acquit an accused based on reasonable d oubt. The pertinent portion of the trial courts Decision reads: During the cross examination of the accused, she was confronted with a document that must be related to a labor dispute. x x x The Court noted very clearly from the transcript of stenographic notes that it must have been submitted to the NLRC. This is indicative of a labor dispute which, although not claimed directly by the accused, could be one of the reasons why she insinuated that evidence was planted against her in order to deprive her of the substantial benefits she will be receiving when she retires from the company. Incidentally, this document was never included in the written offer of evidence of the prosecution. Doubt has, therefore, crept into the mind of the Court concerning the guilt of accused Nenita Capor which in this jurisdiction is mandated to be resolved in favor of her innocence. Pertinent to the foregoing doubt being entertained by this Court, the Court of Appeals citing People v. Bacus, G.R. No. 60388, November 21, 1991: "the phrase beyond reasonable doubt means not a single iota of doubt remains present in the mind of a reasonable and unprejudiced man that a person is guilty of a crime. Where doubt exists, even if only a shred, the Court must and should set the accused free." (People v. Felix, CA-G.R. No. 10871, November 24, 1992) WHEREFORE, premises considered, judgment is hereby rendered acquitting accused Nenita Capor of the crime charged against her in this case on the ground of reasonable doubt, with costs de oficio. SO ORDERED.
17

reasonable mind might accept as adequate to justify a conclusion. The evidence in this case was reviewed by the appellate court and two labor tribunals endowed with expertise on the matter the Labor Arbiter and the NLRC. They all found substantial evidence to conclude that Capor had been validly dismissed for dishonesty or serious misconduct. It is settled that factual findings of quasijudicial agencies are generally accorded respect and finality so long as these are supported by substantial evidence. In the instant case, we find no compelling reason to doubt the common findings of the three reviewing bodies. The award of separation pay is not warranted under the law and jurisprudence. We find no justification for the award of separation pay to Capor. This award is a deviation from 21 established law and jurisprudence. The law is clear. Separation pay is only warranted when the cause for termination is not attributable to the employees fault, such as those provided in Articles 283 and 284 of the Labor Code, as well 22 as in cases of illegal dismissal in which reinstatement is no longer feasible. It is not allowed when 23 an employee is dismissed for just cause, such as serious misconduct. Jurisprudence has classified theft of company property as a serious misconduct and denied the 24 award of separation pay to the erring employee. We see no reason why the same should not be similarly applied in the case of Capor. She attempted to steal the property of her long-time employer. For committing such misconduct, she is definitely not entitled to an award of separation pay. It is true that there have been instances when the Court awarded financial assistance to employees who were terminated for just causes, on grounds of equity and social justice. The same, however, has been curbed and rationalized in Philippine Long Distance Telephone Company v. National 25 Labor Relations Commission. In that case, we recognized the harsh realities faced by employees that forced them, despite their good intentions, to violate company policies, for which the employer can rightfully terminate their employment. For these instances, the award of financial assistance was allowed. But, in clear and unmistakable language, we also held that the award of financial assistance shall not be given to validly terminated employees, whose offenses are iniquitous or reflective of some depravity in their moral character. When the employee commits an act of dishonesty, depravity, or iniquity, the grant of financial assistance is misplaced compassion. It is tantamount not only to condoning a patently illegal or dishonest act, but an endorsement thereof. It will be an insult to all the laborers who, despite their economic difficulties, strive to maintain good values and moral conduct. In fact, in the recent case of Toyota Motors Philippines, Corp. Workers Association (TMPCWA) v. 26 National Labor Relations Commission, we ruled that separation pay shall not be granted to all employees who are dismissed on any of the four grounds provided in Article 282 of the Labor Code. Such ruling was reiterated and further explained in Central Philippines Bandag Retreaders, Inc. v. 27 Diasnes: To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the award of separation pay based on social justice when an employees dismissal is based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission of a crime against the person of the employer or his immediate family grounds under Art. 282 of the Labor Code that sanction dismissals of employees. They must be most judicious and circumspect in awarding separation pay or financial assistance as the constitutional policy to provide full protection to labor is not meant to be an instrument to oppress

20

In Nicolas v. National Labor Relations Commission, we held that a criminal conviction is not necessary to find just cause for employment termination. Otherwise stated, an employees 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 employers 19 interests. Criminal cases require proof beyond reasonable doubt while labor disputes require only substantial evidence, which means such relevant evidence as a

18

the employers. The commitment of the Court to the cause of labor should not embarrass us from sustaining the employers when they are right, as here. In fine, we should be more cautious in awarding financial assistance to the undeserving and those who are unworthy of the liberality of the law.1avvphi1 We are not persuaded by Capors argument that despite the finding of theft, she should still be granted separation pay in light of her long years of service with petitioners. We held in Central 28 Pangasinan Electric Cooperative, Inc. v. National Labor Relations Commission that: Although long years of service might generally be considered for the award of separation benefits or some form of financial assistance to mitigate the effects of termination, this case is not the appropriate instance for generosity x x x. The fact that private respondent served petitioner for more than twenty years with no negative record prior to his dismissal, in our view of this case, does not call for such award of benefits, since his violation reflects a regrettable lack of loyalty and worse, betrayal of the company. If an employees length of service is to be regarded as justification for moderating the penalty of dismissal, such gesture will actually become a prize for disloyalty, distorting the meaning of social justice and undermining the efforts of labor to clean its ranks of undesirables. Indeed, length of service and a previously clean employment record cannot simply erase the gravity 29 of the betrayal exhibited by a malfeasant employee. Length of service is not a bargaining chip that can simply be stacked against the employer. After all, an employer-employee relationship is symbiotic where both parties benefit from mutual loyalty and dedicated service. If an employer had treated his employee well, has accorded him fairness and adequate compensation as determined by law, it is only fair to expect a long-time employee to return such fairness with at least some respect and honesty. Thus, it may be said that betrayal by a long-time employee is more insulting and odious for a fair employer. As stated in another case: x x x The fact that [the employer] did not suffer pecuniary damage will not obliterate respondents betrayal of trust and confidence reposed by petitioner. Neither would his length of service justify his dishonesty or mitigate his liability. His length of service even aggravates his offense. He should have been more loyal to petitioner company from which he derived his family bread and butter for 30 seventeen years. While we sympathize with Capors plight, being of retirement age and having served petitioners for 39 years, we cannot award any financial assistance in her favor because it is not only against the law but also a retrogressive public policy. We have already explained the folly of granting financial assistance in the guise of compassion in the following pronouncements: x x x Certainly, a dishonest employee cannot be rewarded with separation pay or any financial benefit after his culpability is established in two decisions by competent labor tribunals, which decisions appear to be well-supported by evidence. To hold otherwise, even in the name of compassion, would be to send a wrong signal not only that "crime pays" but also that one can enrich himself at the expense of another in the name of social justice. And courts as well as quasijudicial entities will be overrun by petitioners mouthing dubious pleas for misplaced social justice. Indeed, before there can be an occasion for compassion and mercy, there must first be justice for all. Otherwise, employees will be encouraged to steal and misappropriate in the expectation that eventually, in the name of social justice and compassion, they will not be penalized but instead financially rewarded. Verily, a contrary holding will merely encourage lawlessness, dishonesty, and 31 duplicity. These are not the values that society cherishes; these are the habits that it abhors.

