SECOND DIVISION

[G.R. No. 166208. June 29, 2007.]

KING OF KINGS TRANSPORT, INC., CLAIRE DELA FUENTE,
and MELISSA LIM, petitioners, vs. SANTIAGO O. MAMAC,
respondent.

DECISION

VELASCO, JR., J :
p

Is a verbal appraisal of the charges against the employee a breach of the procedural due
process? This is the main issue to be resolved in this plea for review under Rule 45 of the
September 16, 2004 Decision 1 of the Court of Appeals (CA) in CA-GR SP No. 81961.
Said judgment affirmed the dismissal of bus conductor Santiago O. Mamac from
petitioner King of Kings Transport, Inc. (KKTI), but ordered the bus company to pay full
backwages for violation of the twin-notice requirement and 13th-month pay. Likewise
assailed is the December 2, 2004 CA Resolution 2 rejecting KKTI's Motion for
Reconsideration.
TDcCIS

The Facts
Petitioner KKTI is a corporation engaged in public transportation and managed by Claire
Dela Fuente and Melissa Lim.
Respondent Mamac was hired as bus conductor of Don Mariano Transit Corporation
(DMTC) on April 29, 1999. The DMTC employees including respondent formed the
Damayan ng mga Manggagawa, Tsuper at Conductor-Transport Workers Union and
registered it with the Department of Labor and Employment. Pending the holding of a
certification election in DMTC, petitioner KKTI was incorporated with the Securities and
Exchange Commission which acquired new buses. Many DMTC employees were
subsequently transferred to KKTI and excluded from the election.
The KKTI employees later organized the Kaisahan ng mga Kawani sa King of Kings
(KKKK) which was registered with DOLE. Respondent was elected KKKK president.
Respondent was required to accomplish a "Conductor's Trip Report" and submit it to the
company after each trip. As a background, this report indicates the ticket opening and
closing for the particular day of duty. After submission, the company audits the reports.

Once an irregularity is discovered, the company issues an "Irregularity Report" against

the employee, indicating the nature and details of the irregularity. Thereafter, the
concerned employee is asked to explain the incident by making a written statement or
counter-affidavit at the back of the same Irregularity Report. After considering the
explanation of the employee, the company then makes a determination of whether to
accept the explanation or impose upon the employee a penalty for committing an
infraction. That decision shall be stated on said Irregularity Report and will be furnished
to the employee.
CSHEca

Upon audit of the October 28, 2001 Conductor's Report of respondent, KKTI noted an
irregularity. It discovered that respondent declared several sold tickets as returned tickets
causing KKTI to lose an income of eight hundred and ninety pesos. While no irregularity
report was prepared on the October 28, 2001 incident, KKTI nevertheless asked
respondent to explain the discrepancy. In his letter, 3 respondent said that the erroneous
declaration in his October 28, 2001 Trip Report was unintentional. He explained that
during that day's trip, the windshield of the bus assigned to them was smashed; and they
had to cut short the trip in order to immediately report the matter to the police. As a result
of the incident, he got confused in making the trip report.
On November 26, 2001, respondent received a letter 4 terminating his employment
effective November 29, 2001. The dismissal letter alleged that the October 28, 2001
irregularity was an act of fraud against the company. KKTI also cited as basis for
respondent's dismissal the other offenses he allegedly committed since 1999.
On December 11, 2001, respondent filed a Complaint for illegal dismissal, illegal
deductions, nonpayment of 13th-month pay, service incentive leave, and separation pay.
He denied committing any infraction and alleged that his dismissal was intended to bust
union activities. Moreover, he claimed that his dismissal was effected without due
process.
In its April 3, 2002 Position Paper, 5 KKTI contended that respondent was legally
dismissed after his commission of a series of misconducts and misdeeds. It claimed that
respondent had violated the trust and confidence reposed upon him by KKTI. Also, it
averred that it had observed due process in dismissing respondent and maintained that
respondent was not entitled to his money claims such as service incentive leave and 13thmonth pay because he was paid on commission or percentage basis.
On September 16, 2002, Labor Arbiter Ramon Valentin C. Reyes rendered judgment
dismissing respondent's Complaint for lack of merit. 6
Aggrieved, respondent appealed to the National Labor Relations Commission (NLRC).
On August 29, 2003, the NLRC rendered a Decision, the dispositive portion of which
reads:
cEATSI

WHEREFORE, the decision dated 16 September 2002 is MODIFIED in that

respondent King of Kings Transport Inc. is hereby ordered to indemnify
complainant in the amount of ten thousand pesos (P10,000) for failure to
comply with due process prior to termination.
The other findings are AFFIRMED.
SO ORDERED. 7

Respondent moved for reconsideration but it was denied through the November 14, 2003
Resolution 8 of the NLRC.
Thereafter, respondent filed a Petition for Certiorari before the CA urging the
nullification of the NLRC Decision and Resolution.
The Ruling of the Court of Appeals
Affirming the NLRC, the CA held that there was just cause for respondent's dismissal. It
ruled that respondent's act in "declaring sold tickets as returned tickets . . . constituted
fraud or acts of dishonesty justifying his dismissal." 9
Also, the appellate court sustained the finding that petitioners failed to comply with the
required procedural due process prior to respondent's termination. However, following
the doctrine in Serrano v. NLRC, 10 it modified the award of PhP10,000 as
indemnification by awarding full backwages from the time respondent's employment was
terminated until finality of the decision.
SHECcD

Moreover, the CA held that respondent is entitled to the 13th-month pay benefit.
Hence, we have this petition.
The Issues
Petitioner raises the following assignment of errors for our consideration:
Whether the Honorable Court of Appeals erred in awarding in favor of the
complainant/private respondent, full back wages, despite the denial of his
petition for certiorari.
Whether the Honorable Court of Appeals erred in ruling that KKTI did not
comply with the requirements of procedural due process before dismissing the
services of the complainant/private respondent.
Whether the Honorable Court of Appeals rendered an incorrect decision in that
[sic] it awarded in favor of the complaint/private respondent, 13th month pay
benefits contrary to PD 851. 11

The Court's Ruling

The petition is partly meritorious.
The disposition of the first assigned error depends on whether petitioner KKTI complied
with the due process requirements in terminating respondent's employment; thus, it shall
be discussed secondly.
Non-compliance with the Due Process Requirements
Due process under the Labor Code involves two aspects: first, substantive the valid
and authorized causes of termination of employment under the Labor Code; and second,
procedural the manner of dismissal. 12 In the present case, the CA affirmed the
findings of the labor arbiter and the NLRC that the termination of employment of
respondent was based on a "just cause." This ruling is not at issue in this case. The
question to be determined is whether the procedural requirements were complied with.
Art. 277 of the Labor Code provides the manner of termination of employment, thus:
Art. 277.Miscellaneous Provisions. . . .
(b)Subject to the constitutional right of workers to security of tenure and their
right to be protected against dismissal except for a just and authorized cause
without prejudice to the requirement of notice under Article 283 of this Code,
the employer shall furnish the worker whose employment is sought to be
terminated a written notice containing a statement of the causes for termination
and shall afford the latter ample opportunity to be heard and to defend himself
with the assistance of his representative if he so desires in accordance with
company rules and regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision taken by the employer
shall be without prejudice to the right of the worker to contest the validity or
legality of his dismissal by filing a complaint with the regional branch of the
National Labor Relations Commission. The burden of proving that the
termination was for a valid or authorized cause shall rest on the employer.
IcCDAS

Accordingly, the implementing rule of the aforesaid provision states:

SEC. 2.Standards of due process; requirements of notice. In all cases of
termination of employment, the following standards of due process shall be
substantially observed:
I.For termination of employment based on just causes as defined in Article 282
of the Code:
(a)A written notice served on the employee specifying the ground or
grounds for termination, and giving said employee reasonable
opportunity within which to explain his side.

(b)A hearing or conference during which the employee concerned, with

the assistance of counsel if he so desires is given opportunity to respond
to the charge, present his evidence, or rebut the evidence presented
against him.
(c)A written notice of termination served on the employee, indicating
that upon due consideration of all the circumstances, grounds have been
established to justify his termination. 13
In case of termination, the foregoing notices shall be served on the employee's
last known address. 14
ETHIDa

To clarify, the following should be considered in terminating the services of employees:

(1)The first written notice to be served on the employees should contain the specific
causes or grounds for termination against them, and a directive that the employees are
given the opportunity to submit their written explanation within a reasonable period.
"Reasonable opportunity" under the Omnibus Rules means every kind of assistance that
management must accord to the employees to enable them to prepare adequately for their
defense. 15 This should be construed as a period of at least five (5) calendar days from
receipt of the notice to give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence, and decide on the
defenses they will raise against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and defenses, the notice should
contain a detailed narration of the facts and circumstances that will serve as basis for the
charge against the employees. A general description of the charge will not suffice. Lastly,
the notice should specifically mention which company rules, if any, are violated and/or
which among the grounds under Art. 282 is being charged against the employees.

(2)After serving the first notice, the employers should schedule and conduct a hearing or
conference wherein the employees will be given the opportunity to: (1) explain and
clarify their defenses to the charge against them; (2) present evidence in support of their
defenses; and (3) rebut the evidence presented against them by the management. During
the hearing or conference, the employees are given the chance to defend themselves
personally, with the assistance of a representative or counsel of their choice. Moreover,
this conference or hearing could be used by the parties as an opportunity to come to an
amicable settlement.
(3)After determining that termination of employment is justified, the employers shall
serve the employees a written notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been considered; and (2)
grounds have been established to justify the severance of their employment.
DCSETa

In the instant case, KKTI admits that it had failed to provide respondent with a "charge

sheet." 16 However, it maintains that it had substantially complied with the rules, claiming
that "respondent would not have issued a written explanation had he not been informed of
the charges against him." 17
We are not convinced.
First, respondent was not issued a written notice charging him of committing an
infraction. The law is clear on the matter. A verbal appraisal of the charges against an
employee does not comply with the first notice requirement. In Pepsi Cola Bottling Co. v.
NLRC, 18 the Court held that consultations or conferences are not a substitute for the
actual observance of notice and hearing. Also, in Loadstar Shipping Co., Inc. v. Mesano,
19 the Court, sanctioning the employer for disregarding the due process requirements,
held that the employee's written explanation did not excuse the fact that there was a
complete absence of the first notice.
Second, even assuming that petitioner KKTI was able to furnish respondent an
Irregularity Report notifying him of his offense, such would not comply with the
requirements of the law. We observe from the irregularity reports against respondent for
his other offenses that such contained merely a general description of the charges against
him. The reports did not even state a company rule or policy that the employee had
allegedly violated. Likewise, there is no mention of any of the grounds for termination of
employment under Art. 282 of the Labor Code. Thus, KKTI's "standard" charge sheet is
not sufficient notice to the employee.
Third, no hearing was conducted. Regardless of respondent's written explanation, a
hearing was still necessary in order for him to clarify and present evidence in support of
his defense. Moreover, respondent made the letter merely to explain the circumstances
relating to the irregularity in his October 28, 2001 Conductor's Trip Report. He was
unaware that a dismissal proceeding was already being effected. Thus, he was surprised
to receive the November 26, 2001 termination letter indicating as grounds, not only his
October 28, 2001 infraction, but also his previous infractions.
EHTIDA

Sanction for Non-compliance with Due Process Requirements

As stated earlier, after a finding that petitioners failed to comply with the due process
requirements, the CA awarded full backwages in favor of respondent in accordance with
the doctrine in Serrano v. NLRC. 20 However, the doctrine in Serrano had already been
abandoned in Agabon v. NLRC by ruling that if the dismissal is done without due process,
the employer should indemnify the employee with nominal damages. 21
Thus, for non-compliance with the due process requirements in the termination of
respondent's employment, petitioner KKTI is sanctioned to pay respondent the amount of
thirty thousand pesos (PhP30,000) as damages.

Thirteenth (13th)-Month Pay

Section 3 of the Rules Implementing Presidential Decree No. 851 22 provides the
exceptions in the coverage of the payment of the 13th-month benefit. The provision
states:
SEC. 3.Employers covered. The Decree shall apply to all employers except
to:
xxx xxx xxx
e)Employers of those who are paid on purely commission, boundary, or task
basis, and those who are paid a fixed amount for performing a specific work,
irrespective of the time consumed in the performance thereof, except where the
workers are paid on piece-rate basis in which case the employer shall be
covered by this issuance insofar as such workers are concerned.

