[G.R. No. 183383 : April 05, 2010]

ANABEL BENJAMIN AND RENATO CONSOLACION, PETITIONERS, VS. AMELLAR CORPORATION, RESPONDENT.

D E C I S I O N

Amellar Corporation (respondent) provides information technology services to local government units (LGUs) including computerizing their system and operations.

In October 1999, respondent hired petitioner Anabel Benjamin (Anabel) who, since March 26, 2001, was the Project Data Controller of its Content Build Up (CBU) Department.

The CBU Department of respondent collates and cleanses all the paper data gathered from the LGU-client which are then encoded and fed into the designed operating system.

As the most senior member of the department, Anabel was its officer-in-charge. From 2002 to 2003, she administered the CBU functions of respondent's projects in Imus, Cavite and Mabini, Batangas.[1] Petitioner Renato Consolacion (Consolacion), a supervising data controller in respondent's Imus project, directly reported to Anabel.[2]

By letter of March 20, 2003, the municipal assessor of Mabini, Batangas informed the manager of respondent that its real property tax administration database was not "100% complete," contrary to the report of respondent's supervising data controller Evangeline Repiano (Evangeline).[3]

Melvin Tandoc (Tandoc), respondent's Technology Manager, thus sent Anabel a memorandum of March 27, 2003 reading:
This is the first written complaint of such nature that we have received from our client. However, other complaints of the same nature have been conveyed to our TTS and/or Marketing Departments orally by Nasugbu, Batangas; Mariveles, Bataan; and Lucena City personnel.
After several months of working in Imus, Cavite, [a] confidential assistant informed me that the assigned SDC, Renato Consolacion, allegedly gave specific oral instructions to some of our Data Controllers and subsequently our Data Encoders on field not to encode several decks of index cards of payments to `beat' the deadline and pass on the job to our Training and Technical Support (TTS) Department.

You are hereby ordered to explain these (Mabini, Batangas and Imus, Cavite) incidents in writing and submit such explanation before 12:00 PM on March 31, 2003, Monday. This is to ensure that your side is adequately and fairly heard.[4] (emphasis and underscoring supplied)

Anabel thereupon required Consolacion and Evangeline to explain in writing the alleged incidents subject of Tandoc's memorandum.[5] Complying, Consolacion gave the following explanation:

If we are still going to accommodate the latest payments and posted [sic] from time to time posting of collection will never end. I have instructed the Land Tax Division, Treasurer[']s Office to separate those recently posted with new payments to update later in order to have a systematic flow of mass updating of payments.

Furthermore, I have no instruction to our DC's stating that we have to leave several decks of indexes just to "beat" the deadline[.] I'm looking forward that our DC's will stand fairly and honest beyond their conscience attesting my good intentions to keep the work within pace and credible.[6] (emphasis and underscoring supplied)

Tandoc, to whom Consolacion's explanation was transmitted, sent another memorandum to Anabel indicating that he was not satisfied therewith and accordingly advising her that a formal investigation would be conducted.[7] Anabel thereupon sent Consolacion a memorandum notifying him that a formal investigation would be conducted on the "4th week of April" without any mention therein of the actual date of the formal hearing.[8]

It was only on April 23, 2003 that Tandoc directed Anabel to inform Consolacion and Evangeline that the formal hearing on the issues raised in his March 27, 2003 memorandum would proceed at 1:45 P.M. of said date.[9]

Respondent, alleging that Anabel did not inform Consolacion of the hearing, preventively suspended her for three days starting April 25, 2003 for "obstructing the conduct of due process." [10] She was also subsequently suspended for three working days starting April 30, 2003 for not obeying a direct order.

Anabel thereupon filed a complaint for illegal suspension before the National Labor Relations Commission (NLRC) against respondent and/or Tandoc.[11]

In the meantime, respondent conducted hearings on Consolacion's case on April 23 and 28, 2003 during which Consolacion purportedly admitted the following: 1. Failure to provide written instructions for the separation of currently transacted records to officials of the Municipality of Imus; 2. Failure to advise or belatedly advising the supervising data controllers of the separation of the records; and 3. Failure to send some of the template letters and/or failure to follow the time frame for sending thereof.[12]

As for Evangeline, respondent cleared her of any wrongdoing, it concluding that the written complaint from the municipal assessor of Mabini was "more likely due to miscommunication." Respondent even commended Evangeline for her "care and diligence expected from a responsible supervisor."[13]

Tandoc later sent Anabel a memorandum of May 6, 2003
"appris[ing her of] the following acts or omissions for which [her] dismissal was [sought]"
Willful Breach of Trust Reposed in You

1. Reporting completion when there is no basis for such report;

2. Self-serving denials on the existence of verbally conveyed work or instructions and unwritten procedures;

3. Self-serving alibis on why certain work that can be delegated or sufficiently complied with on time in your capacity as supervisor and as senior officer in your department have not been accomplished or accomplished late only upon the prodding of a written memorandum; and

4. Attempting to obstruct the conduct of due process for your subordinates under investigation/hearing.

Gross and Habitual Neglect of Duties

1. Failure to institute existing standards and procedures both written and unwritten; and
2. Failure to monitor and correct the errors of your subordinates.