WHEREFORE, the petition is GRANTED. The assailed June 3, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 76789 affirming the September 20, 2002 Decision of the National Labor Relations Commission isANNULLED and SET ASIDE. The November 16, 1999 Decision of the Labor Arbiter is REINSTATED andAFFIRMED. SO ORDERED. G.R. No. 165199 November 27, 2009

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, vs. INOCENCIO B. BERBANO, JR., Respondent. DECISION CARPIO, J.: The Case This is a petition for review of the Court of Appeals Decision dated 21 January 2004 and Resolution dated 9 September 2004 in CA-G.R. SP No. 75125. The Court of Appeals reversed the 3 Decision dated 29 May 2002 and Resolution dated 29 October 2002 of the National Labor Relations Commission (NLRC). The Antecedent Facts The facts, as summarized by the Labor Arbiter and adopted by the NLRC and the Court of Appeals, are as follows: In his position paper, complainant [Inocencio B. Berbano, Jr.] alleged that he was hired by the respondent Philippine Long Distance [Telephone] Company (PLDT, for brevity) on June 1, 1988 as Engineering Assistant. After his probationary period of three months, he was issued an appointment letter with a status of a regular employee of respondent. After several promotions, complainant finally held the position of Computer Assistant M-2 on June 16, 1993 in the Sampaloc Exchange Department/Operation and Maintenance Center of the respondent. Although his function is "Computer Assistant M-2," complainant further alleges that he performed the functions of a Specialist for EWSD who was responsible for handling, operations and maintenance of the whole EWSD Network handling network database, fault clearance, database modification alarm monitoring, traffic routing, trunk administration, password and tariff administration and others. Being trained as EW[S]D OMC Specialist, complainant claims that respondent expected him to have "depth of understanding" in continuous painstaking research and study. Thus, he initiated a study of "hi-tech EWSD Switching Equipment," a part of which is the software installation of various subscriber service features and control operation. It is at this time that complainant tapped his brother-in-laws number (911-8234) without the latters knowledge and installed service features in it for study. Such service features included: 1. Security Code
1 2

2. Conference Call Three (Three-way calling) 3. Abbreviated Dialing 4. Hot Line Delayed 5. Call Diversion Immediate 6. Call Diversion Dont Answer 7. Call Hold 8. Non-Changeable Later, on April 21, 1994, complainant learned that the phone number 911-8234 is under investigation by the Quality Control Inspection Office due to the unauthorized installation of service features thereto. Complainant admitted that he was responsible for such installation for purposes of study and testing. Formal investigation ensued on April 22, 1994 and subsequently, on July 6, 1994, complainant received a Memorandum from the Department Head of the Sampaloc Exchange asking him to explain within 72 hours upon receipt why an [a]dministrative [a]ction should not be taken against complainant regarding the matter of the unauthorized installations mentioned at the phone number 911-8234. On July 11, 1994, complainant submitted a written explanation claiming that the aforementioned installation of service features was for purposes of study and research. Finding unacceptable the complainants explanation, respondent PLDT dismissed complainant f rom the service effective August 16, 1994. On the other hand, respondent submits that upon discovery of the installation of service features to the phone number 911-8234 without the authorization and approval of the respondent, and after investigation, complainant readily admitted having programmed the said features and that this installation was without prior authorization. Respondents position paper further avers that having worked as [a] Computer Assistant, complainant took advantage of his position and his access to respondent companys computer to favor his brother-in-laws telephone by irregularly providing it with special features. Such special features included the following: 1. Push Button 2. Test Call Only 3. Malicious Call Identification 4. Non-chargeable (Calls to subscriber with this class of service are free of charge for the caller)

5. Three-way Calling (Allows a third party to be linked to an existing call) 6. Call Hold 7. Abbreviated dialing 90 numbers 8. Hotline delay 9. Pin Code 10. Call Diversion Immediate 11. Call Diversion to Fixed Announcement 12. Traffic Restr. Class Act Auth. (Authorization to activate traffic restriction classes) 13. Call Diversion Dont Answer (Authorization to enter a destination no. for call diversion on no answer) 14. Traffic Restriction Class 1 15. Abbreviated Dial Number Mod. Auth. (Authorization for subs controlled entry and and modification of abbreviated nos.) 16. Call Diversion Immediate (Modification Authorization) 17. Hotline Delay Mod. Auth.(Modification Authorization) Respondent also found complainants explanation that the installment was for testing purposes, unmeritorious and unjustified considering that said special features were only deleted upon discovery, two months after their installations. Further, testings, according to the respondent 4 companys rules should only last for one day. On 28 September 1998, the Labor Arbiter rendered a Decision, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered ordering the reinstatement of the complainant to his previous position of Computer Assistant M-2 without loss of seniority rights. Furthermore, respondent is hereby ordered to pay to the complainant the amount of FIVE HUNDRED THIRTY SEVEN THOUSAND FOUR HUNDRED TWENTY PESOS (P537,420.00) representing the backwages of the complainant from the time that he was terminated in August 1994 up to the present, minus any possible income earned elsewhere since complainants dismissal. The equivalent ten (10%) percent attorneys fees of the total award in the amount of P53,742.00 is also granted. SO ORDERED.
6 5

On 29 May 2002, the NLRC rendered a Decision reversing that of the Labor Arbiter, with the following dispositive portion: We find the appeal without merit. WHEREFORE, premises considered, the assailed decision is hereby reversed and set aside. Respondents are adjudged not guilty of illegal dismissal. Accordingly, the award of backwages and attorneys fees is hereby deleted from the decision. SO ORDERED.
7

The Courts Ruling

On whether the Court of Appeals had jurisdiction over the Petition for Certiorari filed by respondent We first consider the issue on jurisdiction raised by petitioner. Petitioner contends that the NLRC Decision dated 29 May 2002 was received by respondent on 29 June 2002; hence, respondent had only ten (10) days, or up to 09 July 2002, to file a motion for reconsideration of the NLRC decision. Without a motion for reconsideration timely filed, the NLRC decision would become final and executory, pursuant to Section 2, paragraphs (a), (b) and (c) of Rule VIII [now Section 14 of Rule VII] of the New Rules of Procedure of the NLRC. Petitioner claims that when respondent filed a motion for reconsideration of the NLRC decision on 15 August 2002, which was beyond the 10-day reglementary period imposed by law, the decision was already final and executory. Consequently, the Court of Appeals had no jurisdiction over the petition for certiorari (assailing the NLRC decision) filed by respondent on 10 February 2003. The New Rules of Procedure of the NLRC mandate that a motion for reconsideration of the NLRC decision must be filed within 10 calendar days from receipt of said decision, otherwise, the decision 11 shall become final and executory. A motion for reconsideration of the NLRC decision must be filed before the remedy of a petition for certiorari may be availed of, to enable the commission to pass 12 upon and correct its mistakes without the intervention of the courts. Failure to file a motion for reconsideration of the decision is a procedural defect that generally warrants a dismissal of the 13 14 petition for certiorari. However, in Surima v. NLRC, we held that despite procedural lapses, fundamental consideration of substantial justice may warrant this Court to decide a case on the merits rather than dismiss it on a technicality. In so doing, we exercise our prerogative in labor cases that no undue sympathy is to be accorded to any claim of procedural misstep, the idea being that our power must be exercised according to justice and equity and substantial merits of the 15 controversy. In the instant case, we are persuaded that the rigid rules of procedure must give way to the demands of substantial justice, and that the case must be decided on the merits. Moreover, the petition filed with the Court of Appeals sought the issuance of a writ of certiorari which is a prerogative writ, not demandable as a matter of right, but issued in the exercise of judicial 16 discretion. Thus, the Court of Appeals committed no error when it admitted the petition for certiorari filed by respondent, and had jurisdiction over said petition. On whether the Court of Appeals erred in reversing the NLRC decision despite its finding that respondent committed the infraction that caused his dismissal Petitioner contends that the Court of Appeals erred when it found respondent to have committed an infraction, i.e., programming and installing special features in his (respondents) brother -in-laws telephone line without prior authorization from petitioner, but nonetheless ruled that the infraction was not serious enough to warrant respondents dismissal from service. Petitioner also asserts that, contrary to respondents claim, due process was observed in the dismissal of respondent. Well-settled is the rule that no employee shall be validly dismissed from employment without the observance of substantive and procedural due process. The minimum standards of due process are prescribed under Article 277(b) of the Labor Code of the Philippines (Labor Code) to wit: Art. 277. Miscellaneous Provisions.