Petitioner KKTI maintains that respondent was paid on purely commission basis; thus,
the latter is not entitled to receive the 13th-month pay benefit. However, applying the
ruling in Philippine Agricultural Commercial and Industrial Workers Union v. NLRC, 23
the CA held that respondent is entitled to the said benefit.
CEaDAc

It was erroneous for the CA to apply the case of Philippine Agricultural Commercial and
Industrial Workers Union. Notably in the said case, it was established that the drivers and
conductors praying for 13th-month pay were not paid purely on commission. Instead,
they were receiving a commission in addition to a fixed or guaranteed wage or salary.
Thus, the Court held that bus drivers and conductors who are paid a fixed or guaranteed
minimum wage in case their commission be less than the statutory minimum, and
commissions only in case where they are over and above the statutory minimum, are
entitled to a 13th-month pay equivalent to one-twelfth of their total earnings during the
calendar year.
On the other hand, in his Complaint, 24 respondent admitted that he was paid on
commission only. Moreover, this fact is supported by his pay slips 25 which indicated the
varying amount of commissions he was receiving each trip. Thus, he was excluded from
receiving the 13th-month pay benefit.
WHEREFORE, the petition is PARTLYGRANTED and the September 16, 2004
Decision of the CA is MODIFIED by deleting the award of backwages and 13th-month
pay. Instead, petitioner KKTI is ordered to indemnify respondent the amount of thirty
thousand pesos (PhP30,000) as nominal damages for failure to comply with the due
process requirements in terminating the employment of respondent.
No costs.

SO ORDERED.
Quisumbing, Carpio, Carpio-Morales and Tinga, JJ., concur.

THIRD DIVISION
[G.R. No. 154503. February 29, 2008.]
UNIWIDE SALES WAREHOUSE CLUB and VIVIAN M.
APDUHAN, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and AMALIA P. KAWADA, respondents.

DECISION

AUSTRIA-MARTINEZ, J :
p

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court filed by Uniwide Sales Warehouse Club (Uniwide) and Vivian M. Apduhan
(Apduhan) seeking to annul the Decision 1 dated November 23, 2001 and the Resolution
2 dated July 23, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 64581.
The facts of the case:
Amalia P. Kawada (private respondent) started her employment with Uniwide sometime
in 1981 as a saleslady. Over the years, private respondent worked herself within
Uniwide's corporate ladder until she attained the rank of Full Assistant Store Manager
with a monthly compensation of P13,000.00 in 1995.
As a Full Assistant Store Manager, private respondent's primary function was to manage
and oversee the operation of the Fashion and Personal Care, GSR Toys, and Home
Furnishing Departments of Uniwide, to ensure its continuous profitability as well as to
see to it that the established company policies and procedures were properly complied
with and implemented in her departments. 3
Sometime in 1998, Uniwide received reports from the other employees regarding some
problems in the departments managed by the private respondent. 4 Thus, on March 15,
1998, Uniwide, through Store Manager Apduhan, issued a Memorandum addressed to the

private respondent summarizing the various reported incidents signifying unsatisfactory

performance on the latter's part which include the commingling of good and damaged
items, sale of a voluminous quantity of damaged toys and ready-to-wear items at
unreasonable prices, and failure to submit inventory reports. Uniwide asked private
respondent for concrete plans on how she can effectively perform her job. 5 In a letter 6
dated March 23, 1998, private respondent answered all the allegations contained in the
March 15, 1998 Memorandum.
Unsatisfied, Apduhan sent another Memorandum 7 dated March 30, 1998 to private
respondent where Apduhan claimed that the answers given by the private respondent in
her March 23, 1998 letter were all hypothetical and did not answer directly the
allegations attributed to her. 8 Apduhan elaborated the incidents contained in the March
15, 1998 Memorandum.
On June 30, 1998, Apduhan sent another Memorandum 9 seeking from the private
respondent an explanation regarding the incidents reported by Uniwide employees and
security personnel for alleged irregularities committed by the private respondent such as
allowing the entry of unauthorized persons inside a restricted area during non-office
hours, falsification of or inducing another employee to falsify personnel or company
records, sleeping and allowing a non-employee to sleep inside the private office,
unauthorized search and bringing out of company records, purchase of damaged home
furnishing items without the approval from superior, taking advantage of buying
damaged items in large quantity, alteration of approval slips for the purchase of damaged
items and abandonment of work. 10 In a letter 11 dated July 9, 1998, private respondent
answered the allegations made against her.
On July 27, 1998, private respondent sought medical help from the company physician,
Dr. Marivelle C. Zambrano (Dr. Zambrano), due to complaints of dizziness. 12 Finding
private respondent to be suffering from hypertension, Dr. Zambrano advised her to take
five days sick leave. 13
On July 30, 1998, private respondent was able to obtain from Dr. Zambrano a certificate
of fitness to work, 14 which she presented to Apduhan the following day. 15 It turned out
that Dr. Zambrano inadvertently wrote "Menia", the surname of the company nurse, in
the medical certificate instead of private respondent's surname. 16 Thereafter, private
respondent claims that Apduhan shouted at her and prevented her from resuming work
because she was not the person referred to in the medical certificate. 17 After private
respondent left Apduhan's office, a certain Evelyn Maigue, Apduhan's assistant,
approached the private respondent to get the certification so that it may be photocopied.
When she refused to give the certification, private respondent claims that Apduhan once
again shouted at her which caused her hypertension to recur and eventually caused her to
collapse. Private respondent's head hit the edge of the table before she fell down on the
ground for which she suffered contusions at the back of her head, as evidenced by the
medical certificate 18 issued by Dr. George K. C. Cheu of the Chinese General Hospital

& Medical Center. 19

On August 1, 1998, private respondent reported the confrontation between her and
Apduhan to the Central Police District. 20 Likewise, private respondent was able to
obtain from Dr. Zambrano the corrected certification 21 together with the clarification
that the name "Amalia Menia" written on the July 30, 1998 certification referred to
Amalia Kawada. 22
Thereafter, counsel for private respondent sent a letter 23 dated August 1, 1998 to
Apduhan stating that the latter's alleged continued harassment and vexation against
private respondent created a hostile work environment which had become life
threatening, and that they had no alternative but to bring the matter to the proper forum.
24
On August 2, 1998, Apduhan issued a Memorandum, 25 received on the same day by
Edgardo Kawada, the husband of private respondent, advising the latter of a hearing
scheduled on August 12, 1998 to be held at the Uniwide Office in Quirino Highway, and
warning her that failure to appear shall constitute as waiver and the case shall be
submitted for decision based on available papers and evidence. 26
On August 3, 1998, private respondent filed a case for illegal dismissal before the Labor
Arbiter (LA). 27
Counsel for private respondent sent a letter 28 dated August 8, 1998 to Apduhan claiming
that the August 2, 1998 Memorandum was a mere afterthought, in an attempt to justify
private respondent's dismissal; and that on August 3, 1998, private respondent had
already filed charges against Uniwide and Apduhan (petitioners).
On August 8, 1998, Apduhan sent a letter addressed to private respondent, which the
latter received on even date, advising private respondent to report for work, as she had
been absent since August 1, 1998; and warning her that upon her failure to do so, she
shall be considered to have abandoned her job. 29
On September 1, 1998, Apduhan issued a Memorandum 30 stating that since private
respondent was unable to attend the scheduled August 12, 1998 hearing, the case was
evaluated on the basis of the evidence on record; and enumerating the pieces of evidence
of the irregularities and violations of company rules committed by private respondent, the
latter's defenses and the corresponding findings by Uniwide. Portions of the
Memorandum read:
VIOLATIONS:
1.Allowing entry of Unauthorized person inside a Restricted Area during nonoffice hours (night-time)

xxx xxx xxx

FINDINGS:
Towards these evidence, Ms. A. Kawada only raised questions as to the
propriety of the entries on the logbook, but the offense itself was not even
denied categorically by the employee concerned. Hence, the fact remains that
the employee concerned indeed allowed the entries of Mr. Ed Kawada on
different occasions. The Security personnel when asked why they did not report
those incidents immediately, answered: They hesitated to report them because
they were afraid as the employee concerned is a manager, whom they thought
knows better then them.
*Violation No. 9 Type C, Code of Discipline*
2.Falsification of or Inducing another employee to falsify personnel or company
records.
xxx xxx xxx
FINDINGS:
In her answer, Ms. A. Kawada again only questioned the propriety of the entries
on the logbook, but there were clear indications that the violation was indeed
committed as shown by the abovestated pieces of evidence.
The testimonies by the witnesses' are very explicit of what really transpired,
specifically security guard Dennis Venancio, who just performs his duty of
reporting any unusual incident that occurred within his jurisdiction. The fact
that they failed to report it at an earlier time, in understandable, since they were
hesitant, that the manager might get back at them, or simply because of their
respect for Ms. A. Kawada, as a Manager.
*Violation No. 8 Type F, Code of Discipline*
3.Sleeping during overnight work last August 17, 1997.
xxx xxx xxx
FINDINGS:
Based on the records and reports submitted, there is no doubt that the concerned
employee committed such an offense. The witnesses stated their testimonies
only in accordance with what they have seen and witnessed during those stated
periods.
*Violation No. 7 Type D, Code of Discipline*

4.Unauthorized Search, Bringing Out and taking of Company Records, March

18, 1998 and March 20, 1998.
xxx xxx xxx
FINDINGS:
It is established that 15 approval slips were taken by the employee concerned,
however, only 11 approval slips were surrendered or returned.
*Violation No. 1 Type F, Code of Discipline*
5.Purchases of Dented or Sub-standard items of Home Furnishing without
approval from authorized Supervisor, February 3, 1998.
xxx xxx xxx
FINDINGS:
Towards this accusation subject employee countered that she only asked Ms.
Melanie Laag why she was not able to sign said approval slip but not for the
purpose of letting her sign it. By this, it only means that indeed the said
approval slip does not contain the necessary approval prior to the purchase. This
could be related to the other charge against the subject employee on
unauthorized search and bringing out of company records, for based on the
circumstances there was such a search conducted to look for and retrieve
approval slips of subject employee, as there are really approval slips of subject
employee which does not bear the necessary approval. The search must have
been probably made to cover up and/or suppress such evidence against her.

6.Altering Approval slips dated January 17, 1998.

a)#1 original quantity 7 pieces changed to 2 pieces amount was
altered from Php14.00 to Php10.00.
b)#2 erasures on the number of quantity whether 15, 5 or 7 pieces.
xxx xxx xxx
FINDINGS:
Towards this accusation Ms. A. Kawada submitted no plausible explanation,
indicating that said employee concerned might have really committed the acts
complained of.
Violation of Company Rules on the proper procedure in selling of dented
merchandise.

7.Making Reservations of Dented Items January to February 1998.

xxx xxx xxx
FINDINGS:
There was no direct explanation submitted by Ms. A. Kawada on this. Thus, it
becomes clear that Ms. Kawada had violated the company rule on No
Reservation.
8.Conduct unbecoming of a manager in cornering and/or bringing large
quantity of damaged items (toys, furniture, RTW, appliances and Home
Furnishing items), causing demoralization among the store crew and
tainting management's image to its personnel.
xxx xxx xxx
FINDINGS:
The report that were submitted by the witnesses proved that Ms. Kawada made
those purchases of dented or sub-standard items that were under her assigned
area, without regard for the rest of the employees who wanted to buy also, thus,
using and taking advantage of her position, to the detriment of the other
employees and painting a bad image of the company's managers.
9.Abandonment of work or absence for five (5) consecutive days without prior
notice from any authorized company officer or higher authority.
FINDINGS:
Despite notice for subject employee to report to work or else be considered as
having abandoned her job, it appears that subject employee continuously failed
to report for work without any explanation.
*Violation No. 2, Sec. A*
Based on all the foregoing it seems clear and convincing, that you have indeed
committed the violations imputed on you. The aforementioned violations per se
deserves termination as a penalty, not to mention that they also constitute willful
breach of the trust reposed on you as a manager. Thus, we have no other
alternative but to terminate your service with the Company, effective
September 1, 1998, on the grounds of violations of Company Rules,
Abandonment of Work and loss of trust and confidence.
You are hereby directed to surrender all other documents and papers pertaining
to your job, which you may have acquired and have come into your possession
as a result of your employment with the company.

Please be guided. thank you. 31 (Emphasis supplied)

On March 9, 1999 the LA 32 dismissed the complaint for lack of merit. 33 Private
respondent appealed the LA's decision to the National Labor Relations Commission
(NLRC).
In its Decision 34 dated December 27, 2000, the NLRC ruled in favor of private
respondent, reversing the LA, to wit:
WHEREFORE, the decision appealed from is hereby REVERSED and SET
ASIDE. Complainant is declared constructively dismissed by respondents.
Respondents Uniwide Sales Warehouse Club and Vivian Apduhan are jointly
and severally ordered to pay complainant the following sums:
Separation Pay:
November 1981 July 3, 1998
P13,000.00 x 16.8 yrs.=P218,400.00
Backwages:
July 31, 1998-up to the present
Moral Damages=P100,000.00
Exemplary DamagesP100,000.00
Attorney's fees computed at ten percent (10%) of the total award.
SO ORDERED. 35

According to the NLRC, private respondent was subjected to inhuman and anti-social
treatment oppressive to labor. Private respondent received successive memoranda from
Apduhan accusing the former of different infractions, some of which offenses
complainant was informed of only a year after the alleged commission. Further,
Apduhan's ill will and motive to edge private respondent out of her employ was displayed
by Apduhan's stubborn refusal to allow private respondent to continue her work on the
flimsy excuse that the medical certificate did not bear her correct surname, while
Apduhan knew for a fact that the same could not have referred to another person but to
private respondent. 36
Also, the NLRC observed that private respondent was not afforded due process by
petitioners because the former was not given an opportunity to a fair hearing in that the
investigation was conducted after private respondent had been constructively dismissed;
and that there was no point for private respondent to still attend the investigation set on
August 12, 1998 after her constructive dismissal on July 31, 1998 and after she had

already filed her complaint.

