3rd Batch -Labor Relations

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G.R. NO. 160339 March 14, 2008

OSCAR P. GARCIA and ALEX V. MORALES,Petitioners,vs.MALAYAN INSURANCE CO., INC. and NATIONAL LABOR RELATIONSCOMMISSION,

*Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ,J.:

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court of Oscar P.Garcia and Alex V. Morales (petitioners), assailing the March 13, 2003 Decision1of the Court of

Appeals (CA), which

upheld the validity of the termination of their employment; and the October 9, 2003 CAResolution

2which denied their motion for reconsideration.

The facts are of record.

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

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

3giving 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 withadditional instruction for his preventive suspension for 30 days pending investigation.

4

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

5

After the conduct of an informal administrative hearing,6private 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, theInvestigating Committee concluded that there is reason to believe that you participated in the theftof the subject Company properties when you:

1) Took possession of the subject diskettes and logbooks without any permission from thecompany;

2) Instigated the commission of the said unlawful act; and

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

The above acts constitute serious misconduct and a violation of the Companys Code of Ethwhich, under Article 282 of the Labor Code, as amended, justify your dismissal from the CoIn view thereof, we regret to inform you that you are considered dismissed from your employeffective immediately.

7

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

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

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

2) Deliberately withheld information from the Company regarding the whereaboutsCompany properties .

A review of your 201 File likewise revealed that you have been previously suspended for tareceipts which you presented for reimbursement by the Company. You will therefore realizewhen it comes to dishonesty, you are no t a first offender.

The above recent acts constitute serious misconduct and violation of the Companys Code owhich, under Article 282 of the Labor Code, as amended, justify your dismissal from the CoIn view thereof, we regret to inform you that you are considered dismissed from your employeffective immediately.

8

Petitioners filed before the Labor Arbiter (LA) a Complaint for illegal dismissal, illegal suspenunfair labor practice, damages and attorneys fees.

9The LA dismissed their Complaint in a

Decision10

dated November 20, 2000.

Petitioners appealed to the National Labor Relations Commission (NLRC), which issued aResolution

11dated November 29, 2001, affirming the November 20, 2000 LA Decision. The

also denied petitioners Motion for Reconsideration in a Resolution12

dated February 28, 20

Petitioners filed a Petition for Certiorariwith the CA, which dismissed it in the March 13, 200Decision

13assailed herein. Petitioners Motion for Reconsideration was also denied by the C

October 9, 2003 Resolution.

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

I

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

While the public respondent court is totally correct in declaring that " factual findings of theNLRC, 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 NLRCand the Labor Arbiter a quoseriously erred and committed grave abuse of d iscretion inrendering the assailed resolution, as clearly private respondent company acted with badfaith in terminating the services of herein petitioners.

IV

The public respondent court committed grave abuse of discretion amounting to lack and/orexcess of jurisdiction in denying petitioners' motion for reconsideration without resolvingthe legal issues raised.

14

Resolution of the foregoing issues entails an inquiry into the facts, a re-evaluation of the credibilityof the witnesses and a recalibration of the evidence presented. Ordinarily, the Court does notundertake these functions, for it defers to the expertise of the CA, NLRC and LA, and accords greatweight to their factual findings, especially when these are una nimous. Thus, only their errors of laware reviewable by the Court in a petition for review on certiorariunder Rule 45.

However, under extraordinary circumstances, the Court delves into the factual assessment of the

forums below when it is shown that (1) t he findings are not supported by evidence; (2) when theinference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse ofdiscretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings o ffact are conflicting; (6) when in making its findings, the CA went beyond the issues of the case, o rits findings are contrary to the admissions of both the appellant and the appellee; (7) when thefindings are contrary to the trial court; (8) when the findings are conclusions without citation ofspecific evidence on which they are based; (9) when the facts set forth in the petition as well as inthe petitioner's reply briefs are not disputed by the respondent; and (10) when the findings of factare premised on the supposed absence of evidence and contradicted by the evidence on record.

15

To determine whether any of these extraordinary circumstances obtains in the present case, apreliminary assessment of the evidence upon which the CA, NLRC and LA based their factualfindings 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 petitionerMorales participated in the cover-up thereof:

In the case at ba r, 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 causefor the dismissal of an employee. Their statements explain the questioned incident in its entiretyfrom 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 diskand logbooks (Umila), up to the attempt to cover-up their misconduct (De Guzman). [Petitionfailed to adduce any evidence that would taint the credibility of said witnesses. It goes againusual grain of logic and normal human conduct for a witness to testify against a co-Union meor co-employee, absent any clear evil or ill-motive on his/her part, thus demonstrating that switness is moved only by the desire to tell t he truth and clear his conscience. There be ing nindicate that the witnesses were moved by dubious or improper motives to testify falsely, thetestimonies should be accorded full faith and credit.

Tellingly, [petitioner] Garcia never denied, much less refuted, Umila's positive testimony tha(Garcia) admitted that he has in his possession the missing diskettes and logbooks. The samholds 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 wrongdoi[petitioner] Garcia.16

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

by the latter.17

The NLRC found these witnesses credible because they were not shown to h"grudge against [petitioners], much more because said witnesses are ordinary members of 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 oand NLRC for it found them to be supported by evidence.