On 15 August 2002, Berbano filed a Motion for Reconsideration, but this was denied by the NLRC 8 in its Resolution dated 29 October 2002. The Court of Appeals Ruling Berbano filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Revised Rules of Civil Procedure. On 21 January 2004, the Court of Appeals rendered judgment granting the petition and reversing the NLRC decision. We quote the dispositive portion of the Court of Appeals decision below. WHEREFORE, premises considered, the petition is GRANTED. The decision of the public respondent NLRC promulgated on May 29, 2002 is REVERSED and SET ASIDE and the decision dated September 28, 1998 of the Honorable Labor Arbiter Romulus S. Prota[s]io is hereby REINSTATED in all respect. Private respondent PLDT is ordered to pay the backwages to which the petitioner is entitled from January 15, 2003, the date of his dismissal, until his actual reinstatement. SO ORDERED.
9

PLDT filed a Motion for Reconsideration, but this was denied by the Court of Appeals in its 10 Resolution of 9 September 2004. Hence, this appeal. The Issues Petitioner PLDT raises the following issues for our consideration: 1. Whether the Court of Appeals erred in reversing the NLRC decision despite its finding that respondent committed the infraction that caused his dismissal; 2. Whether the Court of Appeals erred in ordering petitioner to pay respondent backwages and attorneys fees; 3. Whether respondent Inocencio Berbano, Jr. was denied due process of law; and 4. Whether the Court of Appeals had jurisdiction over the Petition for Certiorari filed by respondent.

xxx (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the cause for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires, in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. x x x The above provision is implemented by Section 2, Rule XXIII of Book V of the Omnibus Rules Implementing the Labor Code, which states: Section 2. Standards of due process: requirements of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed: I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. x x x. Thus, dismissal from service of an employee is valid if the following requirements are complied with: (a) substantive due process which requires that the ground for dismissal is one of the just or authorized causes enumerated in the Labor Code, and (b) procedural due process which requires 17 that the employee be given an opportunity to be heard and defend himself. The employee must be furnished two written notices the first notice apprises the employee of the particular act or omission for which his dismissal is sought, and the second notice informs the employee of the 18 employers decision to dismiss him. In this case, petitioner formally notified respondent of the complaint against him through an interoffice memorandum dated 6 July 1994. The memorandum enumerated the service features allegedly installed by respondent in his brother-in-laws telephone line (911-8234), and stated the acts of the respondent complained of, viz: You readily admitted to QCI that subscriber of subject telephone is your brother-in-law and that you installed the features claiming it was for testing purposes. Records show that subject telephone was temporarily disconnected last March 24, 1994 for nonpayment, reconnect order was faxed to Data Control Unit of OMCC at 1:30PM. In the process of 19 reconnection at OMCC, subject telephone was found already working. 1avvphi1

In the same memorandum, petitioner asked respondent to explain within 72 hours upon receipt 20 thereof why an administrative action should not be imposed against him. On 11 July 1994, 21 respondent submitted his "written explanation" or reply to the complaint against him. More than a month thereafter, or on 9 August 1994, petitioner issued another inter-office memorandum informing respondent that his act of installing special features in his brother-in-laws telephone line without authorization from petitioner constituted "gross misconduct" and was "grossly violative of existing 22 company rules and regulations," hence, warranting his termination from service. Clearly, petitioner complied with the requirement of procedural due process. As regards substantial due process, the grounds for termination of employment must be based on just or authorized causes. Article 282 of the Labor Code enumerates the just causes for termination of employment by the employer, to wit: Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. (Emphasis supplied) The notice of termination sent by petitioner to respondent indicated that the latter was dismissed from service due to unauthorized installation of service features in his brother-in-laws telephone line, which allegedly constituted gross misconduct. Thus, we are left with the issue on whether the said unauthorized act of the respondent constitutes a serious misconduct which warrants dismissal from service under Article 282(a) of the Labor Code. Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and 23 implies wrongful intent and not mere error of judgment. Ordinary misconduct would not justify the termination of services of the employee as the Labor Code is explicit that the misconduct must be 24 serious. To be serious, the misconduct must be of such grave and aggravated character and not 25 merely trivial and unimportant. Such misconduct, however serious, must nevertheless be in 26 connection with the employees work to constitute just cause for his separation. As amplified by jurisprudence, misconduct, to be a just cause for dismissal, must (a) be serious; (b) relate to the performance of the employees duties; and (c) show that the employee has become unfit to continue 27 28 working for the employer. Moreover, in National Labor Relations Commission v. Salgarino, this Court stressed that "[i]n order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent."

We believe that the misconduct of respondent is not of serious n ature as to warrant respondents dismissal from service. The records of this case are bereft of any showing that the alleged misconduct was performed by respondent with wrongful intent. On the contrary, respondent readily admitted having installed the service features in his brother-in-laws telephone line for purposes of study and research which could have benefitted petitioner. Respondent explained the installation of the service features in the "written explanation" he sent to petitioner as follows: xxx There had been a time on that period where I conducted special study on service features of EWSD. It includes testing the integrity of its actual operation in all digital exchanges connected to our OMC. During which [sic] I conducted my study of these features for Cubao there was no available test number at OMC for code "911" and "912". So to complete my study I decided to use the number 29 9118234 at home temporarily and remove those features after the test. Moreover, as pointed out by the appellate court, respondents misconduct did not result in any economic loss on the part of petitioner since the service features were not yet available in the market at the time respondent caused its unauthorized installation. We also note that respondents dedicated service to petitioner for almost six (6) years, prior to his commission of the misconduct, is apparent from the records. His employment was untainted with any irregularity. He had been promoted several times, and had been chosen by petitioner on several occasions to attend various trainings to improve his craft. He conducted advance research based on his training background and technical expertise, and had even compiled a service feature manual which served as quick reference guide of his colleagues for inquiries regarding "subscriber 30 operation of special (or service) features." Based on the foregoing, we consider respondents offense to be a simple misconduct which does not merit termination of his employment. The penalty of dismissal from service is not commensurate to respondents offense. Although petitioner, as an employer, has the right to discipline its erring employees, exercise of such right should be tempered with compassion and understanding. The magnitude of the infraction committed by an employee must be weighed and equated with the penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of 31 dismissal or termination from the service. The employer should bear in mind that in termination cases, what is at stake is not simply the employees job or position but his very livelihood. On whether the Court of Appeals erred in ordering petitioner to pay respondent backwages and attorneys fees Since respondent was illegally dismissed, he is entitled to reinstatement without loss of seniority rights, and to payment of backwages. Article 279 of the Labor Code, as amended by Section 34 of Rep. Act No. 6715, provides as follows: Art. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages inclusive of allowances, and to his other benefits or

their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Thus, an illegally dismissed employee is entitled to the twin reliefs of (a) either reinstatement or 32 separation pay, if reinstatement is no longer viable, and (b) backwages. These reliefs are given to 33 alleviate the economic damage suffered by the illegally dismissed employee. Finally, we find no error in the award of attorneys fees. In San Miguel Corporation v. Aballa, we held that in actions for recovery of wages or where an employee was forced to litigate and thus incur expenses to protect his rights and interests, a maximum of 10% of the total monetary award 35 by way of attorneys fees is justifiable under Article 111 of the Labor Code; Section 8, Rule VIII of 36 Book III of the Omnibus Rules Implementing the Labor Code; and paragraph 7, Article 2208 of the 37 Civil Code. The award of attorneys fees is proper and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a 38 showing that the lawful wages were not paid accordingly. WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals Decision dated 21 January 2004 in CA-G.R. SP No. 75125. SO ORDERED. G.R. No. 182216 December 4, 2009
34