Feeling aggrieved, petitioners appealed the NLRC Decision to the CA. In the assailed
Decision 37 dated November 23, 2001, the CA affirmed in toto the NLRC Decision.
Hence, the present petition. 38
The sole issue raised before the Court is:
WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN
SUSTAINING THE NLRC'S FINDING THAT PRIVATERESPONDENT
WAS CONSTRUCTIVELY DISMISSED. 39

It is a well-settled rule that the jurisdiction of the Supreme Court in petitions for review
oncertiorari under Rule 45 of the Rules of Court is limited to reviewing errors of law, not
of fact. 40 The Court is not a trier of facts. In the exercise of its power of review, the
findings of fact of the CA are conclusive and binding and consequently, it is not the
Court's function to analyze or weigh evidence all over again. 41
The foregoing rule, however, is not absolute. The Court, in Dusit Hotel Nikko v. National
Union of Workers in Hotel, Restaurant and Allied Industries (NUWHRAIN), 42 held that
the factual findings of the NLRC as affirmed by the CA, are accorded high respect and
finality unless the factual findings and conclusions of the LA clash with those of the
NLRC and the CA in which case the Court will have to review the records and the
arguments of the parties to resolve the factual issues and render substantial justice to the
parties. 43
The present case is clouded by conflict of factual perceptions. Consequently, the Court is
constrained to review the factual findings of the CA which contravene the findings of
facts of the LA.
The Court's Ruling
The petition is meritorious. After a thorough examination of the conflicting positions of
the parties, the Court finds the records bereft of evidence to substantiate the conclusions
of the NLRC and the CA that private respondent was constructively dismissed from
employment.
Case law defines constructive dismissal as a cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion
in rank or diminution in pay or both; or when a clear discrimination, insensibility, or
disdain by an employer becomes unbearable to the employee. 44
The test of constructive dismissal is whether a reasonable person in the employee's
position would have felt compelled to give up his position under the circumstances. 45 It

is an act amounting to dismissal but made to appear as if it were not. In fact, the
employee who is constructively dismissed may be allowed to keep on coming to work.
Constructive dismissal is therefore a dismissal in disguise. The law recognizes and
resolves this situation in favor of employees in order to protect their rights and interests
from the coercive acts of the employer. 46
In the present case, private respondent claims that from the months of February to June
1998, she had been subjected to constant harassment, ridicule and inhumane treatment by
Apduhan, with the hope that the latter can get the private respondent to resign. 47 The
harassment allegedly came in the form of successive memoranda which private
respondent would receive almost every week, enumerating a litany of offenses and
maligning her reputation and spreading rumors among the employees that private
respondent shall be dismissed soon. 48 The last straw of the imputed harassment was the
July 31, 1998 incident wherein private respondent's life was put in danger when she lost
consciousness due to hypertension as a result of Apduhan's alleged hostility and shouting.
49
The Court finds that private respondent's allegation of harassment is a specious statement
which contains nothing but empty imputation of a fact that could hardly be given any
evidentiary weight by this Court. 50 Private respondent's bare allegations of constructive
dismissal, when uncorroborated by the evidence on record, cannot be given credence. 51
The sending of several memoranda addressed to a managerial or supervisory employee
concerning various violations of company rules and regulations, committed on different
occasions, are not unusual. The alleged February to June 1998 series of memoranda given
by petitioners to private respondent asking the latter to explain the alleged irregular acts
should not be construed as a form of harassment but merely an exercise of management's
prerogative to discipline its employees.
The right to impose disciplinary sanctions upon an employee for just and valid cause, as
well as the authority to determine the existence of said cause in accordance with the
norms of due process, pertains in the first place to the employer. 52 Precisely, petitioners
gave private respondent successive memoranda so as to give the latter an opportunity to
controvert the charges against her. Clearly, the memoranda are not forms of harassment,
but petitioners' compliance with the requirements of due process.
The July 31, 1998 confrontation where Apduhan allegedly shouted at private respondent
which caused the latter's hypertension to recur and eventually caused her to collapse
cannot by itself support a finding of constructive dismissal by the NLRC and the CA.
Even if true, the act of Apduhan in shouting at private respondent was an isolated
outburst on the part of Apduhan that did not show a clear discrimination or insensibility
that would render the working condition of private respondent unbearable.

Moreover, the finding of the NLRC that Apduhan knew for a fact that the certification
presented by private respondent referred to the latter and not to another person is a mere
conjecture. There is no evidence to sustain the same. This Court has consistently held that
litigations cannot be properly resolved by suppositions, deductions, or even
presumptions, with no basis in evidence, for the truth must have to be determined by the
hard rules of admissibility and proof. 53
Self-serving and unsubstantiated declarations are insufficient to establish a case before
quasi-judicial bodies. Well-entrenched is the rule that the quantum of evidence required
to establish a fact in quasi-judicial bodies is substantial evidence. Substantial evidence is
such amount of relevant evidence which a reasonable mind might accept as adequate to
support a conclusion, even if other equally reasonable minds might opine otherwise. 54
On petitioners' claim of abandonment by private respondent, well-settled is the rule that
to constitute abandonment of work, two elements must concur: (1) the employee must
have failed to report for work or must have been absent without valid or justifiable
reason, and (2) there must have been a clear intention on the part of the employee to sever
the employer-employee relationship manifested by some overt act. The employer has the
burden of proof to show the employee's deliberate and unjustified refusal to resume his
employment without any intention of returning. Mere absence is not sufficient. There
must be an unequivocal intent on the part of the employee to discontinue his
employment. 55
Private respondent's failure to report for work despite the August 8, 1998 letter sent by
Apduhan to private respondent advising the latter to report for work is not sufficient to
constitute abandonment. It is a settled rule that failure to report for work after a notice to
return to work has been served does not necessarily constitute abandonment. 56
Private respondent mistakenly believed that the successive memoranda sent to her from
March 1998 to June 1998 constituted discrimination, insensibility or disdain which was
tantamount to constructive dismissal. Thus, private respondent filed a case for
constructive dismissal against petitioners and consequently stopped reporting for work.
In the case of Lemery Savings & Loan Bank v. National Labor Relations Commission, 57
the Court held:
It is true that the Constitution has placed a high regard for the welfare of the
labor sector. However, social and compassionate justice does not contemplate a
situation whereby the management stands to suffer for certain misconceptions
created in the mind of an employee. . . .
Nevertheless, the mistaken belief on the part of the employee should not lead
to a drastic conclusion that he has chosen to abandon his work. . . . We
cannot readily infer abandonment even if, sometime during the pendency of this
case, he refused to heed the warning given him by petitioner Dimailig while

believing that he was dismissed through no fault of his. 58 (Emphasis supplied)

The Court finds that petitioners were not able to establish that private respondent
deliberately refused to continue her employment without justifiable reason. To repeat, the
Court will not make a drastic conclusion that private respondent chose to abandon her
work on the basis of her mistaken belief that she had been constructively dismissed by
Uniwide.
Nonetheless, the Court agrees with the findings of the LA that the termination of private
respondent was grounded on the existence of just cause under Article 282 (c) of the
Labor Code 59 or willful breach by the employee of the trust reposed on him by his
employer or a duly authorized representative. 60
Private respondent occupies a managerial position. As a managerial employee, mere
existence of a basis for believing that such employee has breached the trust of his
employer would suffice for his dismissal. 61
In Caoile v. National Labor Relations Commission, 62 the Court distinguished the
treatment of managerial employees from that of rank-and-file personnel, insofar as the
application of the loss of trust and confidence is concerned. The Court held:
Thus, with respect to rank-and-file personnel, loss of trust and confidence as
ground for valid dismissal requires proof of involvement in the alleged events in
question, and that mere uncorroborated assertions and accusations by the
employer will not be sufficient. 63 But, as regards a managerial employee,
mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal. Hence, in the case of
managerial employees, proof beyond reasonable doubt is not required, it
being sufficient that there is some basis for such loss of confidence, such as
when the employer has reasonable ground to believe that the employee
concerned is responsible for the purported misconduct, and the nature of
his participation therein renders him unworthy of trust and confidence
demanded by his position. 64 (Emphasis supplied).

In order to give private respondent an opportunity to explain the several violations of

company rules she allegedly committed, private respondent was given several
memoranda, to which she initially responded. Also, to give private respondent an
opportunity to be heard, defend herself, confront the witnesses against her as well as to
present her own evidence, Apduhan scheduled a hearing on August 12, 1998, notice of
which was sent on August 2, 1998 and duly received by private respondent's husband on
the same day. 65 This fact alone would have indicated to private respondent that there
was no intention on the part of petitioners to effect her constructive dismissal. However,
private respondent opted to file the complaint for illegal dismissal the next day; and not
to attend the scheduled hearing on August 12, 1998. Thus, petitioners were justified to
decide the case on the basis of the records at hand. 66

The irregularities and offenses committed by private respondent, corroborated by the

various pieces of evidence supporting such charges, i.e. records, reports and testimonies
of Uniwide employees, 67 in the mind of the Court, constitute substantial evidence that
private respondent is in fact responsible for the alleged charges.
To disprove the charges against her, private respondent presented a letter 68 dated July
29, 1998 from a former Uniwide employee, Luisa Astrologo (Astrologo), stating that the
latter was urged by her manager, a certain Ralph Galang, to testify against private
respondent for improper behavior concerning the "dented product for which private
respondent is abusing her power of reserving and picking the best product she can afford
to dispatch." 69 The letter, however, does not state that the charges Astrologo imputed to
private respondent were false. The letter merely states that Astrologo "does not see
anything wrong about the matter." 70 Moreover, in her Memorandum, 71 filed with the
Court, private respondent merely cited inconsistencies in the reports regarding the
charges imputed to her without denying the said allegations.
It is true that private respondent had risen from the ranks, from being a saleslady in 1981
to a Full Assistant Store Manager in 1995. She worked for Uniwide for almost 17 years
with a clean bill of record. However, these facts are not sufficient to overcome the
findings of petitioners that the private respondent is guilty of the charges imputed to her.
Finally, the NLRC and the CA erred in finding that private respondent was denied due
process. Private respondent claims that she lost the opportunity to be heard when she was
constructively dismissed on July 31, 1998, 72 and that it was only after she filed a
complaint for illegal dismissal with the NLRC on August 3, 1998 that petitioners notified
the private respondent of the investigation which will be conducted on August 12, 1998
concerning her alleged offenses. The Memorandum dated August 2, 1998 73 completely
demolishes such claims. It shows on its face that private respondent received the
Memorandum on August 2, 1998, a day before she filed the complaint for illegal
dismissal against petitioners; and that private respondent was notified that the hearing
was scheduled on August 12, 1998 and explicitly warned her that her failure to appear
thereat shall mean a waiver to be heard, and the case shall then be submitted for decision
based on available papers and evidence.
In reality, private respondent, as found earlier was not terminated on July 31, 1998. There
was no constructive dismissal. Again, the successive memoranda presented by private
respondent and the alleged July 31, 1998 shouting incident are not sufficient to establish
her claim of harassment.
However, as to the September 1, 1998 Memorandum where the private complainant was
dismissed for loss of trust and confidence, the Court finds the notice of the scheduled
August 12, 1998 hearing sufficient compliance with the due process requirement.
The essence of due process is simply an opportunity to be heard, or as applied to

administrative proceedings, a fair and reasonable opportunity to explain one's side. 74 It

is not the denial of the right to be heard but denial of the opportunity to be heard that
constitutes violation of due process of law. 75 In the instant case, private respondent was
again notified of the August 12, 1998 hearing through a letter 76 dated August 8, 1998
which was received by private respondent herself. 77 Clearly, private respondent was
given an opportunity to be heard. However, private respondent chose not to attend the
scheduled hearing because of her mistaken belief that she had already been constructively
dismissed.
At this point, the Court agrees with and adopts the findings of the LA in his Decision: 78

We cannot, with due respect, subscribe to complainant's [herein private

respondent] position for it simply lacks evidence and that all that there is to it is
seemingly a general allegation. We examined the record and as we have done it
we find no acts or incidents constituting complainant's alleged "constructive
dismissal". On the contrary, what is generally existing thereat is that
complainant was dismissed by the respondents [Uniwide and Apduhan] for an
array of violations consisting of, but not limited to the following: allowing entry
of unauthorized personnel inside a company restricted area; falsification of or
inducing another employee to falsify personnel or company records; sleeping
during overnight work; unauthorized search and bringing out of company
records; unauthorized purchase of damaged items; alteration of approval slips
for the purchase of damaged items; unduly reserving and buying of damaged
items; and abandonment of work.
In fact, as it even appears the "constructive dismissal" allegedly committed
on complainant looks simply an excuse to avoid and/or evade the
investigation and consequences of the violations imputed against her while
employed and/or acting as respondent's assistant store manager. As shown
on an earlier setting on the investigation of her case, she filed a sick leave, thus
causing the hearing/investigation to be rescheduled. Again, upon rescheduling,
complainant despite notice failed to appear or did not appear, this time coming
up with the excuse that she had been already "constructively dismissed". This
evasive attitude of her more than enough supports the impression that
complainant could be guilty or is guilty of the charges against her and believes
that she might not be able to defend herself. This is even bolstered by the
information that complainant called on several of the witnesses against her,
simply to influence them and their testimonies. . . . Thus, viewed the foregoing
finding, we opined that complainant could not have been "constructively
dismissed." 79 (Emphasis supplied)

It should be remembered that the Philippine Constitution, while inexorably committed

towards the protection of the working class from exploitation and unfair treatment,
nevertheless mandates the policy of social justice so as to strike a balance between an

avowed predilection for labor, on the one hand, and the maintenance of legal rights of
capital, the proverbial hen that lays the golden egg, on the other. Indeed, we should not be
unmindful of the legal norm that justice is in every case for the deserving, to be dispensed
with in light of established facts, the applicable law, and existing jurisprudence. 80
WHEREFORE, the instant petition is GRANTED. The Decision dated November 23,
2001 and Resolution dated July 23, 2002 of the Court of Appeals in CA-G.R. SP No.
64581 together with the Decision dated December 27, 2000 of the National Labor
Relations Commission are REVERSED and SET ASIDE. The complaint of private
respondent Amalia P. Kawada is DISMISSED.
SO ORDERED.
Ynares-Santiago, Chico-Nazario, Nachura and Reyes, JJ., concur.