19

Impugning the stand of the CA, petitioners argue that the affidavits of Umila and De Guzma

no probative value for neither had direct knowledge of the taking of private respondent's profirst, Umila merely stated that on December 24, 1998, petitioner Garcia and another employBato, asked about these p roperties and that she told them that said properties were on top office table; and second, De Guzman merely described how these properties were recovere

Perusal of the affidavits in question does not bear out petitioners' claim. Umila also stated thshe confronted petitioner Garcia about the lost properties, the latter admitted having them inpossession.

21De Guzman's statement detailed the effort to bring said properties back into t

premises of private respondent and to make it appear that these were merely misplaced .22

without going into the veracity of the statements in said affidavits, the Court cannot agree thdirect evidence was presented on the theft of the properties or the cover-up the reof.

However, it is noted that while the participation of petitioner Garcia in said theft and cover-updetailed in said affidavit, the same cannot be said of the connection of Morales to said incidrecall, petitioner Morales was dismissed for conspiring in the cover-up of the theft. However

appears that the only evidence of petitioner Morales's involvement in the cover-up is the staof De Guzman that it was said pe titioner who instructed him to get a parcel from a third persstatement 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.may kasalukuyang naghuhugas ng mga plato sa Comfort Room ng 5th floor ng ETY Building ako ay lapitan ni Alex Morales ng Risk Analysis Department at inutusang pumunta sa FarmRubi, dito rin sa Quintin Paredes, Binondo para kunin ang isang bagay sa lalaking may bigo
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By no means can it be extrapolated from the foregoing statement that petitioner Morales knew thecontents of the parcel - whether or not these were the stolen company properties - or the purposefor getting the parcel from a third party. In fact, the succeeding paragraphs in the statement disclosethat 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 tobring 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 hadparticipation in it. It is difficult then to c onnect petitioner Morales to the theft or the attempt to cover itup 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 DeGuzman so lacking in crucial detail that the same cannot serve as basis for the finding that said

petitioner conspired in the theft

of private respondent's properties or the cover up thereof.24

The Court reverses the factual findingsof the CA, NLRC and LA, for the evidence on which their findings were based was too tenuous tojustify the termination of petitioner Morales's employment.

Nonetheless, no bad faith can be attributed to private respondent in dismissing petitioner Moralesdespite such scant evidence. Its error in the assessment of the available evidence cannot beequated 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 laborpractice.

Moving on to the other issues pertaining to petitioner Garcia, he insists that, contrary to theobservation of the CA, he controverted the affidavits presented by private respondent, not only bydenying the averments therein, but also by presenting counter evidence consisting of an entry in the

guard's logbook and the affidavit of the guard-on-duty, Joey Limbo.

25

Petitioner explains that it tooktime for him to present these documents, because private respondent had tried to conceal them andwas compelled to present the same be fore the LA

26only when he (petitioner Garcia) demanded to

see them.27

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

28The

affidavit of Joey Limbo merely repeated the logbook entry .29

That these documents do not discloseany further detail is understandable, for as explained by De Guzman himself in his affidavit, hemerely reported the recovery of the stolen properties to Joey Limbo and did not elaborate on thecircumstances thereof, but when he was confronted by p rivate respondent the following day, it wasthen that he divulged the details leading to the recovery of said properties.

30

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

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

31

It is oft repeated that in administrative proceedings, due process is served by the mere fact thateach party is afforded an opportunity to air its side ,

32not necessarily through verbal argumentation,

but also through pleadings in which the parties may explain their side of the controversy. 33

record that petitioners were informed of the charges against them and were given the op popresent their defense, not just in the administrative investigation, but also in the proceedingsthe 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 o f theNLRC and LA that petitioner Garcia was involved in the theft of respondent's properties andattempt to cover up said act for the same are supported by substantial evidence.

However, the Court finds scant evidence to connect pe titioner Morales to the theft or its covand 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 October 9, 2003 Resolution of the Court of Appeals are AFFIRMEDinsofar as they sustainedismissal of the complaint of petitioner Oscar Garcia; and REVERSED andSET ASIDEinsthey sustained the dismissal of the complaint of petitioner Alex Morales. The complaint for thdismissal of Alex Morales is GRANTED. His immediate reinstatement with backwages is or

No costs.

SO ORDERED.

G.R. No. 173151 March 28, 2008

EDUARDO BUGHAW, JR.,Petitioner,vs.

TREASURE ISLAND INDUSTRIAL CORPORATION,Respondent.

D E C I S I O N

CHICO-NAZARIO,J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules oCourt,filed by petitioner Eduardo Bughaw, Jr., seeking to reverse and set aside theDecision,

1dated 14 June 2005 and the Resolution,

2dated 8 May 2006 of the Court of Appe

CA-G.R. SP No. 85498. The appellate court reversed the Decision dated 28 August 2003 aResolution dated 27 February 2004 of the National Labor Relations Commission (NLRC) in Case No. V-000231-02 that found t he petitioner to be illegally dismissed from employment brespondent Treasure Island Industrial Corporation. The dispositive portion of the assailed apcourts Decision thus reads:

WHEREFORE, discussion considered, the decision dated August 28, 2003 of the National LRelations Commission, Fourth Division, Cebu City, in NLRC Case No. V-000231-02 (RAB V1171-01), is hereby VACATED and SET ASIDE en toto.