PLANTATION BAY RESORT and SPA and EFREN BELARMINO, Petitioners, vs. ROMEL S. DUBRICO, GODFREY D. NGUJO and JULIUS D. VILLAFLOR, Respondents. DECISION CARPIO MORALES, J.: Via petition for review on certiorari, petitioners Plantation Bay Resort and Spa (Plantation Bay) and 1 Efren Belarmino (Belarmino) challenge the Court of Appeals August 30, 2007 Decision and March 2 3 3, 2008 Resolution dismissing their petition and affirming the March 24, 2006 and June 23, 4 2006 Resolutions of the National Labor Relations Commission (NLRC) in Case No. V-000366-2005 in favor of herein respondents. Respondents are former employees of Plantation Bay located in Cebu, of which Belarmino is the Manager. On several dates in September 2004, after Plantation Bay issued a series of memoranda 5 6 and conducted seminars relative to its drug-free workplace policy, Plantation Bay, in compliance with Republic Act No. 9165 (Comprehensive Dangerous Drugs Act of 2002), conducted surprise random drug tests on its employees. The drug tests, said to have been carried out with the assistance of the Philippine National Police-Scene of Crime Operations (SOCO), were administered on about 122 employees by the Martell Medical Trade and Lab Services (Martell), a drug testing laboratory. And confirmatory tests were conducted by the Philippine Drug Screening Laboratory, Inc. (Phil. Drug), a Department of Health-accredited laboratory. Respondent Romel Dubrico (Dubrico) failed to take the drug test conducted on September 14, 7 2004, hence, he was issued a memorandum requiring him to appear in a mandatory conference on September 20, 2004. Before the scheduled conference or on September 19, 2004, Dubrico

explained in writing his failure to undergo the drug test, he averring that, inter alia, the procedure for the random drug testing was not followed such that he was not informed about his selection; and that he was at the appointed time and place for the pre-test meeting but that the duty manager was not around, hence, he left and failed to be tested. Dubrico was later tested and found positive for use of methamphetamine hydrochloride (shabu). Twenty other employees were found positive for use of shabu including herein respondents Godfrey Ngujo (Ngujo) and Julius Villaflor (Villaflor). In compliance with separate memoranda issued by the management of Plantation Bay, the employees submitted their explanations on the result of the tests, which explanations were found unsatisfactory, hence, Plantation Bay dismissed them including herein respondents. Respondents Dubrico, Ngujo and Villaflor and three others thereupon filed on November 18, 2004 10 their respective complaints for illegal dismissal, questioning the conduct of the drug tests without the presence of the DOLE Regional Director or his representative. By Decision of April 18, 2005, Labor Arbiter Jose G. Gutierrez dismissed the employees complaints, holding that in testing positive for the use of shabu, they were guilty of serious misconduct, hence, Plantation Bay validly terminated their employment; and that they were afforded due process, they having been issued memoranda as to the mandatory investigation and given the 12 chance to, as they did refute the results of the drug tests by submitting results of recent drug tests. The Labor Arbiter discredited the drug test results presented by the employees as the tests were taken more than 72 hours after the conduct of the random drug tests. On appeal, the NLRC, by Decision of October 26, 2005, affirmed the Decision of the Labor Arbiter. On respondents motion for reconsideration, it, however, by Resolution of March 24, 2006, reversed its October 26, 2005 Decision and declared that respondents were illegally dismissed. In finding for respondents, the NLRC held that the results of the confirmatory drug tests cannot be given credence since they were conducted prior to the conduct by the employer of the drug tests. It ratiocinated: Considering the indubitable documentary evidence on record notably submitted by respondents [petitioners herein] themselves, we agree with complainants that either or both drug tests and confirmatory tests conducted on them were fabricated, farce or sham . For how could one "confirm" some thing which was yet to be established or discovered? Needless to say, the drug testing should always come ahead of the confirmatory testing, not the other way around. We thus agree with complainants that if the drug tests against them were true, the supposed confirmatory tests conducted on them were not based on their urine samples that were the subject of the drug tests. Or that is the confirmatory tests were correct, these could not have been gotten from their urine samples which were yet to undergo drug testing. At any rate, there is not only doubt that on the version of respondents but also their conduct is highly suspicious based on their own evidence. Thus, we now rule that respondents were not really into drugs. (Emphasis and underscoring supplied)1avvphi1
11 9

On the issue of due process, the NLRC abandoned its earlier statement that it was the SOCO which conducted the drug tests, this time declaring that it was Martell which actually administered them. It added that respondents were not given the opportunity to examine the evidence and confront the witnesses against them through their counsel. The NLRC accordingly reversed the Decision of the Labor Arbiter, disposing as follows: WHEREFORE, the Appeal is DISMISSED, and the assailed Decision is AFFIRMED in toto. SO ORDERED.
13

Its motion for reconsideration having been denied by Resolution of June 23, 2006, Plantation Bay appealed to the Court of Appeals, arguing that, inter alia, the veracity of the confirmatory tests was raised by respondents only when they filed a belated Motion for Reconsideration of the NLRC Decision, hence, the NLRC gravely abused its discretion when it reversed its findings based on such new issue. The appellate court affirmed the NLRC March 24, 2006 Resolution with modification by deleting the award of damages. Hence, the present petition, petitioners reiterating the same issues raised in the appellate court. Additionally, they maintain that in terminating the services of respondents, they relied on the results of the random drug tests undertaken by an accredited and licensed drug testing facility, and if the results turned out to be questionable or erroneous, they should not be made liable therefor. The petition is bereft of merit. While it is a well-settled rule, also applicable in labor cases, that issues not raised below cannot be 14 raised for the first time on appeal, there are exceptions thereto among which are for reasons of public policy or interest. The NLRC did not err in considering the issue of the veracity of the confirmatory tests even if the same was raised only in respondents Motion for Reconsideration of its Decision, it being crucial in determining the validity of respondents dismissal from their employment. Technical rules of procedure are not strictly adhered to in labor cases. In the interest of substantial justice, new or additional evidence may be introduced on appeal before the NLRC. Such move is proper, provided due process is observed, as was the case here, by giving the opposing party 15 sufficient opportunity to meet and rebut the new or additional evidence introduced. The Constitution no less directs the State to afford full protection to labor. To achieve this goal, technical rules of procedure shall be liberally construed in favor of the working class in accordance 16 with the demands of substantial justice. On the merits, the petition just the same fails. The importance of the confirmatory test is underscored in Plantation Bays own "Policy and Procedures," in compliance with Republic Act No. 9165, requiring that a confirmatory test must be conducted if an employee is found positive for drugs in the Employees Prior Screening Test, and that both t ests must arrive at the same positive 17 result. 1avvphil1