SECOND DIVISION
[G.R. No. 187605. April 13, 2010.]
TECHNOL EIGHT PHILIPPINES CORPORATION, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION AND DENNIS
AMULAR, respondents.

DECISION

BRION, J :
p

For resolution is the present Petition for Review on Certiorari 1 addressing the decision 2
and resolution 3 of the Court of Appeals (CA) of November 18, 2008 and April 17, 2009,
respectively, in CA-G.R. SP No. 100406. 4
THE ANTECEDENTS
The facts are summarized below.
The petitioner Technol Eight Philippines Corporation (Technol), located at 127 East Main
Avenue, Laguna Technopark, Bian, Laguna, manufactures metal parts and motor

vehicle components. It hired the respondent Dennis Amular (Amular) in March 1998 and
assigned him to Technol's Shearing Line, together with Clarence P. Ducay (Ducay).
Rafael Mendoza (Mendoza) was the line's team leader.
On April 16, 2002 at about 5:30 p.m., Mendoza went to the Surf City Internet Caf in
Balibago, Sta. Rosa, Laguna. As Mendoza was leaving the establishment, he was
confronted by Amular and Ducay who engaged him in a heated argument regarding their
work in the shearing line, particularly Mendoza's report to Avelino S. De Leon, Jr. (De
Leon), Technol's Production Control and Delivery (PCD) assistant supervisor, about
Amular's and Ducay's questionable behavior at work. The heated argument resulted in a
fistfight that required the intervention of the barangay tanods in the area.
Upon learning of the incident, Technol's management sent to Amular and Ducay a notice
of preventive suspension/notice of discharge dated May 18, 2002 5 advising them that
their fistfight with Mendoza violated Section 1-k of Technol's Human Resource
Department (HRD) Manual. The two were given forty-eight (48) hours to explain why no
disciplinary action should be taken against them for the incident. They were placed under
preventive suspension for thirty (30) days, from May 19, 2002 to June 17, 2002 for
Ducay, and May 21, 2002 to June 20, 2002 for Amular. Amular submitted a written
statement on May 20, 2002. 6
TCAScE

Thereafter, Amular received a notice dated June 8, 2002 7 informing him that Technol
management will conduct an administrative hearing on June 14, 2002. He was also given
two (2) days to respond in writing to the statements attached to and supporting the notice.
A day before the hearing or on June 13, 2002, Amular filed a complaint for illegal
suspension/constructive dismissal with a prayer for separation pay, backwages and
several money claims, against Technol. Amular failed to attend the administrative
hearing. On July 4, 2002, Technol sent him a notice of dismissal. 8
Before the Labor Arbiter, Amular alleged that in the afternoon of April 16, 2002, while
he and his co-employee Ducay were walking around the shopping mall in Balibago, Sta.
Rosa, Laguna, they "incidentally" saw Mendoza with whom they wanted to discuss some
personal matters. When they approached Mendoza, the latter raised his voice and asked
what they wanted from him; Amular asked Mendoza what the problem was because
Mendoza appeared to be always angry at him (Amular). Mendoza instead challenged
Amular and Ducay to a fistfight and then punched Amular who punched Mendoza in
return. Thereafter, a full-blown fistfight ensued until the barangay tanods in the area
pacified the three.
Amular further alleged that he was asked by his immediate supervisor to submit a report
on the incident, which he did on April 18, 2002. 9 Subsequently, Amular, Mendoza and
Ducay were called by Technol management to talk to each other and to settle their
differences; they agreed and settled their misunderstanding.

THE COMPULSORY ARBITRATION DECISIONS

On November 18, 2003, Executive Labor Arbiter Salvador V. Reyes rendered a decision
10 finding that Amular's preventive suspension and subsequent dismissal were illegal. He
ruled that Amular's preventive suspension was based solely on unsubscribed written
statements executed by Mendoza, Rogelio R. Garces and Mary Ann Palma (subscribed
only on August 8, 2002) and that Mendoza, Amular and Ducay had settled their
differences even before Amular was placed under preventive suspension. With respect to
Amular's dismissal, the Arbiter held that Technol failed to afford him procedural due
process since he was not able to present his side because he had filed a case before the
National Labor Relations Commission (NLRC) at the time he was called to a hearing;
Technol also failed to substantiate its allegations against Amular; the fistfight occurred
around 200 to 300 meters away from the work area and it happened after office hours.
Arbiter Reyes awarded Amular separation pay (since he did not want to be reinstated),
backwages, 13th month pay, service incentive leave pay and attorney's fees in the total
amount of P158,987.70.
Technol appealed to the NLRC. In its decision promulgated on March 30, 2005, 11 the
NLRC affirmed the labor arbiter's ruling. It found that Amular was unfairly treated and
subjected to discrimination because he was the only one served with the notice to explain
and placed under preventive suspension; his co-employee Ducay who was also involved
in the incident was not. Technol moved for reconsideration, but the NLRC denied the
motion in a resolution rendered on May 30, 2007. 12 Technol thereafter sought relief
from the CA through a petition for certiorari under Rule 65 of the Rules of Court. 13
ScaEIT

THE CA DECISION
In its decision promulgated on November 18, 2008, the CA found no grave abuse of
discretion on the part of the NLRC when it affirmed the labor arbiter's ruling that Amular
was illegally dismissed. While the appellate court noted that Amular was dismissed on
the ground of serious misconduct, a just cause for employee dismissal under the Labor
Code, 14 it opined that Technol failed to comply with the jurisprudential guidelines that
misconduct warranting a dismissal: (1) must be serious; (2) must relate to the
performance of the employees duties; and (3) must show that the employee has become
unfit to continue working for the employer. 15
The appellate court pointed out that the mauling incident occurred outside the company
premises and after office hours; it did not in any manner disrupt company operations nor
pose a threat to the safety or peace of mind of Technol workers; neither did it cause
substantial prejudice to the company. It explained that although it was not condoning
Amular's misconduct, it found that "the penalty of dismissal imposed by Technol on
Amular was too harsh and evidently disproportionate to the act committed." 16 The CA
denied the motion for reconsideration Technol subsequently filed; 17 hence, the present
petition. 18

THE PETITION
Technol posits that the CA gravely erred in ruling that Amular was illegally dismissed,
contending that Amular was discharged for violation of Section 1-k of its HRD Manual
which penalizes the commission of a crime against a co-employee. It submits that Section
1-k of the HRD Manual is a reasonable company rule issued pursuant to its management
prerogative. It maintains that the case should have been examined from the perspective of
whether the company rule is reasonable and not on the basis of where and when the act
was committed, or even whether it caused damage to the company. It adds that the
manual does not distinguish whether the crime was committed inside or outside work
premises or during or after office hours. It insists that if the rule were otherwise, any
employee who wishes to harm a co-employee can just wait until the co-employee is
outside the company premises to inflict harm upon him, and later argue that the crime
was committed outside work premises and after office hours. It submits that the matter
assumes special and utmost significance in this case because Amular inflicted physical
injuries on a supervisor. In any event, Technol argues that even if the misconduct was
committed outside company premises, the perpetrator can still be disciplined as long as
the offense was work-related, citing Oania v. NLRC 19 and Tanala v. NLRC 20 in support
of its position.
Technol bewails the CA's appreciation of the implication of Amular's misconduct in the
workplace, especially the court's observation that it did not cause damage to the company
because it did not disrupt company operation, that it did not create a hostile environment
inside the company, and that the fight was "nipped in the bud by the timely intervention of
those who saw the incident." 21 Technol insists that it had to order Amular's dismissal in
order to uphold the integrity of the company rules and to avoid the erosion of discipline
among its employees. Also, it disputes the CA's conclusion that the fact that Amular's
liability should be mitigated because the fight "was nipped in the bud." It submits that
Mendoza had already sustained grave injuries when the mauling was stopped.
IEAacT

Further, Technol maintains that the CA gravely erred in going beyond the issues
submitted to it, since the NLRC decision only declared Amular's dismissal illegal on the
ground that he was the only one subjected to disciplinary action and that the company
merely relied on the written statements of Amular's co-employees.
On the rejection by the CA of the statements of Amular's co-employees regarding the
incident, Technol contends that the statements of the witnesses, together with Amular's
admission, constitute substantial evidence of guilt. It points out that the statement of
Mendoza on the matter submitted during the company investigation and before the labor
arbiter was not a "stand alone" statement; Mendoza's statement was corroborated by the
statements of Rogelio R. Garces and Mary Ann Palma, verified under oath in the reply 22
it submitted to the arbiter. The statements were all in their handwriting, indicating that
they were not pro forma or prepared on command; a medical certificate 23 and a
barangay report 24 were likewise submitted.

Technol likewise disputes the NLRC's conclusion that Amular was discriminated against
and unfairly treated because he was the only one preventively suspended after the
mauling incident. It maintains that from the records of the case and as admitted by
Amular himself in his position paper, 25 his co-employee Ducay was also preventively
suspended. 26 That Mendoza was not similarly placed under preventive suspension was
considered by Technol as an exercise of its management prerogative, since the
circumstances surrounding the incident indicated the existence of a reasonable threat to
the safety of Amular's co-employees and that Mendoza appeared to be the victim of
Amular's and Ducay's assault.
THE CASE FOR AMULAR
In his Comment filed on August 12, 2009, 27 Amular asks that the petition be dismissed
for "utter lack of merit." He admits that the mauling incident happened, but claims
however that on April 18, 2002, the Technol's management called Mendoza, Ducay, and
him to a meeting, asked them to explain their sides and thereafter requested them to settle
their differences; without hesitation, they agreed to settle and even shook hands
afterwards. He was therefore surprised that on May 18, 2002, he received a memorandum
from Technol's HRD charging him and his co-employee Ducay for the incident. Without
waiting for an explanation, Technol's management placed him under preventive
suspension, but not Ducay. Adding insult to injury, when Amular followed up his case
while on preventive suspension, he was advised by the HRD manager to simply resign
and accept management's offer of P22,000.00, which offer was reiterated during the
mandatory conference before the labor arbiter.
Amular particularly laments that his employment was terminated while the constructive
dismissal case he filed against the company was still pending. He posits that his
employment was terminated first before he was informed of the accusations leveled
against him an indication of bad faith on the part of Technol.
Amular asks: if it were true that the mauling incident was a serious offense under
company policy, why did it take Technol a month to give him notice to explain the
mauling incident? He submits that the memorandum asking him to explain was a mere
afterthought; he was dismissed without giving him the benefit to be informed of the true
nature of his offense, thus denying him his right to be heard.
HSAcaE

Finally, Amular questions the propriety of the present petition contending that it only
raises questions of fact, in contravention of the rule that only questions of law may be
raised in a petition for review on certiorari. 28 He points out that the findings of facts of
the labor tribunals and the CA are all the same and therefore must be given respect, if not
finality. 29
THE RULING OF THE COURT

The Procedural Issue

We find no procedural impediment to the petition. An objective reading of the petition
reveals that Technol largely assails the correctness of the conclusions drawn by the CA
from the set of facts it considered. The question therefore is one of law and not of fact, as
we ruled in Cucueco v. Court of Appeals. 30 Thus, while there is no dispute that a fight
occurred between Amular and Ducay, on the one hand, and Mendoza, on the other, the
CA concluded that although Amular committed a misconduct, it failed to satisfy
jurisprudential standards to qualify as a just cause for dismissal the conclusion that
Technol now challenges. We see no legal problem, too, in wading into the factual
records, as the tribunals below clearly failed to properly consider the evidence on record.
This is grave abuse of discretion on the part of the labor tribunals that the CA failed to
appreciate.
The Merits of the Case
The CA misappreciated the true nature of Amular's involvement in the mauling
incident. Although it acknowledged that Amular committed a misconduct, it did not
consider the misconduct as work-related and reflective of Amular's unfitness to continue
working for Technol. The appellate court's benign treatment of Amular's offense was
based largely on its observation that the incident happened outside the company premises
and after working hours; did not cause a disruption of work operations; and did not result
in a hostile environment in the company. Significantly, it did not condone Amular's
infraction, but it considered that Amular's dismissal was a harsh penalty that is
disproportionate with his offense. It found support for this liberal view from the
pronouncement of the Court in Almira v. B.F. Goodrich Philippines, Inc., 31 that "where
a penalty less punitive would suffice, whatever missteps may be committed by labor ought
not to be visited with a consequence so severe."
The record of the case, however, gives us a different picture. Contrary to the CA's
perception, we find a work-connection in Amular's and Ducay's assault on Mendoza. As
the CA itself noted, 32 the underlying reason why Amular and Ducay confronted
Mendoza was to question him about his report to De Leon Technol's PCD assistant
supervisor regarding the duo's questionable work behavior. The motivation behind the
confrontation, as we see it, was rooted on workplace dynamics as Mendoza, Amular and
Ducay interacted with one another in the performance of their duties.
AIHECa

The incident revealed a disturbing strain in Amular's and Ducay's characters the urge
to get even for a perceived wrong done to them and, judging from the circumstances,
regardless of the place and time. The incident could very well have happened inside
company premises had the two employees found time to confront Mendoza in the
workplace as they intimated in their written statements. 33 Having been the subject of a
negative report regarding his work must have rankled on Amular that he resolved to do
something about it; thus, he confronted Mendoza.