The award of money claims to [herein petitioner] is NULLIFIED and RECALLED.3

The factual and procedural antecedents of the instant Petition are as follows:
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Sometime in March 1986, petitioner was employed as production worker by respondent.Respondent was receiving information that many of its employees were using prohibited drugsduring working hours and within the company premises.

4

On 5 June 2001, one of its employees, Erlito Loberanes (Loberanes) was caught in flagrante delictoby the police officers while in possession of shabu. Loberanes was arrested and sent to jail. In thecourse of police investigation, Loberanes admitted the commission of the crime. He implicatedpetitioner in the crime by claiming that part of the money used for buying the illegal drugs was givenby the latter, and the illegal drugs purchased were for their consumption for the rest of the month.

5

In view of Loberaness statement, respondent, on 29 June 2001, served a Memo for Explanation6to

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 toappear at the office of respondents legal counsel on 16 June 2001 at 9:00 oclock in the morningfor the hearing on the matter. For the meantime, petitioner was placed under preventive suspensionfor the period of 30 days effective upon receipt of the Notice.

Notwithstanding said Memo, petitioner failed to appear before the respondents legal counsel on thescheduled hearing date and to explain his side on the matter.

On 19 July 2001, respondent, through legal counsel, sent a second letter7to petitioner directing him

to attend another administrative hearing scheduled on 23 July 2001 at 11:00 oclock in the morningat said legal counsels office but petitioner once again failed to show up.

Consequently, respondent, in a third letter8dated 21 August 2001 addressed to petitioner,

terminated the latters employment retroactive to 11 June 2001 for using illegal drugs withincompany 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 complaint9for illegal dismissal against respondent and its

President, Emmanuel Ong, before the Labor Arbiter. Petitioner alleged that he had been working forthe respondent for 15 years and he was very conscientious with his job. He was suspended for 30days on 11 June 2001 based on the unfounded allegation of his co-worker that he used illegal drugswithin company premises. When petitioner reported back to work after the expiration of hissuspension, he was no longer allowed by respondent t o enter the work premises and was told not toreport back to work.

On 8 January 2002, the Labor Arbiter rendered a Decision10

in favor of petitioner since therespondent failed to present substantial evidence to establish the charge leveled against thepetitioner. Apart from Loberaness statements on petitioners alleged illegal drug use, no othercorroborating proof was offered by respondent to justify petitioners dismissal. Further, respondentfailed to comply with due process when it immediately suspended petitioner and eventually

dismissed him from employment. Petitioners immediate suspension was not justified since noevidence was submitted by the respondent to establish that petitioners continued employmentpending investigation poses a serious and imminent threat to respondents life or property or to thelife or property of petitioners co-workers. Finally, the Labor Arbiter observed that the notices ofhearing sent by respondent to petitioner were not duly received by the latter. The Labor Arbiter wasnot swayed by respondents explanation that the reason therefor was that petitioner refused toreceive said notices. The Labor Arbiter thus ruled:

WHEREFORE, premises considered, judgment is hereby rendered ordering [herein respondpay [herein petitioner] the following:

1. Separation pay P 74,100.00

2. Backwages P 27,550.00

3. Unpaid wages P 4,940.00

TotalP 106,590.00

The case against respondent Emmanuel Ong is dismissed for lack of merit.11

On appeal, the NLRC affirmed the Labor Arbiters Decision in its Decision dated 28 August 2The NLRC decreed that respondent failed to accord due process to petitioner when it dismisfrom employment. The use of illegal drugs can be a valid ground for terminating employmenit is proven true. An accusation of illegal drug use, standing alone, without any proof or evidpresented in support thereof, would just remain an accusation .

12

The Motion for Reconsideration filed by respondent was denied by the NLRC in aResolution

13dated 27 February 2004.

Resolving respondents Petition for Certiorari, the Court of Appeals reversed the Decisions Labor Arbiter and NLRC on the grounds of patent misappreciation of evidence and misapplilaw. The appellate court found that petitioner was afforded the opportunity to explain and de

himself from the accusations against him when respondents gave him notices of hearing, bupetitioner repeatedly ignored them, opting instead to file an illegal dismissal case againstrespondent before the Labor Arbiter. The essence of due process in administrative proceedsimply an opportunity to explain ones side or to seek reconsideration of the action or rulingcomplained of. Due process is not violated where one is given the opportunity to be heard bchooses not to explain his side.

14

Similarly ill-fated was petitioners Motion for Reconsideration which was denied by the CourAppeals in its Resolution

15dated 8 May 2006.

Hence, this instant Petition for Review on Certiorari16

under Rule 45 of the Revised Rules ofCourtfiled by petitioner impugning the foregoing Court of Appea ls Decision and Resolution,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 Courtsof review, the Court is not a trier of facts

17and does not routinely undertake the reexaminati

the evidence presented by the contending parties during the trial of the case considering thafindings of facts of labor officials who are deemed to have acquired expertise in matters withrespective jurisdiction are generally accorded not only respect, but even finality, and a re binupon this Court,

18when supported by substantial evidence.