Records show the following timeline, based on the reports on respondents respective drug 18 19 tests administered by Martell and confirmatory tests undertaken by the Phil. Drug: Name Romel Dubrico Godfrey Ngujo Julius Villaflor (Underscoring supplied) As reflected in the above matrix, the confirmatory test results were released earlier than those of the drug test, thereby casting doubts on the veracity of the confirmatory results. Indeed, how can the presence of shabu be confirmed when the results of the initial screening were not yet out? Plantation Bays arguments that it should not be made liable thereof and that the doubt arising from the time of the conduct of the drug and confirmatory tests was the result of the big volume of printouts being handled by Martell do not thus lie. It was Plantation Bays responsibility to ensure that the tests would be properly administered, the results thereof being the bases in terminating the employees services. Time and again, we have ruled that where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal. The burden is on the employer to prove that the termination of employment was for a valid and legal cause. For an employee's dismissal to be valid, (a) the dismissal must be for a valid cause 20 and (b) the employee must be afforded due process. (Emphasis supplied) In fine, as petitioners failed to indubitably prove that respondents were guilty of drug use in contravention of its drug-free workplace policy amounting to serious misconduct, respondents are deemed to have been illegally dismissed. As to the appellate courts deletion of the award of damages, the same is in order, there being no clear showing that the termination of respondents services was actuated by bad faith. WHEREFORE, the petition is DENIED. SO ORDERED. G.R. No. 182299 February 22, 2010 Drug Test Urine sample received on 09/29/04 at 5:14 p.m. Urine sample received on 09/29/04 at 5:24 p.m. Urine sample received on 09/29/04 at 5:32 p.m. Confirmatory Test Issued on 09/29/04 at3:57 p.m. Issued on 09/29/04 at3:57 p.m. Issued on 09/29/04 at4:15 p.m.

NATIONAL LABOR RELATIONS COMMISSION and MAGIC SALES, INC. represented by JOSE Y. SY,Respondents. DECISION VILLARAMA, JR., J.: The present petition for review on certiorari seeks to annul the Decision dated August 31, 2007, as 2 well as the Resolution dated March 6, 2008, of the Court of Appeals in CA-G.R. SP No. 78925, 3 which affirmed the Decision of the National Labor Relations Commission (NLRC) in NLRC-NCR CA No. 028180-01. Respondent Magic Sales, Inc. (MSI) is a domestic corporation engaged in the business of trading 4 consumer goods such as soap, biscuits, candy, coffee, and juice drinks, among other things, while 5 respondent Jose Y. Sy is the companys President and General Manager. On the other hand, 6 petitioners claim to be employees of MSI. It appears that on January 18, 2000, Sy ordered an inventory of the companys stock after noticing a steady increase in the companys payables and a decline in its investments. Mr. Jovencio A. Daroya, a Certified Public Accountant and the Corporate Finance Manager of MSI, was tasked to conduct a thorough audit of the companys business. Sy then informed petitioner Wilfredo Baron that he had to be temporarily relieved of some of his duties as Operations Manager to allow the audit process to take its course for reconciliation of documents. In a memorandum dated February 18, 2000, the employees were instructed (1) to give all the support needed by the audit team; (2) to surrender all keys and documents; (3) not to bring out anything belonging to management; and (4) to undergo a search before leaving the 7 office. Petitioners, however, refused to cooperate in the audit process, and thereafter, refrained 8 9 from reporting for work. Nonetheless, the audit was completed, and an Internal Audit Report was submitted on April 29, 2000. According to the audit team, there were several irregularities in the operations of MSI. The accounting system designed by Baron was generally weak and compliance to procedures was not strictly implemented. The team was also convinced that Baron abused his authority and took advantage of the laxity of the system he designed. It likewise believed that Barons subordinates were not honest enough to report the anomalies to the management; otherwise, the irregularities could have been limited. The audit team further concluded that there was collusion between Baron 10 and his subordinates and that they benefited from the irregularities. Consequently, management informed petitioners of the charges against them, to wit: (1) serious misconduct and willful disobedience to the companys lawful orders; (2) fraud or willful breach of trust reposed by the employer; and (3) abandonment or absence without official leave. Although petitioners were required to explain and refute the charges, they neither rebutted the same nor 11 attended the investigation. Hence, MSI decided to terminate their services. Petitioners forthwith filed complaints with the NLRC Arbitration Branch against MSI and Sy for illegal dismissal, 13th month pay, service incentive leave pay, moral and exemplary damages and 13 14 attorneys fees. In their Joint Position Paper, petitioners principally argued that they were dismissed whimsically and capriciously in a very oppressive manner, without valid cause and without due process of law. They prayed that respondents be declared guilty of illegal dismissal and
12 1

WILFREDO M. BARON, BARRY ANTHONY BARON, RAMIL CAYAGO, DOMINADOR GEMINO, ARISTEO PUZON, BERNARD MANGSAT, MARIFE BALLESCA, CYNTHIA JUNATAS, LOURDES RABAGO, JEFFERSON DELA ROSA and JOMAR M. DELA ROSA, Petitioners, vs.

that they be reinstated to their respective former positions without loss of seniority rights, with full back wages and payment of damages. They also prayed for payment of their monetary claims. For its part, MSI countered in its Consolidated Position Paper that the petitioners are not entitled to the reliefs prayed for because they were validly dismissed. MSI insisted that Baron orchestrated the massive irregularities and grand scale fraud. With the help of the other petitioners, they were able to misappropriate company funds and goods. When petitioners sensed that their offenses would be discovered during the audit, they suddenly abandoned their work. Furthermore, MSI insisted that petitioners are guilty of insubordination by refusing to cooperate with the company and subject themselves to audit to clear themselves. Worse, petitioners attempted to sabotage the audit by locking their drawers and refusing to surrender the keys, stealing files and destroying documents and other papers. On January 22, 2001, Labor Arbiter Jose G. De Vera rendered judgment ordering respondents to reinstate petitioners Aristeo Puzon, Dominador Gemino, Bernard Mangsat, Ramil Cayago, Barry Anthony Baron, Cynthia Junatas, Marife Ballesca and Lourdes Rabago to their former positions with all the rights, privileges, and benefits appurtenant thereto, plus full back wages from the date of dismissal until finally reinstated. Respondents were further ordered to pay money claims and attorneys fees to petitioners. However, the complaints of Wilfredo Baron, Jefferson dela Rosa and Jomar dela Rosa were dismissed for lack of merit. Separate appeals to the NLRC were filed by both parties. Petitioners argued that the decision is not in accord with law and jurisprudence and that they are appealing partially for the denial of their claim for damages. On the other hand, respondents claimed that the Labor Arbiter erred in holding that: (1) petitioners Gemino, Puzon, Barry Baron and Cayago were employees of MSI and that they were illegally dismissed; (2) petitioners Ballesca, Junatas and Rabago were dismissed without just and valid cause; and (3) respondent Sy is solidarily liable with MSI. Respondents also argued that the Labor Arbiter erred in granting petitioners money claims. On December 27, 2002, the NLRC rendered a Decision WHEREFORE, judgment is hereby rendered: 1. Treating the appeal of complainants Jomar de la Rosa and Jefferson dela Rosa as withdrawn; 2. Dismissing the appeal of Wilfredo Baron for being without merit; and 3. Dismissing the complaints of Aristeo Puzon, Dominador Gemino, Bernard [Mangsat], Ramil Cayago, Barry Anthony [Baron], Cynthia Junatas, Marife Ballesca and Lourdes Rabago for being also without merit. SO ORDERED. According to the NLRC, there was enough evidence to show that there was conspiracy among the employees of MSI. It found that massive irregularities were committed in the company and one (1) of those involved was the operations manager himself. The audit revealed that it was Wilfredo Baron who orchestrated the massive irregularities and grand scale fraud which, however, could no longer be documented because of the theft of company files and deletion of computer files which he and the other petitioners had access to. The NLRC found that petitioners anticipated that the audit
18 17 16 15