From the records, Ducay appeared to have cooperated with Amular in the violent
confrontation with Mendoza. Ducay, however, resigned on June 7, 2002 a week before
the filing of the complaint. 34 Hence, Technol did not act against him a move that is
within its prerogative to make.
In an obvious effort to mitigate his involvement in the mauling incident, Amular claimed
in the administrative proceedings that while he and Ducay were walking around the
shopping mall in Balibago, Sta. Rosa, Laguna, they "incidentally" saw their co-employee
Mendoza "with whom they wanted to clear some personal matters." 35 We find this claim
a clear distortion of what actually happened. Again, based on their written statements, 36
Amular and Ducay purposely set out for the Balibago commercial area on April 16, 2002
looking for Mendoza. It was not an incidental or casual encounter. They sought Mendoza
out and confronted him regarding what they perceived as Mendoza's negative attitude
towards them or "pamamarako" as Mendoza described it. 37 Considering the subject
Amular and Ducay raised with Mendoza, it is not surprising that they had a heated verbal
exchange (mostly between Amular and Mendoza) that deteriorated into a fistcuff fight,
with Mendoza at the losing end as he suffered injuries from the blows he received.
Amular and Ducay point to Mendoza as the proximate cause of the fight because he
challenged them to a one-on-one (isa-isa lang) bout. 38 Looking back at the reason why
Amular and Ducay were at the mall in the first place, this attributed causation hardly
makes sense. To reiterate, they were purposely there to confront Mendoza about their
work-related problem. They waited for him at the place where they expected him to be.
When Mendoza appeared, they accosted him and put into motion the entire sorry
incident.
Under these circumstances, Amular undoubtedly committed a misconduct or exhibited
improper behavior that constituted a valid cause for his dismissal under the law 39 and
jurisprudential standards. 40 The circumstances of his misdeed, to our mind, rendered
him unfit to continue working for Technol; guilt is not diminished by his claim that
Technol's management called the three of them to a meeting, and asked them to explain
their sides and settle their differences, which they did. 41 Mendoza significantly denied
the alleged settlement, maintaining that while they were summoned by De Leon after the
incident, he could not shake hands and settle with Amular and Ducay since they did not
even apologize or ask forgiveness for what they did. 42 We do not find Mendoza's denial
of Amular's claim unusual as Mendoza would not have stood his ground in this case if a
settlement had previously been reached. That a meeting had taken place does not appear
disputed, but a settlement cannot be inferred simply because a meeting took place.
Neither do we believe that Amular was discriminated against because he was not the only
one preventively suspended. As the CA itself acknowledged, Ducay received his notice
of preventive suspension/notice of charge 43 on May 19, 2002 while Amular received his
on May 21, 2002. These notices informed them that they were being preventively
suspended for 30 days from May 19, 2002 to June 17, 2002 for Ducay, and May 21, 2002

for Amular. 44

HSDaTC

Thus, Amular was not illegally dismissed; he was dismissed for cause.
The Due Process Issue
The labor arbiter ruled that Technol failed to afford Amular procedural due process, since
he was not able to present his side regarding the incident; at the time he was called to a
hearing, he had already filed the illegal dismissal complaint. 45 The NLRC, on the other
hand, held that the memorandum terminating Amular's employment was a mere
formality, an afterthought designed to evade company liability since Amular had already
filed an illegal dismissal case against Technol. 46
We disagree with these conclusions. The notice of preventive suspension/notice of
discharge served on Amular and Ducay required them to explain within forty-eight (48)
hours why no disciplinary action should be taken against them for their involvement in
the mauling incident. 47 Amular submitted two written statements: the first received by
the company on May 19, 2002 48 and the other received on May 20, 2002. 49 On June 8,
2002, Technol management sent Amular a memorandum informing him of an
administrative hearing on June 14, 2002 at 10:00 a.m., regarding the charges against him.
50 At the bottom left hand corner of the memorandum, the following notation appears:
"accept the copy of notice but refused to receive, he will study first." A day before the
administrative hearing or on June 13, 2002, Amular filed the complaint for illegal
suspension/dismissal 51 and did not appear at the administrative hearing. On July 4,
2002, the company sent Amular a notice of dismissal. 52
What we see in the records belie Amular's claim of denial of procedural due process. He
chose not to present his side at the administrative hearing. In fact, he avoided the
investigation into the charges against him by filing his illegal dismissal complaint ahead
of the scheduled investigation. Under these facts, he was given the opportunity to be
heard and he cannot now come to us protesting that he was denied this opportunity. To
belabor a point the Court has repeatedly made in employee dismissal cases, the essence
of due process is simply an opportunity to be heard; it is the denial of this opportunity
that constitutes violation of due process of law. 53
In view of all the foregoing, we find the petition meritorious.
WHEREFORE, premises considered, we hereby GRANT the petition. The assailed
decision and resolution of the Court of Appeals are REVERSED and SET ASIDE. The
complaint for illegal dismissal is DISMISSED for lack of merit. Costs against
respondent AMULAR.
aScIAC

SO ORDERED.
Carpio, Del Castillo, Perez and Mendoza, * JJ., concur.

THIRD DIVISION
[G.R. No. 160339. March 14, 2008.]
OSCAR P. GARCIA and ALEX V. MORALES, petitioners, vs.
MALAYANINSURANCE CO., INC. and NATIONAL LABOR
RELATIONS COMMISSION, * respondents.

DECISION

AUSTRIA-MARTINEZ, J :
p

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
Decision 1 of the Court of Appeals (CA), which upheld the validity of the termination of
their employment; and the October 9, 2003 CA Resolution 2 which denied their motion
for reconsideration.
DaAISH

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 AssociationFFW (MEA-FFW).
On December 29, 1999, private respondent issued to petitioner Garcia an Inter-Office
Memorandum 3 giving him 24 hours to explain his involvement in the theft of company
property, consisting of diskettes, logbooks and other documents of the Risk Analysis
Section, and to return the same. Private respondent also issued to petitioner Morales a
similar memorandum but with additional instruction for his preventive suspension for 30
days pending investigation. 4
In their separate written explanations, petitioners denied their involvement in the theft
and countered that the filing of the charges against them was a form of harassment
against their union MEA-FFW, which was in a deadlock with respondent in the ongoing
negotiations over the terms of their collective bargaining agreement. 5
After the conduct of an informal administrative hearing, 6 private respondent notified

petitioner Garcia, through a letter dated February 28, 2000, of the termination of his
employment, thus:
caADIC

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.
cCHITA

The above acts constitute serious misconduct and a violation of the Company's
Code of Ethics which, under Article 282 of the Labor Code, as amended, justify
your dismissal from the Company. In view thereof, we regret to inform you that
you are considered dismissed from your employment effective immediately. 7

Petitioner Morales was also served a similar notice of termination but on the following
grounds:
After a painstaking evaluation of the pieces of documentary and testimonial
evidence presented, the Investigating Committee concluded that there is reason
to believe that you participated in the theft of the subject Company properties
when you:
1)Conspired with Mr. Garcia in attempting to cover-up the loss of the subject
diskettes and logbook; and
2)Deliberately withheld information from the Company regarding the
whereabouts of said Company properties.
IDAaCc

A review of your 201 File likewise revealed that you have been previously
suspended for tampering receipts which you presented for reimbursement by the
Company. You will therefore realize that when it comes to dishonesty, you are
not a first offender.
The above recent acts constitute serious misconduct and violation of the
Company's Code of Ethics which, under Article 282 of the Labor Code, as
amended, justify your dismissal from the Company. In view thereof, we regret
to inform you that you are considered dismissed from your employment
effective immediately. 8

Petitioners filed before the Labor Arbiter (LA) a Complaint for illegal dismissal, illegal

suspension, unfair labor practice, damages and attorney's fees. 9 The LA dismissed their
Complaint in a Decision 10 dated November 20, 2000.
HTCSDE

Petitioners appealed to the National Labor Relations Commission (NLRC), which issued
a Resolution 11 dated November 29, 2001, affirming the November 20, 2000 LA
Decision. The NLRC also denied petitioners' Motion for Reconsideration in a Resolution
12 dated February 28, 2002.
Petitioners filed a Petition for Certiorari with the CA, which dismissed it in the March
13, 2003 Decision 13 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:

aECTcA

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 . . . .
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, . . . .
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.
EIaDHS

IV
The public respondent court committed grave abuse of discretion amounting to
lack and/or excess of jurisdiction in denying petitioners' motion for
reconsideration without resolving the legal issues raised. 14

Resolution of the foregoing issues entails an inquiry into the facts, a re-evaluation of the
credibility of the witnesses and a recalibration of the evidence presented. Ordinarily, the
Court does not undertake these functions, for it defers to the expertise of the CA, NLRC
and LA, and accords great weight to their factual findings, especially when these are

unanimous. Thus, only their errors of law are reviewable by the Court in a petition for
review on certiorari under Rule 45.
HIaSDc

However, under extraordinary circumstances, the Court delves into the factual assessment
of the forums below when it is shown that (1) the findings are not supported by evidence;
(2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when
there is grave abuse of discretion; (4) when the judgment is based on a misapprehension
of facts; (5) when the findings of fact are conflicting; (6) when in making its findings, the
CA went beyond the issues of the case, or its findings are contrary to the admissions of
both the appellant and the appellee; (7) when the findings are contrary to the trial court;
(8) when the findings are conclusions without citation of specific evidence on which they
are based; (9) when the facts set forth in the petition as well as in the petitioner's reply
briefs are not disputed by the respondent; and (10) when the findings of fact are premised
on the supposed absence of evidence and contradicted by the evidence on record. 15
To determine whether any of these extraordinary circumstances obtains in the present
case, a preliminary assessment of the evidence upon which the CA, NLRC and LA based
their factual findings cannot be avoided.
HCaEAT

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.
EIaDHS

Tellingly, [petitioner] Garcia never denied, much less refuted, Umila's positive
testimony that he (Garcia) admitted that he has in his possession the missing
diskettes and logbooks. The same holds true as regards [petitioner] Morales who
likewise never denied, much less refuted, De Guzman's first person testimony of

his (Morales') complicity in the cover-up of the wrongdoing of [petitioner]

Garcia. 16

The NLRC sustained the findings of the LA. It held that the LA correctly relied on the
affidavits of Umila and De Guzman whose detailed account of how petitioners committed
serious misconduct was never refuted by the latter. 17 The NLRC found these witnesses
credible because they were not shown to hold any "grudge against [petitioners], much
more because said witnesses are ordinary members of the union while those being
charged are union officers, hence, with moral ascendancy over them." 18

While the CA did not elaborate on its view, it bound itself by the concurrent factual
findings of the LA and NLRC for it found them to be supported by evidence. 19
Impugning the stand of the CA, petitioners argue that the affidavits of Umila and De
Guzman have no probative value for neither had direct knowledge of the taking of private
respondent's properties: first, Umila merely stated that on December 24, 1998, petitioner
Garcia and another employee, Jun Bato, asked about these properties and that she told
them that said properties were on top of her office table; and second, De Guzman merely
described how these properties were recovered. 20
Perusal of the affidavits in question does not bear out petitioners' claim. Umila also stated
that when she confronted petitioner Garcia about the lost properties, the latter admitted
having them in his possession. 21 De Guzman's statement detailed the effort to bring said
properties back into the premises of private respondent and to make it appear that these
were merely misplaced. 22 Thus, without going into the veracity of the statements in said
affidavits, the Court cannot agree that no direct evidence was presented on the theft of the
properties or the cover-up thereof.
IDTHcA

However, it is noted that while the participation of petitioner Garcia in said theft and
cover-up is detailed in said affidavit, the same cannot be said of the connection of
Morales to said incidents. To recall, petitioner Morales was dismissed for conspiring in
the cover-up of the theft. However, it appears that the only evidence of petitioner
Morales's involvement in the cover-up is the statement of De Guzman that it was said
petitioner who instructed him to get a parcel from a third person. The statement of De
Guzman on this particular matter is reproduced below:
3.Noon Disyembre 29, 1999 bandang alas-kuwatro kuwarenta y singko ng
hapon (4:45 p.m.), ako ay kasalukuyang naghuhugas ng mga plato sa Comfort
Room ng 5th floor ng ETY Building nang ako ay lapitan ni Alex Morales ng
Risk Analysis Department at inutusang pumunta sa Farmacia Rubi, dito rin sa
Quintin Paredes, Binondo para kunin ang isang bagay sa lalaking may bigote.