19
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The Labor Arbiter and the NLRC both ruled tha t petitioner was illegally dismissed from employmentand ordered the payment of his unpaid wages, backwages, and separation pay, while the Court ofAppeals 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 evidencessubmitted by the parties. It is, thus, incumbent upon us to determine whether there is substantialevidence to support the finding of the Labor Arbiter and the NLRC that petitioner was illegallydismissed. Substantial evidence is such amount of relevant evidence which a reasonable mindmight accept as adequate to support a conclusion, even if other equally reasonable minds mightconceivably opine otherwise.

20

Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold, thesubstantive and the procedural aspects. Not only must the dismissal be for a just

21or authorized

cause,22

the rudimentary requirements of due process - notice and hearing23

must, likewise, beobserved before an employee may be dismissed. Without the concurrence of the two, thetermination would, in the eyes of the law, be illegal ,

24for employment is a property right of which

one cannot be deprived of without due process.25

Hence, the two (2) facets of a valid termination of employment are: (a) the legality of the act ofdismissal, i.e., the dismissal must be under any o f the just causes provided under Article 282 of theLabor Code; and (b) the legality of the manner of dismissal, which means that there must beobservance of the requirements of due p rocess, otherwise known as the two-notice rule.

26

Article 282 of the Labor Code enumerates the just causes for terminating the services of anemployee:

ART. 282. Termination by employer. - An employer may terminate an employment for any of thefollowing causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of hisemployer 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 orhis duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employeror 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 againstpetitioner 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 definiterule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intentand not merely an error in judgment. The misconduct to be serious within the meaning o f the Actmust be of such a grave and aggravated character and not merely trivial or unimportant. Suchmisconduct, however serious, must nevertheless, in connection with the work of the employee,constitute just cause for his separation.

27This 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 poserious 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 consithe respondent against the petitioner. Petitioner failed to controvert Loberanes claim that hewas using illegal drugs. Records reveal that respondent gave petitioner a first notice dated 12001, giving him 120 hours within which to explain and defend himself from the charge agaand to attend the administrative hearing scheduled on 16 June 2001. There is no dispute thpetitioner received said notice as evidenced by his signature appearing on the lower left porcopy thereof together with the date and time of his receipt .

28He also admitted receipt of the

notice in his Memorandum before this Court.29

Despite his receipt of the notice, however, pedid not submit any written explanation on the charge against him, even after the lapse of theday period given him. Neither did petitioner appear in the scheduled administrative hearing personally present his side. Thus, the respondent cannot be faulted for considering only theevidence at hand, which was Loberanes statement, and conclude therefrom that there wascause 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 againspetitioner] claiming that the statement of Loberanes is legally infirm as it was an admission munder custodial investigation; and there has been no corroborating evidence. In administratiproceedings, technical rules of procedure and evidence are not strictly applied and administdue process cannot be fully equated with due process in its strict judicial sense. Xxx It is sufthat [herein petitioner] was implicated in the use of illegal drugs and, more importantly, therecounter-statement from [herein petitioner] despite opportunities granted to h im submit to aninvestigation.

30

It was by petitioners own omission and inaction that he was not able to present evidence tothe charge against him.

Now we proceed to judge whether the manner of petitioners dismissal was legal; stated othwhether petitioner was accorded procedural due process.

In Pastor Austria v. National Labor Relations Commission,31

the Court underscored the signof the two-notice rule in dismissing an employee:

The first notice, which may be considered as the proper charge, serves to apprise the empthe particular acts or omissions for which his dismissal is sought. The second noticeon thehand seeks to inform the employee of the employers decision to dismiss him. This decisionhowever, must come only after the employee is given a reasonable period from receipt of thnotice within which to answer the charge and ample opportunity to be heard and defend him

the assistance of a representative if he so desires. This is in consonance with the express pof the law on the protection to labor and the broader dictates of procedural due process. Nocompliance therewith is fatal because these requirements are conditions sine qua non befordismissal may be validly effected. (Emphases supplied.)

While there is no dispute that respondent fully complied with the first-notice requirement apppetitioner of the cause of h is impending termination and giving him the opportunity to explaiside, we find that it failed to satisfy the need for a second no tice informing petitioner that he being dismissed from employment.
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We cannot give credence to respondents allegation that the petitioner refused to receive the thirdletter dated 21 August 2001 which served as the notice of termination. There is nothing on recordthat would indicate that respondent even attempted to serve or tender the notice of termination topetitioner.1avvphi1No affidavit of service was appended to the said notice attesting to the reasonfor failure of service upon its intended recipient. Neither was there any note to that effect by theserver written on the notice itself.

The law mandates that it is incumbent upon the employer to prove the validity of the termination ofemployment.

32Failure to discharge this evidentiary burden would necessarily mean that the

dismissal was not justified and, therefore, illegal.33

Unsubstantiated claims as to alleged compliancewith the mandatory provisions of law cannot be favored by this Court. In case of doubt, such casesshould be resolved in favor of labor, pursuant to the social justice policy of our labor laws andConstitution.

34

The burden therefore is on respondent to present clear and unmistakable proof that petitioner wasduly served a copy of the notice of termination but he refused receipt. Bare and vague allegationsas to the manner of service and the circumstances surrounding the same would not suffice. A merecopy 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 toconvince even an unreasonable mind.