would eventually lead to their dismissal and prosecution in court. Hence, they abandoned their work 19 and filed cases at the start of the audit. The NLRC held that the acts of abandoning their jobs without prior leave and of not surrendering all the keys and documents in their possession so that management could thoroughly conduct its audit are enough reasons to justify their termination pursuant to Article 282 of the Labor Code, as amended. Petitioners filed a Motion for Reconsideration. The NLRC, however, was not persuaded, and 21 resolved to deny the motion in its Order dated May 7, 2003. Contending that the NLRC acted with grave abuse of discretion amounting to lack or in excess of 22 jurisdiction in rendering its Decision and Order, petitioners filed a Petition for Certiorari with the Court of Appeals. On August 31, 2007, the appellate court rendered a Decision, reads:
23 20

the dispositive portion of which

WHEREFORE, for lack of merit, the petition is DENIED due course and, accordingly, DISMISSED. Consequently, the assailed decision of the National Labor Relations Commission is AFFIRMED. SO ORDERED. Later, the Court of Appeals denied petitioners motion for reconsideration March 6, 2008. Hence, the present petition. The core issues in this controversy are: (1) Were petitioners validly dismissed on the grounds of grave misconduct and loss of confidence? and (2) Were petitioners denied of their right to due process when they were terminated from their employment? At the outset, it must be stressed that the issues raise questions of fact which are not proper subjects of a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended. It is axiomatic that in an appeal by certiorari, only questions of law may be 26 reviewed. Furthermore, factual findings of administrative agencies, when affirmed by the Court of Appeals, are conclusive on the parties and not reviewable by this Court. This is so because of the special knowledge and expertise gained by these quasi-judicial agencies from presiding over matters falling within their jurisdiction, which is confined to specific matters. So long as these factual 27 findings are supported by substantial evidence, this Court will not disturb the same. In this case, the Labor Arbiter found that petitioners Aristeo Puzon, Dominador Gemino, Bernard Mangsat, Ramil Cayago, Barry Anthony Baron, Cynthia Junatas, Marife Ballesca and Lourdes Rabago were illegally dismissed. The NLRC disagreed with the Labor Arbiter and reversed the latters findings. On appeal, the appellate court concurred with the findings of the NLRC. In view of the discordance between the findings of the Labor Arbiter, on one hand, and the NLRC and the Court of Appeals, on the other, there is a need for the Court to review the factual findings and the conclusions based on the said findings. As this Court held in Diamond Motors Corporation v. Court 28 of Appeals: A disharmony between the factual findings of the Labor Arbiter and the National Labor Relations Commission opens the door to a review thereof by this Court. Factual findings of administrative
24

in its Resolution

25

dated

as follows:

agencies are not infallible and will be set aside when they fail the test of arbitrariness. Moreover, when the findings of the National Labor Relations Commission contradict those of the labor arbiter, this Court, in the exercise of its equity jurisdiction, may look into the records of the case and reexamine the questioned findings. The Constitution, statutes and jurisprudence uniformly mandate that no worker shall be dismissed except for a just or valid cause provided by law, and only after due process is properly observed. In 29 a recent decision, this Court said that dismissals have two facets: first, the legality of the act of dismissal, which constitutes substantive due process; and, second, the legality of the manner of dismissal, which constitutes procedural due process. The just causes for termination of employment are enumerated in Article 282 of the Labor Code, as amended, viz.: ART. 282. Termination by employer. An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. In the present case, respondents terminated petitioners from their employment based on the following grounds: (1) serious misconduct and willful disobedience to the companys la wful orders; (2) fraud or willful breach of trust reposed by the employer; and (3) abandonment or absence without official leave. Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must nevertheless be in connection with the employees work to constitute just 30 cause for his separation. To our mind, respondents were able to prove substantially the existence of serious misconduct committed by petitioners to justify their termination from employment. Daroya submitted a 31 report dated February 19, 2000 stating that in spite of managements memorandum, the keys to the office and filing cabinets were not surrendered. It was likewise stated in the report that Wilfredo Baron pulled out some records without allowing a representative from the audit team to inspect them. He noticed Wilfredo Baron deleting some files from the computer which could no longer be retrieved. Moreover, Armida Que, a member of the audit team, saw petitioner Cynthia Junatas

carrying some documents, including a Daily Collection Report. When asked to present the documents for inspection, Junatas refused and tore the document. In addition, the audit team discovered that MSI incurred an inventory shortage of One Million Thirty Thousand Two Hundred Fifty-Eight Pesos and Twenty-One Centavos (P1,030,258.21). It found that Wilfredo Baron, the operations manager, in conspiracy with the other petitioners, orchestrated massive irregularities and grand scale fraud, which could no longer be documented because of theft of company documents and deletion of computer files. Unmistakably, the unauthorized taking of company documents and files, failure to pay unremitted collections, failure to surrender keys to the filing cabinets despite earlier instructions, concealment of shortages, and failure to record inventory transactions pursuant to a fraudulent scheme are acts of grave misconduct, which are sufficient causes for petitioners dismissal from employment. They are also grounds for loss of trust and confidence under Article 282 of the Labor Code, as amended. For there to be a valid dismissal based on loss of trust and confidence, the breach of trust must be willful, meaning it must be done intentionally, knowingly, and purposely, without 32 justifiable excuse. The basic premise for dismissal on the ground of loss of confidence is that the employees concerned hold a position of trust and confidence. It is the breach of this trust that results in the employers loss of confidence in the employee. In the instant ca se, we note that petitioners were holding the following positions: Wilfredo Baron - operations manager, Jomar dela Rosa and Jefferson dela Rosa - sales representatives, Cynthia Junatas and Marife Ballesca accounting clerks, and Lourdes Rabago - warehouse checker. Clearly, petitioners were holding positions imbued with trust and confidence, which are deemed to have been reposed on them by virtue of the nature of their work. All given, we affirm the conclusion of the NLRC and appellate court that petitioners Wilfredo Baron, Jomar dela Rosa, Jefferson dela Rosa, Cynthia Junatas, Marife Ballesca and Lourdes Rabago were dismissed for just causes. Meanwhile, petitioners Aristeo Puzon, Dominador Gemino, Bernard Mangsat, Barry Anthony Baron and Ramil Cayago failed to prove by substantial evidence the existence of an employer-employee relationship between them and MSI. In fact, they admitted that they were probationary employees of Superb Trading and Services, Inc. (STSI), and not of MSI. It must also be stressed that the connection between MSI and STSI was not proven. Thus, having no cause of action against MSI, the Court of Appeals correctly upheld the NLRC in dismissing their complaints. On the procedural aspect, petitioners claim that they were denied due process. We disagree. In the dismissal of employees, it has been consistently held that the twin requirements of notice and hearing are essential elements of due process. The employer must furnish the worker with two written notices before termination of employment can be legally effected: (1) a notice apprising the employee of the particular acts or omissions for which his dismissal is sought, and (2) a subsequent notice informing the employee of the employers decision to dismiss him. With regard to the requirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and 33 not that an actual hearing should always and indispensably be held. Likewise, there is no requirement that the notices of dismissal themselves be couched in the form and language of judicial or quasi-judicial decisions. What is required is that the employer conduct a formal investigation process, with notices duly served on the employees informing them of the fact 34 of investigation, and subsequently, if warranted, a separate notice of dismissal. Through the formal investigatory process, the employee must be accorded the right to present his or her side, which must be considered and weighed by the employer. The employee must be sufficiently