23

By no means can it be extrapolated from the foregoing statement that petitioner Morales
knew the contents of the parcel whether or not these were the stolen company
properties or the purpose for getting the parcel from a third party. In fact, the
succeeding paragraphs in the statement disclose that it was that third party who instructed
De Guzman to call petitioner Garcia, who, in turn, disclosed the nature of the contents of
the parcel and gave out instruction on what steps to take to bring said parcel back into the
office building and to make it appear that it was just misplaced. Nowhere does it appear
that petitioner Morales had knowledge of what was to happen or had participation in it. It
is difficult then to connect petitioner Morales to the theft or the attempt to cover it up
merely on the basis of his having instructed De Guzman to get a parcel from another
person.
IHaSED

Therefore, on the specific culpability of petitioner Morales, the Court finds the affidavit
of De Guzman so lacking in crucial detail that the same cannot serve as basis for the
finding that said petitioner conspired in the theft of private respondent's properties or the
cover up thereof. 24 The Court reverses the factual findings of the CA, NLRC and LA,
for the evidence on which their findings were based was too tenuous to justify the
termination of petitioner Morales's employment.
Nonetheless, no bad faith can be attributed to private respondent in dismissing petitioner
Morales despite such scant evidence. Its error in the assessment of the available evidence
cannot be equated with bad faith as there is no evidence that it was animated by malice or
ill motive. Hence, its action in dismissing petitioner Morales may have been illegal, but
did not amount to unfair labor practice.
DSHTaC

Moving on to the other issues pertaining to petitioner Garcia, he insists that, contrary to
the observation of the CA, he controverted the affidavits presented by private respondent,
not only by denying the averments therein, but also by presenting counter evidence
consisting of an entry in the guard's logbook and the affidavit of the guard-on-duty, Joey
Limbo. 25 Petitioner explains that it took time for him to present these documents,
because private respondent had tried to conceal them and was compelled to present the
same before the LA 26 only when he (petitioner Garcia) demanded to see them. 27
The Court is not convinced that by said logbook entry and affidavit of Joey Limbo,
petitioner Garcia effectively controverted the existing evidence against him. The logbook
entry merely reports that De Guzman recovered the stolen properties from the fifth floor
of the office building. 28 The affidavit of Joey Limbo merely repeated the logbook entry.
29 That these documents do not disclose any further detail is understandable, for as
explained by De Guzman himself in his affidavit, he merely reported the recovery of the
stolen properties to Joey Limbo and did not elaborate on the circumstances thereof, but
when he was confronted by private respondent the following day, it was then that he
divulged the details leading to the recovery of said properties. 30
Verily, the Court finds no indication that the CA misappreciated the evidence when it

affirmed the findings of the NLRC and LA against petitioner Garcia.

HTCIcE

Finally, petitioners complain that they were denied due process when they were not
furnished a copy of the evidence against them or the minutes of the investigation. 31
It is oft repeated that in administrative proceedings, due process is served by the mere
fact that each party is afforded an opportunity to air its side, 32 not necessarily through
verbal argumentation, but also through pleadings in which the parties may explain their
side of the controversy. 33 It is of record that petitioners were informed of the charges
against them and were given the opportunity to present their defense, not just in the
administrative investigation, but also in the proceedings before the LA and NLRC. The
requirements of due process were more than adequately satisfied.
CacISA

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 PARTLYGRANTED. 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.
TcIAHS

No costs.
SO ORDERED.
Ynares-Santiago, Chico-Nazario, Nachura and Reyes, JJ., concur.

SECOND DIVISION
[G.R. No. 181974. February 1, 2012.]

LYNVIL FISHING ENTERPRISES, INC. and/or ROSENDO S. DE

BORJA, petitioners, vs. ANDRES G. ARIOLA, JESSIE D.
ALCOVENDAS, JIMMY B. CALINAO AND LEOPOLDO G.
SEBULLEN, respondents.

DECISION

PEREZ, J :
p

Before the Court is a Petition for Review on Certiorari 1 of the Decision 2 of the
Fourteenth Division of the Court of Appeals in CA-G.R. SP No. 95094 dated 10
September 2007, granting the Writ of Certiorari prayed for under Rule 65 of the 1997
Revised Rules of Civil Procedure by herein respondents Andres G. Ariola, Jessie D.
Alcovendas, Jimmy B. Calinao and Leopoldo Sebullen thereby reversing the Resolution
of the National Labor Relations Commission (NLRC). The dispositive portion of the
assailed decision reads:
WHEREFORE, premises considered, the Decision dated March 31, 2004
rendered by the National Labor Relations Commission is hereby REVERSED
and SET ASIDE. In lieu thereof, the Decision of the Labor Arbiter is hereby
REINSTATED, except as to the award of attorney's fees, which is ordered
DELETED. 3

The version of the petitioners follows:

1.Lynvil Fishing Enterprises, Inc. (Lynvil) is a company engaged in deep-sea fishing,
operating along the shores of Palawan and other outlying islands of the Philippines. 4 It is
operated and managed by Rosendo S. de Borja.
2.On 1 August 1998, Lynvil received a report from Romanito Clarido, one of its
employees, that on 31 July 1998, he witnessed that while on board the company vessel
Analyn VIII, Lynvil employees, namely: Andres G. Ariola (Ariola), the captain; Jessie D.
Alcovendas (Alcovendas), Chief Mate; Jimmy B. Calinao (Calinao), Chief Engineer;
Ismael G. Nubla (Nubla), cook; Elorde Baez (Baez), oiler; and Leopoldo D. Sebullen
(Sebullen), bodegero, conspired with one another and stole eight (8) tubs of "pampano"
and "tangigue" fish and delivered them to another vessel, to the prejudice of Lynvil. 5
3.The said employees were engaged on a per trip basis or "por viaje" which terminates at
the end of each trip. Ariola, Alcovendas and Calinao were managerial field personnel
while the rest of the crew were field personnel. 6

4.By reason of the report and after initial investigation, Lynvil's General Manager
Rosendo S. De Borja (De Borja) summoned respondents to explain within five (5) days
why they should not be dismissed from service. However, except for Alcovendas and
Baez, 7 the respondents refused to sign the receipt of the notice.
5.Failing to explain as required, respondents' employment was terminated.
6.Lynvil, through De Borja, filed a criminal complaint against the dismissed employees
for violation of P.D. 532, or the Anti-Piracy and Anti-Highway Robbery Law of 1974
before the Office of the City Prosecutor of Malabon City. 8
DHSACT

7.On 12 November 1998, First Assistant City Prosecutor Rosauro Silverio found
probable cause for the indictment of the dismissed employees for the crime of qualified
theft 9 under the Revised Penal Code.
On the other hand, the story of the defense is:
1.The private respondents were crew members of Lynvil's vessel named Analyn VIII. 10
2.On 31 July 1998, they arrived at the Navotas Fishport on board Analyn VIII loaded
with 1,241 baeras of different kinds of fishes. These baeras were delivered to a
consignee named SAS and Royale. 11
The following day, the private respondents reported back to Lynvil office to inquire about
their new job assignment but were told to wait for further advice. They were not allowed
to board any vessel. 12
3.On 5 August 1998, only Alcovendas and Baez received a memorandum from De
Borja ordering them to explain the incident that happened on 31 July 1998. Upon being
informed about this, Ariola, Calinao, Nubla and Sebullen went to the Lynvil office.
However, they were told that their employments were already terminated. 13
Aggrieved, the employees filed with the Arbitration Branch of the National Labor
Relations Commission-National Capital Region on 25 August 1998 a complaint for
illegal dismissal with claims for backwages, salary differential reinstatement, service
incentive leave, holiday pay and its premium and 13th month pay from 1996 to 1998.
They also claimed for moral, exemplary damages and attorney's fees for their dismissal
with bad faith. 14
They added that the unwarranted accusation of theft stemmed from their oral demand of
increase of salaries three months earlier and their request that they should not be required
to sign a blank payroll and vouchers. 15
On 5 June 2002, Labor Arbiter Ramon Valentin C. Reyes found merit in complainants'
charge of illegal dismissal. 16 The dispositive portion reads:

WHEREFORE, premises considered, judgment is hereby rendered finding that

complainants were illegally dismissed, ordering respondents to jointly and
severally pay complainants (a) separation pay at one half month pay for every
year of service; (b) backwages; (c) salary differential; (d) 13th month pay; and
(e) attorney's fees, as follows:
"1)

"2)

"3)

"4)

"5)

Andres Ariola

Backwages
(P6,500.00 x 36 = P234,000.00)
Separation Pay P74,650.00
13th Month Pay P6,500.00

Jessie Alcovendas
Backwages
(P5,148.00 x 36 = P195,328.00)
Separation Pay P44,304.00
13th Month Pay 5,538.00
Salary Differential 1,547.52

Jimmy Calinao

Backwages
(P6,500.00 x 36 = P234,000.00)
Separation Pay 55,250.00
13th Month Pay P6,500.00

Leopoldo Sebullen

Backwages
(P4,290.00 x 36 = P154,440.00)
Separation Pay P44,073.00
13th Month Pay 2,473.12
Salary Differential 4,472.00

Ismael Nubla

Backwages
Separation Pay P58,149.00
13th Month Pay 2,473.12
Salary Differential P5,538.00
P265, 28.12 *

P234,000.00

P325,250.00

P195,328.00

P246,717.52

P234,000.00

P295,700.00

P154,440.00

P208,455.12

P199,640.12

TOTAL P1,341,650.76
===========

All other claims are dismissed for lack of merit." 17

The Labor Arbiter found that there was no evidence showing that the private respondents
received the 41 baeras of "pampano" as alleged by De Borja in his reply-affidavit; and
that no proof was presented that the 8 baeras of pampano [and tangigue] were missing
at the place of destination. 18
The Labor Arbiter disregarded the Resolution of Assistant City Prosecutor Rosauro
Silverio on the theft case. He reasoned out that the Labor Office is governed by different
rules for the determination of the validity of the dismissal of employees. 19
The Labor Arbiter also ruled that the contractual provision that the employment
terminates upon the end of each trip does not make the respondents' dismissal legal. He
pointed out that respondents and Lynvil did not negotiate on equal terms because of the
moral dominance of the employer. 20
The Labor Arbiter found that the procedural due process was not complied with and that
the mere notice given to the private respondents fell short of the requirement of "ample
opportunity" to present the employees' side. 21
On appeal before the National Labor Relations Commission, petitioners asserted that
private respondents were only contractual employees; that they were not illegally
dismissed but were accorded procedural due process and that De Borja did not commit
bad faith in dismissing the employees so as to warrant his joint liability with Lynvil. 22
On 31 March 2004, the NLRC reversed and set aside the Decision of the Labor Arbiter.
The dispositive portion reads:
WHEREFORE, judgment is hereby rendered REVERSING AND SETTING
ASIDE the Decision of the Labor Arbiter a quo and a new one entered
DISMISSING the present complaints for utter lack of merit;
However as above discussed, an administrative fine of PhP5,000.00 for each
complainant, Andres Ariola, Jessie Alcovendas, Jimmy Canilao, Leopoldo
Sebullen and Ismael Nobla or a total of PhP25,000.00 is hereby awarded. 23

The private respondents except Elorde Baez filed a Petition for Certiorari 24 before the
Court of Appeals alleging grave abuse of discretion on the part of NLRC.
The Court of Appeals found merit in the petition and reinstated the Decision of the Labor
Arbiter except as to the award of attorney's fees. The appellate court held that the
allegation of theft did not warrant the dismissal of the employees since there was no
evidence to prove the actual quantities of the missing kinds of fish loaded to Analyn VIII.