We cannot overemphasize the importance of the requirement on the notice of termination, for wehave ruled in a number of cases

35that 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 LaborRelations Commission,36

we found that the dismissal of the employees therein was for valid and justcause because their abandonment of their work was firmly established. Nonetheless, the employertherein was held liable because it was proven that it did not comply with the twin proceduralrequirements 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 nominaldamages, thus:

The violation of the petitioners right to statutory due process by the private respondent warrants thepayment of indemnity in the form of nominal damages. The amount of such damages is addressedto the sound discretion of the court, taking into account the relevant circumstances. We believethis form of damages would serve to deter employers from future violations of the statutory dueprocess rights of employees. At the very least, it provides a vindication or recognition of thisfundamental right granted to the latter under the Labor Code and its Implementing Rules.

37

The above ruling was further clarified in Jaka Food Processing Corporation v. Pacot.38

In Jaka, the employees were terminated because the corporation was financially distressed.However, the employer failed to comply with Article 283 of the Labor Code which requires theemployer to serve a written notice upon the employees and the Department of Labor andEmployment (DOLE) at least one month befo re the intended date of te rmination. We firstdistinguished the case fromAgabon, to wit:

The difference between Agabon and the instant case is that in the former, the dismissal wason a just cause under Article 282 of the Labor Code while in the present case, respondents wdismissed due to retrenchment, which is one of the authorized causes under Article 283 of tCode.

x x x x

A dismissal for just cause under Article 282 implies that the employee concerned has commis guilty of, some violation against the emp loyer, i.e., the employee has committed some sermisconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglecteduties. 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 necessadelinquency or culpability on the part of the employee. Instead, the dismissal process is initithe employers exercise of his management prerogative, i.e., when the employer opts to instsaving devices, when he decides to cease business operations or when, as in this case, heundertakes to implement a retrenchment program.

39

Then we elucidated on our ruling in Agabonin this wise:

Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Articlethe employer failed to comply with the notice requirement, the sanction to be imposed upon should be tempered because the dismissal process was, in effect, initiated by an act imputathe employee; and (2) if the dismissal is based on an authorized cause under Article 283 buemployer failed to comply with the notice requirement, the sanction should be stiffer becausdismissal process was initiated by the employers exercise of his management prerogati ve.

4

TheAgabondoctrine enunciates the rule that if t he dismissal was for just cause but proceduprocess was not observed, the dismissal should be upheld. Where the dismissal is for just cin the instant case, the lack of statutory due process should not nullify the dismissal or rendeillegal or ineffectual. However, the employer should indemnify the employee for the violationright to procedural due process. The indemnity to be imposed should be stiffer to discourageabhorrent practice of "dismiss now, pay later," which we sought to deter in the Serrano

41rul

Agabon42

the nominal damages awarded was P30,000.00.

Conformably, the award of backwages by the Labor Arbiter and the NLRC should be deleteinstead, private respondent should be indemnified in the amount of P30,000.00 as nominaldamages.

43

WHEREFORE, premises considered, the instant Petition is DENIED. The Court of Appeals dated 14 June 2005 is hereby AFFIRMED WITH MODIFICATION in the sense that while thea valid ground for dismissal, the procedural requirements for termination as mandated by law

jurisprudence were not observed. Respondent Treasure Island Corporation is ORDEREDtoamount of P30,000.00 as nominal damages. No costs.

SO ORDERED.

G.R. No. 159302 February 6, 2008
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CITIBANK, N.A.,petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION and ROSITA TAN PARAGAS,respondents.

D E C I S I O N

CARPIO MORALES, J. :

Subject of this petition for review is the National Labor Relations Commission (NLRC) Resolutiondated October 24, 2001 g ranting the MOTION FOR PARTIAL RECONSIDERATION of respondentRosita Tan Paragas (Rosita) relative to her appeal in an illegal dismissal case, which the Court ofAppeals affirmed in toto by Decision of January 24, 2003 and Resolution of July 29, 2003.

1

Rosita was found by Labor Arbiter Geobel Bartolabac to be an employee of petitioner Citibank, N.A.for around eighteen (18) years from August 8, 1979 to September 4, 1997. At the time heremployment was terminated by petitioner for serious misconduct, willful disobedience, gross andhabitual 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 followingsalient portions of the labor arbiters Decision of June 29, 1998:

On 8 August 1979, complainant Paragas joined respondent Citibank as Secretary to thePremises Administration (up to 1981): Corporate Teller (1981-1982): Secretary to AssistantVice Presidents Ed Katigbak and Z.P. Molina (up to 1987); Secretary to Vice-President-Legal Counsel, Atty. Renato J. Fernandez (up [to] 1988); Secretary to theEmployer/Employee Relations Officer, Atty. Beatriz Alo and later to the Public AffairsDirector 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 bankdeclared certain officers and employees, or their positions/functions, redundant. Amongthese affected was complainant Paragas. However, to accommodate the union officersrequest, complainants employment was not terminated but was assigned to RecordsManagement Unit of the Quality Assurance Division as bank statement retriever, a filingclerk job described by complainant as "non-brainer job."