apprised of the nature of the charge, so as to be able to intelligently defend himself or herself against the charges.1avvphi1 In this case, records show that respondents complied with the two-notice rule prescribed in Article 277(b) of theLabor Code, as amended. Petitioners were given all avenues to present their side and disprove the allegations of respondents. Thus, we agree with the Court of Appeals when it held: On various dates, two [2] separate notices were given the employees. In the first notice, the acts imputed against them were enumerated with a call for an investigation, while the second notice contained MSIs decision terminating them after they failed to respond to the first notice. Thus, the employees inaction is attributable to them. Due process is not violated where a person is given the opportunity to be heard but chooses not to give his side of the case (Caurdanetaan Piece Workers 35 Union vs. Laguesma, 286 SCRA 401). Evidence shows that petitioners were properly notified of the charges against them. They received 36 letters signed by Jose Y. Sy instructing them to explain within seventy-two (72) hours from receipt why they should not be dismissed for their offenses. They were likewise warned that failure to reply would mean that they were waiving their right to present evidence in their favor. Furthermore, petitioners were afforded the chance to defend themselves during the scheduled investigation on April 12, 2000. Given the foregoing, it is clear that the required procedural due process for their termination was strictly complied with. When parties have been given an opportunity to be heard 37 and to present their case, there is no denial of due process. WHEREFORE, the petition is DENIED. The Decision dated August 31, 2007 and the Resolution dated March 6, 2008 of the Court of Appeals in CA-G.R. SP No. 78925 are AFFIRMED and UPHELD. With costs against the petitioners. SO ORDERED. G.R. No. 172506 July 27, 2011

Factual Antecedents Respondent Natividad P. Nisce (Nisce) is the President of respondent Philippine Rabbit Bus Lines, Inc. (PRBLI), an entity engaged in the transportation business. On April 7, 1993, PRBLI hired petitioner as bus conductor with a salary of P510.00 per trip. On October 7, 2001, while on duty en route from Manila to Alaminos, Pangasinan, petitioner was caught by PRBLIs field inspector extending a free ride to a lady passenger who boarded at Barangay Magtaking, Labrador, Pangasinan. Upon order of the field inspector, the lady passenger, who happened to be the wife of Julio Ricardo, petitioners co-employee and one of PRBLIs drivers, was immediately issued a 6 passenger ticket for which she paid P50.00. On October 9, 2001, petitioner was preventively suspended and was directed to appear in an 7 administrative investigation. Thereafter, a formal hearing was conducted during which petitioner was given an opportunity to present and explain his side. Consequently, through a 8 memorandum dated November 9, 2001, petitioner was terminated from employment for committing a serious irregularity by extending a free ride to a passenger in violation of company rules. Notably, that was already the third time that petitioner committed said violation. On February 19, 2002, petitioner filed with the NLRC a Complaint for illegal dismissal against PRBLI, Nisce, and Ricardo Paras (Paras), PRBLIs General Manager. Parties Respective Arguments Petitioner alleged that his employment was terminated without cause and due process. He argued that the infraction was only trivial. It was done without malice and resulted from his honest belief that immediate family members of PRBLIs employees are entitled to free ride. He argued that his two previous violations of the same company regulation cannot be considered in the imposition of the penalty of dismissal since those previous infractions were not too serious. The first involved a police officer supposedly on official duty who refused to pay for a passenger ticket, while the second involved a former employee of PRBLI who misrepresented himself to be a current employee by virtue of a company ID duly presented. Moreover, he has already been penalized for these previous violations and to consider them anew would be tantamount to penalizing him twice for the same offense. Under these circumstances and considering further his length of service, petitioner advanced that his violations are not sufficient to merit the penalty of dismissal. Petitioner thus prayed that his dismissal be declared illegal and that he be awarded separation pay in lieu of reinstatement, backwages, 13th month pay, damages, attorneys fees and refund of cash bond in the amount of P5,000.00. Respondents argued that petitioners admissions during the investigation that he indeed offered a free ride out of gratitude to the wife of his co-employee and that it was his third offense, justified his termination considering that his position is imbued with trust and confidence. They claimed that petitioners failure to collect fares from the riding public, coupled with his past record of serious offenses ranging from non-issuance, improper passenger tickets to collecting fares without issuing tickets, and allowing passengers to board without fare coupons, for which different penalties have been imposed against him, are grounds for valid dismissal. Respondents also argued that due process was observed when petitioner was accorded a chance to defend himself in an investigation conducted for that purpose. Respondents further disclaimed bad faith, malice, and liability to petitioners money claims. Ruling of the Labor Arbiter
9

JERRY MAPILI, Petitioner, vs. PHILIPPINE RABBIT BUS LINES, INC./NATIVIDAD NISCE, Respondents. DECISION DEL CASTILLO, J.: An employees propensity to commit repetitious infractions evinces wrongful intent, making him undeserving of the compassion accorded by law to labor. This Petition for Review on Certiorari assails the Decision dated January 16, 2006 and 3 Resolution dated April 6, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 89733, which 4 5 affirmed the Decision dated November 25, 2004 and Resolution dated February 28, 2005 of the National Labor Relations Commission (NLRC) finding petitioner Jerry Mapili (petitioner) to have been dismissed for cause.
1 2

In a Decision dated July 2, 2003, the Labor Arbiter held that petitioner had no intention to defraud the company by his failure to issue a ticket to the wife of a co-employee as the same was done out of gratitude and under the wrong impression that she is entitled to such privilege. Besides, the amount of the fare was subsequently collected from and paid by the passenger. The Labor Arbiter opined that petitioners actuations merited a less punitive penalty such as suspension of 30 days which he already served during his preventive suspension. The Labor Arbiter also found that petitioner was not denied due process since he was given the opportunity to present his side. As regards Nisce and Paras, the Labor Arbiter held that they cannot be held personally liable for lack of bad faith on their part. The dispositive portion of said Decision reads: PREMISES CONSIDERED, judgment is hereby rendered declaring complainant Jerry B. Mapili to have been illegally dismissed from employment. Respondent Philippine Rabbit Bus Lines, Inc. is hereby ordered to reinstate complainant to his former position or to a similar one without loss of seniority rights and pay him the following: a.) Backwages amounting to Php271,320.00; b.) 13th month pay of Php24,650.00; c.) Php5,000.00 as refund of bond. All in the total amount of Php300,970.00. A detailed computation is attached as Annex A. SO ORDERED.
11