25 It also reversed the finding of the NLRC that the dismissed employees were merely
contractual employees and added that they were regular ones performing activities which
are usually necessary or desirable in the business and trade of Lynvil. Finally, it ruled that
the two-notice rule provided by law and jurisprudence is mandatory and non-compliance
therewith rendered the dismissal of the employees illegal.
The following are the assignment of errors presented before this Court by Lynvil:
I
THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO
CONSIDER THE ESTABLISHED DOCTRINE LAID DOWN IN NASIPIT
LUMBER COMPANY V. NLRC HOLDING THAT THE FILING OF A
CRIMINAL CASE BEFORE THE PROSECUTOR'S OFFICE CONSTITUTES
SUFFICIENT BASIS FOR A VALID TERMINATION OF EMPLOYMENT
ON THE GROUNDS OF SERIOUS MISCONDUCT AND/OR LOSS OF
TRUST AND CONFIDENCE.
II
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
TERMINATION OF RESPONDENTS' EMPLOYMENT WAS NOT
SUPPORTED BY SUBSTANTIAL EVIDENCE.
cSITDa

III
THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO
CONSIDER THAT THE RESPONDENTS' EMPLOYMENT, IN ANY
EVENT, WERE CONTRACTUAL IN NATURE BEING ON A PER
VOYAGE BASIS. THUS, THEIR RESPECTIVE EMPLOYMENT
TERMINATED AFTER THE END OF EACH VOYAGE.
IV
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
RESPONDENTS WERE NOT ACCORDED PROCEDURAL DUE
PROCESS.
V
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
RESPONDENTS ARE ENTITLED TO THE PAYMENTOF THEIR MONEY
CLAIMS.
VI
THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO
CONSIDER THAT PETITIONER ROSENDO S. DE BORJA IS NOT

JOINTLY AND SEVERALLY LIABLE FOR THE JUDGMENT WHEN

THERE WAS NO FINDING OF BAD FAITH. 26

The Court's Ruling

The Supreme Court is not a trier of facts. Under Rule 45, 27 parties may raise only
questions of law. We are not duty-bound to analyze again and weigh the evidence
introduced in and considered by the tribunals below. Generally when supported by
substantial evidence, the findings of fact of the CA are conclusive and binding on the
parties and are not reviewable by this Court, unless the case falls under any of the
following recognized exceptions:
(1)When the conclusion is a finding grounded entirely on speculation, surmises
and conjectures;
(2)When the inference made is manifestly mistaken, absurd or impossible;
(3)Where there is a grave abuse of discretion;
(4)When the judgment is based on a misapprehension of facts;
(5)When the findings of fact are conflicting;
(6)When the Court of Appeals, in making its findings, went beyond the issues of
the case and the same is contrary to the admissions of both appellant and
appellee;
(7)When the findings are contrary to those of the trial court;
(8)When the findings of fact are conclusions without citation of specific
evidence on which they are based;
(9)When the facts set forth in the petition as well as in the petitioners' main and
reply briefs are not disputed by the respondents; and
(10)When the findings of fact of the Court of Appeals are premised on the
supposed absence of evidence and contradicted by the evidence on
record. (Emphasis supplied) 28

The contrariety of the findings of the Labor Arbiter and the NLRC prevents reliance on
the principle of special administrative expertise and provides the reason for judicial
review, at first instance by the appellate court, and on final study through the present
petition.
In the first assignment of error, Lynvil contends that the filing of a criminal case before
the Office of the Prosecutor is sufficient basis for a valid termination of employment
based on serious misconduct and/or loss of trust and confidence relying on Nasipit

Lumber Company v. NLRC. 29

Nasipit is about a security guard who was charged with qualified theft which charge was
dismissed by the Office of the Prosecutor. However, despite the dismissal of the
complaint, he was still terminated from his employment on the ground of loss of
confidence. We ruled that proof beyond reasonable doubt of an employee's misconduct is
not required when loss of confidence is the ground for dismissal. It is sufficient if the
employer has "some basis" to lose confidence or that the employer has reasonable ground
to believe or to entertain the moral conviction that the employee concerned is responsible
for the misconduct and that the nature of his participation therein rendered him absolutely
unworthy of the trust and confidence demanded by his position. 30 It added that the
dropping of the qualified theft charges against the respondent is not binding upon a labor
tribunal. 31
In Nicolas v. National Labor Relations Commission, 32 we held that a criminal
conviction is not necessary to find just cause for employment termination. Otherwise
stated, an employee's acquittal in a criminal case, especially one that is grounded on the
existence of reasonable doubt, will not preclude a determination in a labor case that he is
guilty of acts inimical to the employer's interests. 33 In the reverse, the finding of
probable cause is not followed by automatic adoption of such finding by the labor
tribunals.
In other words, whichever way the public prosecutor disposes of a complaint, the finding
does not bind the labor tribunal.
Thus, Lynvil cannot argue that since the Office of the Prosecutor found probable cause
for theft the Labor Arbiter must follow the finding as a valid reason for the termination of
respondents' employment. The proof required for purposes that differ from one and the
other are likewise different.
Nonetheless, even without reliance on the prosecutor's finding, we find that there was
valid cause for respondents' dismissal.
In illegal dismissal cases, the employer bears the burden of proving that the termination
was for a valid or authorized cause. 34
Just cause is required for a valid dismissal. The Labor Code 35 provides that an employer
may terminate an employment based on fraud or willful breach of the trust reposed on the
employee. Such breach is considered willful if it is done intentionally, knowingly, and
purposely, without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It must also be based on substantial evidence
and not on the employer's whims or caprices or suspicions otherwise, the employee
would eternally remain at the mercy of the employer. Loss of confidence must not be
indiscriminately used as a shield by the employer against a claim that the dismissal of an

employee was arbitrary. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee concerned is unfit to
continue working for the employer. In addition, loss of confidence as a just cause for
termination of employment is premised on the fact that the employee concerned holds a
position of responsibility, trust and confidence or that the employee concerned is
entrusted with confidence with respect to delicate matters, such as the handling or care
and protection of the property and assets of the employer. The betrayal of this trust is the
essence of the offense for which an employee is penalized. 36
Breach of trust is present in this case.

cAEDTa

We agree with the ruling of the Labor Arbiter and Court of Appeals that the quantity of
tubs expected to be received was the same as that which was loaded. However, what is
material is the kind of fish loaded and then unloaded. Sameness is likewise needed.
We cannot close our eyes to the positive and clear narration of facts of the three witnesses
to the commission of qualified theft. Jonathan Distajo, a crew member of the Analyn
VIII, stated in his letter addressed to De Borja 37 dated 8 August 1998, that while the
vessel was traversing San Nicolas, Cavite, he saw a small boat approach them. When the
boat was next to their vessel, Alcovendas went inside the stockroom while Sebullen
pushed an estimated four tubs of fish away from it. Ariola, on the other hand, served as
the lookout and negotiator of the transaction. Finally, Baez and Calinao helped in
putting the tubs in the small boat. He further added that he received P800.00 as his share
for the transaction. Romanito Clarido, who was also on board the vessel, corroborated the
narration of Distajo on all accounts in his 25 August 1998 affidavit. 38 He added that
Alcovendas told him to keep silent about what happened on that day. Sealing tight the
credibility of the narration of theft is the affidavit 39 executed by Elorde Baez dated 3
May 1999. Baez was one of the dismissed employees who actively participated in the
taking of the tubs. He clarified in the affidavit that the four tubs taken out of the
stockroom in fact contained fish taken from the eight tubs. He further stated that Ariola
told everyone in the vessel not to say anything and instead file a labor case against the
management. Clearly, we cannot fault Lynvil and De Borja when it dismissed the
employees.
The second to the fifth assignment of errors interconnect.
The nature of employment is defined in the Labor Code, thus:
Art. 280.Regular and casual employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the

employee or where the work or service to be performed is seasonal in nature

and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That any employee who has rendered at least
one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.

Lynvil contends that it cannot be guilty of illegal dismissal because the private
respondents were employed under a fixed-term contract which expired at the end of the
voyage. The pertinent provisions of the contract are:
xxx xxx xxx
1.NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain
sang-ayon sa patakarang "por viaje" na magmumula sa pagalis sa
Navotas papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa
Navotas, Metro Manila;
xxx xxx xxx
1.NA ako ay nakipagkasundo na babayaran ang aking paglilingkod sa paraang
"por viaje" sa halagang P__________ isang biyahe ng kabuuang araw .
. . . 40

Lynvil insists on the applicability of the case of Brent School, 41 to wit:

Accordingly, and since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly appears to have
been, as already observed, to prevent circumvention of the employee's right to
be secure in his tenure, the clause in said article indiscriminately and completely
ruling out all written or oral agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to the substantive
evil that the Code itself has singled out: agreements entered into precisely to
circumvent security of tenure. It should have no application to instances where a
fixed period of employment was agreed upon knowingly and voluntarily by the
parties, without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and employee dealt with each
other on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. Unless thus limited in its purview, the
law would be made to apply to purposes other than those explicitly stated by its
framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to
lead to absurd and unintended consequences.
aETDIc

Contrarily, the private respondents contend that they became regular employees by

reason of their continuous hiring and performance of tasks necessary and desirable in the
usual trade and business of Lynvil.
Jurisprudence, 42 laid two conditions for the validity of a fixed-contract agreement
between the employer and employee:
First, the fixed period of employment was knowingly and voluntarily agreed
upon by the parties without any force, duress, or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating
his consent; or
Second, it satisfactorily appears that the employer and the employee dealt with
each other on more or less equal terms with no moral dominance exercised by
the former or the latter. 43

Textually, the provision that: "NA ako ay sumasang-ayon na maglingkod at gumawa ng

mga gawain sang-ayon sa patakarang "por viaje" na magmumula sa pagalis sa Navotas
papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila"
is for a fixed period of employment. In the context, however, of the facts that: (1) the
respondents were doing tasks necessarily to Lynvil's fishing business with positions
ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again
be hired for another trip with new contracts; and (3) this arrangement continued for more
than ten years, the clear intention is to go around the security of tenure of the respondents
as regular employees. And respondents are so by the express provisions of the second
paragraph of Article 280, thus:
. . . Provided, That any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.

The same set of circumstances indicate clearly enough that it was the need for a
continued source of income that forced the employees' acceptance of the "por viaje"
provision.
Having found that respondents are regular employees who may be, however, dismissed
for cause as we have so found in this case, there is a need to look into the procedural
requirement of due process in Section 2, Rule XXIII, Book V of the Rules Implementing
the Labor Code. It is required that the employer furnish the employee with two written
notices: (1) a written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain
his side; and (2) a written notice of termination served on the employee indicating that
upon due consideration of all the circumstances, grounds have been established to justify
his termination.

From the records, there was only one written notice which required respondents to
explain within five (5) days why they should not be dismissed from the service.
Alcovendas was the only one who signed the receipt of the notice. The others, as claimed
by Lynvil, refused to sign. The other employees argue that no notice was given to them.
Despite the inconsistencies, what is clear is that no final written notice or notices of
termination were sent to the employees.
The twin requirements of notice and hearing constitute the elements of [due] process in
cases of employee's dismissal. The requirement of notice is intended to inform the
employee concerned of the employer's intent to dismiss and the reason for the proposed
dismissal. Upon the other hand, the requirement of hearing affords the employee an
opportunity to answer his employer's charges against him and accordingly, to defend
himself therefrom before dismissal is effected. 44 Obviously, the second written notice,
as indispensable as the first, is intended to ensure the observance of due process.
Applying the rule to the facts at hand, we grant a monetary award of P50,000.00 as
nominal damages, this, pursuant to the fresh ruling of this Court in Culili v. Eastern
Communication Philippines, Inc. 45 Due to the failure of Lynvil to follow the procedural
requirement of two-notice rule, nominal damages are due to respondents despite their
dismissal for just cause.
Given the fact that their dismissal was for just cause, we cannot grant backwages and
separation pay to respondents. However, following the findings of the Labor Arbiter who
with the expertise presided over the proceedings below, which findings were affirmed by
the Court of Appeals, we grant the 13th month pay and salary differential of the
dismissed employees.
CDHcaS

Whether De Borja is jointly and severally liable with Lynvil

As to the last issue, this Court has ruled that in labor cases, the corporate directors and
officers are solidarily liable with the corporation for the termination of employment of
employees done with malice or in bad faith. 46 Indeed, moral damages are recoverable
when the dismissal of an employee is attended by bad faith or fraud or constitutes an act
oppressive to labor, or is done in a manner contrary to good morals, good customs or
public policy.
It has also been discussed in MAM Realty Development Corporation v. NLRC 47 that:
. . . A corporation being a juridical entity, may act only through its directors,
officers and employees. Obligations incurred by them, acting as such corporate
agents, are not theirs but the direct accountabilities of the corporation they
represent. True, solidary liabilities may at times be incurred but only when
exceptional circumstances warrant such as, generally, in the following cases:
1.When directors and trustees or, in appropriate cases, the officers of a

corporation:
xxx xxx xxx
(b)act in bad faith or with gross negligence in directing the corporate affairs;
xxx xxx xxx 48

The term "bad faith" contemplates a "state of mind affirmatively operating with furtive
design or with some motive of self-interest or will or for ulterior purpose." 49
We agree with the ruling of both the NLRC and the Court of Appeals when they
pronounced that there was no evidence on record that indicates commission of bad faith
on the part of De Borja. He is the general manager of Lynvil, the one tasked with the
supervision by the employees and the operation of the business. However, there is no
proof that he imposed on the respondents the "por viaje" provision for purpose of
effecting their summary dismissal.
WHEREFORE, the petition is partially GRANTED. The 10 September 2007 Decision
of the Court of Appeals in CA-G.R. SP No. 95094 reversing the Resolution dated 31
March 2004 of the National Labor Relations Commission is hereby MODIFIED. The
Court hereby rules that the employees were dismissed for just cause by Lynvil Fishing
Enterprises, Inc. and Rosendo S. De Borja, hence, the reversal of the award for
backwages and separation pay. However, we affirm the award for 13th month pay, salary
differential and grant an additional P50,000.00 in favor of the employees representing
nominal damages for petitioners' non-compliance with statutory due process. No cost.
SO ORDERED.
Carpio, Brion, Sereno and Reyes, JJ., concur.
Footnotes

SECOND DIVISION
[G.R. No. 173189. February 13, 2013.]
JONATHAN I. SANG-AN, petitioner, vs. EQUATOR KNIGHTS
DETECTIVE AND SECURITY AGENCY, INC., respondent.