In the latter part of July 1994, complainant was assigned to file Universal Account OpeningForms (UAOF) in file boxes and retrieving such UAOFs from the file boxes upon internalcustomers request from time to time. In t he same month, she was also assigned toprocess or develop microfilms. However, on 20 February 1995, she complained that t heprocessing of microfilms was proving to be harmful to her health. Thus, the job wasreassigned to another clerk. Accordingly, beginning 21 February 1995, complainants job in

the bank was to file and retrieve UAOFs. x x x

x x x x

On 11 December 1996, complainant was assigned to undertake the special project ofreorganizing the UAOFs from 13 December 1996 to 15 May 1997. The work to be doneare 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 for incoming UAOFs and for future explasion [sic]

e. Labelling of all file boxes and Corporate UAOFs and their actual conten

f. Transfer of the UAOFs from the Citicenter basement to the new compacthe 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 hattention on the following, to wit:

10 January 1997

TO Rosita T. Paragas

CC: Randy J. Uson

SUBJECT: REORGANIZATION OF THE UNIVERSAL ACCOUNT OPENFORMS (UAOFs)

In connection with the Reorganization of the Universal Account Opening (UAOFs), I would like to call your attention on the following, viz:

a. Various misfiling on the reorganized UAOF file I had the reorganized filcounter-checked by your co-employees and they came out with the followmisfiling, e.g.

1. Belo, Jose; Belo, Matilde, Belo William interfiled with BELLO

2. BARRAGER, RAYMOND misfiled with BARANGAN andBARANUELO Box (BARBARO)

3. EUGENIO BARAOIDANs interfiled with BARNUEVO ANDBARRAMEDA

4. VICTOR AGIUS filed with the AGUIRREs

5. Several AGUILAs interfiled with File box ALF-ALI
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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 notacceptable. Remember a misfiled document is considered LOST and you willhave 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 ouragreement, report every Monday effective January 6, 1997. As ofFebruary 10, 1997; I have not received a single report from you.

c. Trimming/cutting of edges of attached documents like xerox copies ofIds, Passports, Drivers license, etc. I would like to reiterate my previousinstructions to do away with the trimming and cutting of attacheddocuments as it only consumes valuable time and will prolong thereorganization process. We started the reorganization last December 13,1996 and as today 10 February 1997, you are still in letter C for a tota l of163 file boxes. There are still 348 file boxes to reorganize

d. Accumulation of incoming newly received UAOFs. I have noticed thatyou have accumulated two (2) boxes full of personal UAOFs at the

basement and at the third floor. Arce and Sammy are complaining on theretrieval of these files. It is taking them more time and efforts. In themonthly meeting we had last December, 1996, interfiling incomingUAOFs is your responsibility.

In view of the above, please concentrate on the filing process and stop trimmingthe attachments. Our goal in the reorganization of the UAOFs is ACCURATEFILING so that these documents could be located when requested. I hope youexhaust all means and efforts to f inish the project within the given time frame.

Please be guided accordingly.

(Sgd.) Narciso M. FerreraAssistant Vice President

Again, on 2 April 1997, complainant received another memo from AVP Ferrera called herattention (a) to the same nine (9) cases misfiled UAOFs in Annex 16, (b) to three (3) othercases of misfiled UAOFs (c) her persistent failure to submit weekly report on the progressof 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 anodays to complete it. However, by the end of June 1997, her accomplishment was oof the total work to be done.

On 25 July 1997, AVP Ferrera directed complainant to explain in writing why heremployment should not be terminated on the ground of serious misconduct, willfuldisobedience, gross and habitual neglect of her duties and gross inefficiency.Correspondingly, complainant was placed under Preventive suspension. Complainsubmitted her written explanation on 31 July 1997.

On 29 August 1997, an administrative conference took place with the complainant,counsel and the Union President in attendance.

Finally, on 4 September 1997, the respondent bank thru AVP Ferrera notified comthat her written explanation and those which she ventilated during the administrativconference held on 29 August 1997 were found self-serving, and consequently,terminating her employment on the ground o f serious misconduct, willful disobediegross and habitual neglect of duties and gross inefficiency .

2

Following the termination of her services, respondent filed a complaint for illegal dism issal, forreinstatement, backwages, damages and attorneys fees .

3By the aforementioned De

June 29, 1998, the labor arbiter dismissed the complaint for lack of merit, finding that her dion the ground of work inefficiency was valid.

On appeal, the NLRC, by Resolution of October 24, 2000, affirmed the decision of the laborwith the modification that respondent should be paid separation pay"as a form of equitablein view of her length of service with petitioner.

Respondent filed a MOTION FOR PARTIAL RECONSIDERATION of the NLRC Resolutionlonger challenged her dismissal on the ground of work inefficiency, but prayed that petitioneordered to pay her the "Provident Fund" benefits under its retirement planfor which she clabe qualified pursuant to petitioners "Working Together" Manual, specifically the provision o12.5 thereof which states:

Should you (employee) resign or be discharged for reasons other than miscondto your earliest retirement date, you will be paid a percentage of your share in the Faccording to the following schedule:

Completed Years of ContinuousService

Vesting

20 or more years 100%

19 years 95%

18 years 90%

x x x x x x x x

(Emphasis and underscoring supplied)
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Respondent, claiming that the labor arbiter upheld her dismissal on the ground of merely "workinefficiency" and not for any misconduct on her part, asserted that she is entitled to 90% of theretirement 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 theabove-mentioned October 24, 2001 Resolution granted respondents motion for partialreconsideration.