10

Ruling of the Court of Appeals Petitioner filed with the CA a petition for certiorari. The CA, in its Decision dated January 16, 2006, however, found no grave abuse of discretion on the part of the NLRC in ruling that petitioner was validly dismissed. The CA agreed that petitioner has a history of committing violations of company rules, the last one being a repeat violation against extending free rides to passengers. This infraction is considered as a grave offense and serious misconduct which merits the penalty of dismissal. The CA also agreed that there was intent to cheat the company of its funds. Petitioners Motion for Reconsideration 2006. Hence, the instant petition. Issues Petitioner raised the following grounds: I. THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN NOT HOLDING THAT DISMISSAL FROM EMPLOYMENT IS NOT [A COMMENSURATE] PENALTY [FOR] THE INFRACTION COMMITTED AS A MERE ERROR IN JUDGMENT, SUCH AS PETITIONERS ACT OF EXTENDING A FREE BUS RIDE TO THE COEMPLOYEE BUS DRIVERS WIFE ON THE HONEST BELIEF THAT AN IMMEDIATE FAMILY MEMBER OF AN EMPLOYEE IN THE COMPANY IS ENTITLED TO A FREE RIDE; II.
18 16 17

was likewise denied in the CA Resolution

19

dated April 6,

Ruling of the National Labor Relations Commission The NLRC, in a Decision dated November 25, 2004 set aside the findings of the Labor Arbiter upon appeal by respondents. It found that the non-issuance of a ticket to the lady passenger and failure to collect money due to the company was a deliberate and intentional act of petitioner which prejudiced the companys interests. In ruling that petitioners dismissal was for just cause, the NLRC opined that petitioners past record of committing several acts of misconduct and his propensity to commit similar infractions do not merit the compassion of law. Thus, the NLRC disposed of the case as follows: WHEREFORE, premises considered, the decision under review is hereby, REVERSED and SET ASIDE, and another entered in its stead, DISMISSING the complaint for lack of merit. Respondents are, however, ordered to refund complainants cash bond in the amount of FIVE THOUSAND PESOS (P5,000.00), and his proportionate 13th month pay for the year 2001 in the amount of ELEVEN THOUSAND THREE HUNDRED NINETY Pesos (P11,390.00), or a total amount of SIXTEEN THOUSAND THREE HUNDRED NINETY Pesos (P16,390.00). SO ORDERED.
13 12

THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN EQUATING AS PROOF RESPONDENTS MERE ALLEGATIONS OF VARIOUS PAST INFRACTIONS AGAINST YOUR PETITIONER; and III. THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN NOT HOLDING THAT THE PAST TWO SIMILAR INFRACTIONS [FOR] WHICH AN EMPLOYEE HAS ALREADY SUFFERED THE CORRESPONDING PENALTY OF WARNING AND SUSPENSION, CANNOT BE USED AS X X X JUSTIFICATION[S] FOR 20 THE EMPLOYEES DISMISSAL FROM SERVICE. Petitioner asserts that the penalty of dismissal is grossly disproportionate to the infraction he committed because his act of extending a free ride was not deliberate but was done on a wrong assumption that immediate family members of company employees are entitled to free rides. He insists that his past infractions, unsupported by proof, and his previous two offenses of not issuing fare tickets to a police officer and former company employee cannot be used as bases for his termination considering that his actuations for the latter offenses were justified under the

Petitioner filed his Motion for Reconsideration 15 Resolution dated February 28, 2005.

14

which was denied by the NLRC in a

circumstances and that he was already penalized for all these past violations. It is petitioners view that his infraction merits only a 30-day suspension, as imposed by the Labor Arbiter. Our Ruling We deny the petition. Petitioners violation of company rules was intentional, willful, serious and a just cause for dismissal. Petitioner assails the CAs finding that petitioners non -issuance of a passenger ticket to the lady passenger is a grave offense, that it was committed with deliberate intent and a repeat violation of a company rule which merits dismissal. Petitioner insists that his infraction was merely trivial because he was under the impression that immediate family members of employees are entitled to free ride. 21 Petitioner cites Section 13, Article VIII of the Collective Bargaining Agreement which provides: Section 13. Free Ride and Passes - All employees covered by this Agreement shall be provided a free ride in all units of Philippine Rabbit Bus Line, Inc. as presently practiced. However, members of his/her immediate family shall be given passes upon request to the COMPANY. Petitioner insists that his act of extending a free ride is in accordance with the aforequoted provision and the fact that he may have overlooked the requirement of passes with respect to immediate family members is not so serious as to characterize the offense he committed to have been performed with malicious intent. We are not persuaded. The above provision is clear and unequivocal that free rides are available only to employees of PRBLI. The benefit is not automatically extended to members of the employees immediate family as passes must first be requested for them. Petitioner should be conversant of this provision considering his previous infractions of this same provision for which he was duly penalized. Besides, petitioners claim of good faith is belied by his testimony to the effect that he extended a free ride out of gratitude to the wife of a co-employee who assisted him in his financial troubles. During the administrative investigation conducted on October 15, 2001, petitioner narrated thus: Q-9 Why on October 07 you [gave] a free ride to the wife of Driver Ricardo? A-9 I did this because I want to pay my gratitude to her, sir. Q-10 What are your gratitude/s to the woman? A-10 Many times she [helped] me in my problem especially in financial, sir. Q-11 Why [do] you need to pay your gratitude [at] the expense of the company? A-11 For what I have done compel [sic] myself to do. Napasubo lang po ako. I admit this is a grave offense against the company. Whatever suspension that you may impose to [sic] 22 me I am ready to accept, sir.

Based on this testimony, it is quite apparent that petitioner was aware that the infraction he committed constituted a grave offense but he still persisted in committing the same out of gratitude to the passenger. Hence, as correctly found by the CA, there was deliberate intent on the part of the petitioner to commit the violation in order to repay a personal debt at the expense of the company. Petitioner chose to violate company rules for his benefit without regard to his responsibilities to the company. Also, if not for the inspector who discovered the incident, the company would have been defrauded by the amount of fare. It bears stressing that petitioner has been in the employ of PRBLI for more than eight years already and is a member of the companys labor union. As such, he ought to know the specific company rules pertaining to his line of work as a bus conductor. For that matter, his length of service has even aggravated the resulting consequences of his transgressions. In addition, on April 8, 1994 and May 3, 1995, he committed similar infractions of extending free ride to a police officer and a former employee, respectively. These had been brought to the attention of the petitioner and for which the penalties of relief from duty and suspension were meted out upon 23 him. Hence, he ought to have known better than to repeat the same violation as he is presumed to be thoroughly acquainted with the prohibitions and restrictions against extending free rides. We also cannot agree with petitioners contention that his infraction was trivial. As a bus conductor whose duties primarily include the collection of transportation fares, which is the lifeblood of the PRBLI, petitioner should have exercised the required diligence in the performance thereof and his habitual failure to exercise the same cannot be taken for granted. As correctly observed by the CA, petitioners position is imbued with trust and confidence because it involves handling of money and failure to collect the proper fare from the riding public constitutes a grave offense which justifies his dismissal. Moreover, petitioners "series of irregularities when put together may constitute serious 24 misconduct." Petitioners record of offenses of the same nature as his present infraction justifies his dismissal. Petitioners past infractions can be gleaned from his employment record of offenses which was presented by the respondents. This piece of evidence was not disputed by petitioner. Hence, petitioner cannot claim that the finding of his past company infractions was based merely on allegations. As petitioners employment record shows, this is not the first time that petitioner refused to collect fares from passengers. In fact, this is already the third instance that he failed to collect fares from the riding public. Although petitioner already suffered the corresponding penalties for his past misconduct, those infractions are still relevant and may be considered in 25 assessing his liability for his present infraction. We thus held in Philippine Rabbit Bus Lines, Inc. v. 26 National Labor Relations Commission that: Nor can it be plausibly argued that because the offenses were already given the appropriate sanctions, they cannot be taken against him. They are relevant in assessing private respondents liability for the present violation for the purpose of determining the appropriate penalty. To sustain private respondents argument that the past violation should not be considered is to disregard the warnings previously issued to him.1avvphi1 As suspension may not anymore suffice as penalty for the violation done as shown by petitioners disregard of previous warnings and propensity to commit the same infraction over the years of his

employment, and to deter other employees who may be wont to violate the same company policy, petitioners termination from employment is only proper. WHEREFORE, the petition is DENIED. The Decision dated January 16, 2006 and Resolution dated April 6, 2006 of the Court of Appeals in CA-G.R. SP No. 89733 are AFFIRMED. SO ORDERED.