DECISION

BRION, J :
p

Before the Court is the petition for review on certiorari 1 filed by petitioner Jonathan I.
Sang-an assailing the decision 2 dated September 29, 2005 and the resolution 3 dated
May 29, 2006 of the Court of Appeals (CA) in CA-G.R. SP. No. 86677. The CA set aside
the decision 4 dated December 15, 2003 of the National Labor Relations Commission
(NLRC) and reinstated the decision 5 dated July 30, 2001 of Labor Arbiter Geoffrey P.
Villahermosa (LA).
The Facts
Jonathan was the Assistant Operation Manager of respondent Equator Knights Detective
and Security Agency, Inc. (Equator). He was tasked, among others, with the duty of
assisting in the operations of the security services; he was also in charge of safekeeping
Equator's firearms.
On April 21, 2001, Equator discovered that two firearms were missing from its
inventory. The investigation revealed that it was Jonathan who might have been
responsible for the loss. 6 On April 24, 2001, Jonathan was temporarily suspended
from work pending further investigation.
On May 8, 2001, while Jonathan was under suspension, a security guard from Equator
was apprehended by policemen for violating the Commission on Elections' gun ban rule.
The security guard stated in his affidavit 7 that the unlicensed firearm had been issued
to him by Jonathan.
On May 24, 2001, Jonathan filed with the NLRC a complaint for illegal suspension
with prayer for reinstatement. 8 In his position paper, however, he treated his case as
one for illegal dismissal and alleged that he had been denied due process when he was
dismissed. 9 Equator, on the other hand, argued that Jonathan's dismissal was not illegal
but was instead for a just cause under Article 282 of the Labor Code. 10
CAaEDH

On July 30, 2001, the LA rendered a decision 11 dismissing the complaint. It declared
that no illegal dismissal took place as Jonathan's services were terminated pursuant to a
just cause. The LA found that Jonathan was dismissed due to the two infractions he
committed:
The basis for the termination of the complainant was first, when he was
suspended when he issued a firearm [to] a security guard and then replaced it

with another one, then took the respondent['s] firearm with him and since then
both firearms were lost. . . . .
xxx xxx xxx
His second offense which resulted in his being terminated was when he issued
an unlicensed firearm to a Security Guard stationed in one of the business
establishment[s] in Bais City which is a client of the respondents.
xxx xxx xxx
WHEREFORE, in the light of the foregoing, judgment is hereby rendered
DISMISSING this case for lack of legal and factual basis. 12

Jonathan appealed the LA's decision to the NLRC, contending that no charge had been
laid against him; there was no hearing or investigation of any kind; and he was not given
any chance or opportunity to defend himself.
The NLRC sustained the findings of the LA that there had been just cause for his
dismissal. However, it found that Jonathan had been denied his right to due process
when he was dismissed. It held that Equator's letter informing him of his temporary
suspension until further notice did not satisfy the requirements of due process for a valid
dismissal. Thus, the NLRC modified the LA's decision and ordered Equator to pay
Jonathan backwages from April 24, 2001 until the date of the NLRC's decision. Equator
moved for reconsideration but the NLRC denied the motion, prompting the filing of a
petition for certiorari under Rule 65 of the Rules of Court with the CA. Equator argued
that the NLRC committed grave abuse of discretion when it found that Jonathan had been
denied procedural due process.
The CA reversed the decision of the NLRC, finding that Equator substantially complied
with the procedural requirements of due process. It found that the letter given to Jonathan
did not mean that he had been dismissed; rather, he was only suspended the very
reason for the case for illegal suspension Jonathan filed before the LA.
DcITaC

The CA found that Jonathan filed his complaint for illegal suspension on May 2, 2001.
During the pendency of the illegal suspension case before the LA, Jonathan committed
another offense on May 8, 2001 when he issued the unlicensed firearm to Equator's
security guard. The CA found that Equator's June 7, 2001 position paper brought
Jonathan's second offense before the LA for resolution; thus, Jonathan was not denied
due process. The CA reinstated the LA's decision dismissing Jonathan's complaint.
Jonathan filed a motion for reconsideration which the CA denied. He thereafter filed the
present petition.
The Parties' Arguments

Jonathan contends that when Equator filed a petition for certiorari under Rule 65 of the
Rules of Court alleging grave abuse of discretion by the NLRC, it failed to post a cash or
surety bond as required by Article 223 of the Labor Code. Without complying with this
condition, the petition for certiorari should have been dismissed outright. Also, Jonathan
contends that the CA's findings of fact are contrary to the findings of fact by the NLRC.
Since the findings of fact of quasi-judicial agencies are accorded respect and finality, he
argues that the NLRC's decision must be sustained.
Equator, on the other hand, submits that the rule on posting of cash or surety bond as
required by Article 223 of the Labor Code is not applicable in a petition for certiorari
under Rule 65 of the Rules of Court. It also submits that both the LA and the NLRC
concur in finding just cause for the dismissal of Jonathan; hence, Jonathan's subsequent
dismissal is valid.
The Issues
Given the parties' arguments, the case poses the following issues for the Court's
resolution:
1.whether the posting of a cash or surety bond is required for the filing of
a petition for certiorari under Rule 65 of the Rules of Court with
the CA; and
2.whether Jonathan was validly dismissed.
The Court's Ruling
We find the petition partially meritorious.

aEHAIS

A cash/surety bond is not needed in a

Petition for Certiorari under Rule 65
The requirement of a cash or surety bond as provided under Article 223 of the Labor
Code only applies to appeals from the orders of the LA to the NLRC. It does not apply to
special civil actions such as a petition for certiorari under Rule 65 of the Rules of Court.
In fact, nowhere under Rule 65 does it state that a bond is required for the filing of the
petition.
A petition for certiorari is an original and independent action and is not part of the
proceedings that resulted in the judgment or order assailed before the CA. It deals with
the issue of jurisdiction, and may be directed against an interlocutory order of the lower
court or tribunal prior to an appeal from the judgment, or to a final judgment where there
is no appeal or any plain, speedy or adequate remedy provided by law or by the rules.
Jonathan filed a complaint for

illegal dismissal
Contrary to the findings of the CA, Jonathan was not merely suspended but was
dismissed from the service. While Jonathan initially filed an action for illegal suspension,
the position papers both parties filed treated the case as one for illegal dismissal. Jonathan
alleged in his position paper that "the [r]espondent illegally SUSPENDED (DISMISSED)
the . . . complainant[,]" and claimed that his dismissal lacked the required due process. 13
Similarly, Equator's position paper states that after the commission of the second offense
on May 8, 2001, "[management] made up a decision to dismiss [Jonathan]." 14 Even
the LA treated the case before him as "a case for illegal dismissal[.]"15 In Equator's
memorandum to this Court, it admitted that Jonathan was dismissed. 16
We also find that Jonathan did not file his complaint for illegal suspension on May 2,
2001. The records of the case disclose that the receiving date stamped on the complaint is
May 24, 2001. The date relied upon by the CA, May 2, 2001, was the date when the
complaint was subscribed and sworn to before a notary public. 17 Due to the second
offense committed by Jonathan on May 8, 2001, Equator decided to dismiss him.
Therefore, when the LA tried the case, Jonathan had already been dismissed.
Equator failed to comply with the
procedural due process
In order to validly dismiss an employee, it is fundamental that the employer observe both
substantive and procedural due process the termination of employment must be based
on a just or authorized cause and the dismissal can only be effected, after due notice and
hearing. 18
This Court finds that Equator complied with the substantive requirements of due process
when Jonathan committed the two offenses.
SHaATC

Article 282 (A) of the Labor Code provides that an employee may be dismissed on the
ground of serious misconduct or willful disobedience of the lawful orders of his
employer or representative in connection with his work. Misconduct is improper or
wrongful conduct; it is the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and
not mere error of judgment. The misconduct, to be serious within the meaning of the
Labor Code, must be of such grave and aggravated character and not merely trivial or
unimportant. It is also important that the misconduct be in connection with the
employee's work to constitute just cause for his separation. 19
By losing two firearms and issuing an unlicensed firearm, Jonathan committed serious
misconduct. He did not merely violate a company policy; he violated the law itself
(Presidential Decree No. 1866 or Codifying the Laws on Illegal/Unlawful Possession,
Manufacture, Dealing in, Acquisition or Disposition, of Firearms, Ammunition or

Explosives or Instruments Used in the Manufacture of Firearms, Ammunition or

Explosives, and Imposing Stiffer Penalties for Certain Violations Thereof and for
Relevant Purposes), 20 and placed Equator and its employees at risk of being made
legally liable. Thus, Equator had a valid reason that warranted Jonathan's dismissal from
employment as Assistant Operation Manager.
The Court, however, finds that Equator failed to observe the proper procedure in
terminating Jonathan's services. Section 2, Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code provides that:
Section 2.Standard of due process: requirements of notice. In all cases of
termination of employment, the following standards of due process shall be
substantially observed.
I.For termination of employment based on just causes as defined in Article 282
of the Labor Code:
(a)A written notice served on the employee specifying the ground or
grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side;
(b)A hearing or conference during which the employee concerned, with
the assistance of counsel if the employee so desires, is given opportunity
to respond to the charge, present his evidence, or rebut the evidence
presented against him; and
STaCcA

(c)A written notice [of] termination served on the employee indicating

that upon due consideration of all the circumstances, grounds have been
established to justify his termination. 21

Jurisprudence has expounded on the guarantee of due process, requiring the employer to
furnish the employee with two written notices before termination of employment can be
effected: a first written notice that informs the employee of the particular acts or
omissions for which his or her dismissal is sought, and a second written notice which
informs the employee of the employer's decision to dismiss him. In considering whether
the charge in the first notice is sufficient to warrant dismissal under the second notice, the
employer must afford the employee ample opportunity to be heard.
A review of the records shows that Jonathan was not furnished with any written notice
that informed him of the acts he committed justifying his dismissal from employment.
The notice of suspension given to Jonathan only pertained to the first offense, i.e., the
loss of Equator's firearms under Jonathan's watch. With respect to his second offense
(i.e., the issuance of an unlicensed firearm to Equator's security guard that became the
basis for his dismissal), Jonathan was never given any notice that allowed him to air his
side and to avail of the guaranteed opportunity to be heard. That Equator brought the
second offense before the LA does not serve as notice because by then, Jonathan had

already been dismissed.

In order to validly dismiss an employee, the observance of both substantive and
procedural due process by the employer is a condition sine qua non. Procedural due
process requires that the employee be given a notice of the charge against him, an ample
opportunity to be heard, and a notice of termination. 22
Since Jonathan had been dismissed in violation of his right to procedural due process but
for a just cause, Equator should pay him nominal damages of P30,000.00, in accordance
with Agabon v. NLRC. 23 The decision of the NLRC, although final, was brought to the
CA on a petition for certiorari and was eventually nullified for grave abuse of discretion.
When the CA ruled on the case, this Court had abandoned the ruling in Serrano v. NLRC
24 in favor of the Agabon ruling.
WHEREFORE, we hereby PARTIALLY GRANT the petition. The decision dated
September 29, 2005 and the resolution dated May 29, 2006 of the Court of Appeals in
CA-G.R. SP. No. 86677 are AFFIRMED with MODIFICATION. The employer,
Equator Knights Detective and Security Agency, Inc., had sufficient basis to terminate
the employment of Jonathan I. Sang-an whose dismissal is thus declared to be
substantively valid. However, he was denied his right to procedural due process for lack
of the required notice of dismissal. Consequently, Equator Knights Detective and
Security Agency, Inc. is ordered to pay petitioner Jonathan I. Sang-an P30,000.00 as
nominal damages for its non-compliance with procedural due process.
aHATDI

SO ORDERED.