5Petitioner 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 totothe challenged NLRC Resolution.Its motion for reconsideration having been denied by the appellate court by Resolution of July 29,2003, the present petition

6was filed, petitioner asserting as follows:

1. The NLRC has no authority to pass upon and resolve issues and grant claims notpleaded and proved before the Labor Arbiter.

2. The NLRC acted without authority or without or in excess of jurisdiction when it grantedthe entirely new/subsequent claim (for payment of retirement benefits) of Paragas.

3. In any case, (a) the actuations of Paragas narrated in petitioners motion forreconsideration [of the NLRC Resolution dated October 24, 2001] fo r which petitioner haddismissed her on the ground of Serious Misconduct, among other grounds and (b) thedecision of the Labor Arbiter dismissing Paragas complaint for illegal dismissal for lack of

merit, which the NLRC affirmed, show that Paragas is not entitled to her new claim forretirement benefits; for as Paragas herself has shown in he r motion for partialreconsideration, under the Retirement Plan of the bank a bank employee who has beendismissed for misconduct is not entitled to retirement benefit.

4. In any event, even assuming that Paragas was entitled to retirement benefit, her claimtherefor is already time-barred.

5. Thus, the Court of Appeals erred when it dismissed petitioners petition in CA-G.R. No.SP 69642.

7

The petition is impressed with merit.

That respondent did not expressly claim retirement benefits in t he proceedings before the labor

arbiter is not disputed. Indeed, she admits that the first time she explicitly prayed for such benefitswas in her Motion for Partial Reconsideration filed with the NLRC. She argues, nonetheless, that thegrant thereof by the NLRC was warranted based on the principle that rules of procedure andevidence should not be applied rigidly and technically in labor cases. Moreover, she alleges that herclaim for retirement benefits was implicit in her general prayer in her position paper for "such otherreliefs as may be just and equitable."

While it is established that technical rules of procedure may be relaxed in labor cases, Maebo v.NLRC

8instructs

We wish, however, to stress some points. Firstly, while it is true that the Rules of thmust be liberally construed and that the NLRC is not bound by the technicalities ofprocedure, the Labor Arbiters and the NLRC itself must not be the first to arbitrarilydisregard specific provisions of the Rules which are precisely intended to assparties in obtaining just, expeditious, and inexpensive settlement of labordisputes. One such provision is Section 3, Rule V of the New Rules of Procedure NLRC which requires the submission of verified position paperswithin fifteen day

the date of the last conference, with proof of service thereof on the other parties. Thposition papers "shall cover only those claims and causes of action raised in thecomplaint excluding those that may have been amicably settled, and shall be accomby all supporting documents including the affidavits of their respective witnesses wshall take the place of the latters testimony." After the submission thereof, the p"shallnot be allowed to allege facts, or present evidence to prove facts, not refer

and any cause or causes of action no t included in the complaint or position papersaffidavits and other documents."(Emphasis and underscoring supplied)

Respondent indeed prayed for "other just and equitable relief," but the same may not be inteso broadly as to include even those which are not warranted by the factual premises allegedparty. Thus the January 24, 2003 Decision of the Court of Appeals correctly stated: "It has bruled in this jurisdiction that the general prayer for other reliefs is applicable to such other rewhich are warranted by the law and facts a lleged by the respondent in her basic pleadings aon a newly created issue."

9(Underscoring supplied) Particularly in People v. Lacson,

10this

held:

x x x Case law has it that a prayer for equitable relief is of no avail, unless the petitstates facts which will authorize the court to grant such relief. A court cannot sin motion, nor has it power to decide questions except as presented by the parties pleadings. Anything that is resolved or decided beyond them is coram non judicea

(Emphasis supplied)

Respondents assertion that she mentioned the ma tter regarding the Provident Fund even pher Motion for Partial Reconsiderationon page 14 of her position paper and again on pag7 of her "Notice of Appeal and Appeal Memorandum"is unavailing.

Her "Notice of Appeal and Appeal Memorandum" was filed aftershe had already submittedposition paper. Thus, any mention of the Provident Fund therein would fail to adhere to the ruling in Maebo, the thrust of which was precisely that all facts, evidence, and causes of acshould already be proffered in the position papers and the supporting documents thereto, nlater pleading.

As to respondents position paper, there was only the mere mention of "Provident A & C," wcorresponding amount of P1,086,335.43, among the actual damages that she was allegedlysuffering from her continued severance from employment.

11Respondent made no attempt t

what this "Provident A & C" was, nor of fer any substantiation for including it to be among hedamages. She did not even hint how "Provident A & C" had a bearing on retirement benefitswhile respondent did refer to the Provident Fund in her position paper, such reference was tvague to be a basis f or any court or administrative body to grant her retirement benefits.

Respondent justifies her failure to claim for retirement benefits before the labor arbiter by allthat it would be inconsistent with her prayer for reinstatement. Respondent, however, couldeasily claimed such benefits as an alternative relief.
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In any event, respondent is not entitled to retirement benefits as this Court finds that she was validlydismissed 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 beaccorded not only great weight and respect, but even finality, the rule only applies for as long asthese findings are supported by substantial evidence.

12In the present case, the NLRC

was absolutely silent on why it did not give credence to petitioners evidence on respondentsmisconduct. It was content merely to state that "the separation is not for reasons of misconduct butfor other grounds"

13without any substantiation and in total disregard of the evidence proffered by

petitioner. Colegio de San Juan de Letran-Calamba v. Villas14

instructs:

Likewise, findings of fact of administrative agencies and quasi-judicial bodies which have

acquired expertise because their jurisdiction is confined to specific matters, are generallyaccorded not only great respect but even finality. They are binding upon thisCourt unless there is a showing of grave abuse of discretion or where it is clearlyshown that they were arrived at arbitrarily or in utter disregard of the evidence onrecord.(Emphasis and underscoring supplied)

True, the NLRC adopted the findings of the labor arbiter, but thelabor arbiter did not expresslyrule on the issue of respondents alleged misconductwhich is not surprising, for a rulingthereon was not then strictly necessary. At that stage, the main issue which had to be resolved wasonly whether respondents dismissal was valid, and not whether she was qualified for retirementbenefits. Only when respondent raised the claim of retirement benefits did it become crucial todetermine whether she was validly dismissed on the specific ground of serious misconduct, not onlyon the ground of poor work performance.

As reflected above, this Court, after a review of the NLRC finding that respondent did not commitserious misconduct, finds otherwise.

While the labor arbiter did not explicitly rule that respondent committed serious misconduct, hisdecision leads to that conclusion, for the documentary evidence which it cites as basis to prove herwork 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 theperformance 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 respondentwas not lacking in objectivity.

These performance appraisals, however, did not merely show that respondent was not able to meetperformance targets. More relevantly, they also consistentlynoted significant behavioral andattitudinal problems in respondent. In particular, respondent was found to be very

argumentative;

15

she had difficulty working with others;

16

she was hard to deal with;

17

and she neverceased being the subject of complaints from co-workers.18

Moreover, beyond the documents referred to in the labor arbiters decision, there are other pieces ofevidence on record which further establish that respondent was validly dismissed not only for workinefficiency but for serious misconduct. The Court sees no reason why these should not beaccorded credibility along with those cited by the labor arbiter.

The assessment of respondents performance by Randy Uson, another superior of respondgiven weight by the labor arbiter who noted that Uson was "described as [a] very professionfair person by complainant [herein-respondent] herself."

19Significantly, Uson later commen

respondents behavior as follows:

"Less tangible but none the less real, are the common concerns raised by her pand supervisor, on the stress and tension created when Rose is around. Theconscious effort to get out of her way and avoid conflict, hinders productivefficiency and has adversely affected the morale of the entire unit. x x x"

20(Em

and underscoring supplied)

More. For the appraisal period from June to December 1995, respondents performance ap

report stated that her attitude towards her work, the bank, and superiors needed reformationreport for January to June 1996made the same observation,22

indicating that there was noimprovement on her part.

The performance appraisal report of respondent for the period of January to June 1997, bestating that she was still "hard to deal with," described her as "belligerent," one who had "a presence which affects the morale of the entire unit," and who "pick[ed] fights with peers anemployees even without provocation."

23

The evaluation of respondent cited above finds corroboration in her admission that "she maybeen tactless and insolent in dealing with he r superior but it does not allegedly warrant the spenalty of dismissal."

24

Finally, even the NLRC, its later ruling that respondent was not guilty of misconductnotwithstanding, was aware that the problem with respondent was not merely her poor work

but her unreasonable behavior and unpleasan t deportment. Thus, as its Resolution of Octob2000 drew to a close, it stated that petitioner was "correct" in invoking Cathedral School ofTechnology v. NLRC,

25specifically the following portion of this Courts decision therein:

An evaluative review of the records of this case nonetheless supports a finding of acause for termination. The reason for which private respondents services were ternamely, herunreasonable behavior and unpleasant deportmentin dealing with people she closely works with in the course of her employment, is analogous to the"just causes" enumerated under the Labor Code. (Emphasis supplied)

It bears noting that petitioner cited Cathedral School of Technologyin its Comment/Reply toComplainant-Appellants Appeal Memorandum precisely to show that its dismissal of complon the ground of "gross inefficiency and unreasonable behavior" (emphasis supplied) wascorrectly upheld by the labor arbiter.

26

When an employee, despite repeated warnings from the employer, obstinately refuses to cubellicose inclination such that it erodes the morale o f co-employees, the same may be a grodismissal for serious misconduct.

As this Court held in National Service Corp. v. Leogardo, Jr.,27

"[a] series of irregularities whtogether may constitute serious misconduct, which under Article 283 of the Labor Code, is acause for termination." And as it held inAsian Design and Manufacturing Corporation v. De
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11/29

Minister of Labor,acts destructive of the morale of ones co -employees may be considered seriousmisconduct.

28

It is respondents obstinate refusal to reform herself which

Documents

3rd Batch -Labor Relations