Willful Disobedience of Lawful Orders in Connection with Work

1. Failure to comply with the lawful orders of your superior

You are hereby directed to submit within 72 hours your written answer on why you should not be dismissed on the said grounds. You are hereby given the opportunity to draft your written answer even outside of the office and still be paid your regular wages within said period.

Attached is the annex on the acts and omissions referred to by this notice.[14](emphasis in the original; underscoring supplied)

On receipt of the memorandum, Anabel requested for a bill of particulars and for additional time to respond to the charges.[15] Tandoc replied that the "annex"[16] to the memorandum was particular enough. Nevertheless, he gave Anabel until May 14, 2003 to respond to the charges.

On May 14, 2003, Anabel reiterated her request for a bill of particulars.[17] On even date, Tandoc issued Consolacion a five-page memorandum informing him of his dismissal "for willful breach of trust reposed in him and all related and applicable charges acceptable to the Philippine Labor Code that pertain to the facts of this case."[18]

The following day or on May 15, 2003, Tandoc issued Anabel a Notice on Decision to Dismiss.[19]

Anabel amended her Complaint, adding as causes of action illegal dismissal, damages, and attorney's fees.[20] Consolacion also filed a complaint for .[21] Both cases were consolidated.

By Decision[22] dated October 21, 2003, Labor Arbiter Felipe P. Pati, finding that petitioners were illegally dismissed, disposed:
WHEREFORE premises all considered, judgment is hereby rendered ordering respondents jointly and severally liable to:

1. reinstate complainants to their former positions without loss of seniority rights;

2. pay complainants full backwages in the amount of:
a) Anabel Benjamin - P72,500.00
b) Renato Consolacion - P45,000.00

subject to adjustment upon actual reinstatement.

All other claims are dismissed for lack of merit.

SO ORDERED.[23]

On appeal, the NLRC affirmed the Labor Arbiter's decision,[24] prompting respondent to file a petition for certiorari[25] before the Court of Appeals.

By Decision[26] of August 17, 2007, the Court of Appeals reversed the NLRC Decision and dismissed petitioners' complaints, hence, the present petition, assailing the appellate court's decision,
I.THERE [BEING] NO PROOF OF GROSS AND HABITUAL NEGLECT OF DUTIES OR LOSS OF TRUST AND CONFIDENCE.

SINCE [RESPONDENT'S] PETITION IS PATENTLY WITHOUT MERIT.

FOR THE COMMON AND UNANIMOUS FINDINGS OF THE LABOR ARBITER AND THE NLRC ARE SUPPORTED BY SUBSTANTIAL EVIDENCE.

FOR] MANAGEMENT PREROGATIVE IS NOT ABSOLUTE.[27] (underscoring supplied)

Petitioners contend that respondent failed to substantiate the grounds for their dismissal from employment, maintaining that respondent merely relied on speculations and unsubstantiated conclusions.[28]

Respondent, in its Comment, preliminarily moves to have Consolacion dropped as petitioner for failure to sign the verification and certification of non-forum shopping.

On the merits, respondent underscores that Anabel falsely reported the completion of work in the Imus project; that she failed to follow ordinary procedures and instructions, to monitor and correct operational errors, and to comply with the lawful orders of her superiors.[29]

As for Consolacion, respondent asserts that he too misrepresented that the Imus project had been completed; that he failed to follow procedures and instructions, to provide written instructions for the separation of currently transacted records to the officials of Imus, to advise or belatedly advise the data controllers of the separation of the records, and to send the template letter or follow the time frame for sending such letter.[30]

Finally, respondent echoes the finding of the appellate court that it observed petitioners' right to due process by complying with the mandated two-notice requirement following an "extensive fact[-]finding process, culminated by scheduling and actual hearings and investigations."[31]

The petition is impressed with merit.

On the procedural issue, the Court resolved to relax the application of technical rules of procedure in labor cases to serve the demands of substantial justice, there being merit in Consolacion's case.[32]His counsel, who claimed that Consolacion was in the province at the time of the filing of the petition, promptly submitted Consolacion's verification and certification as directed by the Court.

Consolacion was terminated for "willful breach of trust reposed in him and all related and applicable charges acceptable to the Philippine Labor Code."

To terminate the services of an employee for loss of trust and confidence,[33] two requisites must concur: (1) the employee concerned must be holding a position of trust and confidence[34] and (2) there must be an act that would justify the loss of trust and confidence.[35]

Consolacion occupied a position imbued with trust and confidence, he being a supervising data controller. It was his primary duty to monitor and report the performance of the data controllers in relation to the scope of work contracted out to respondent. Respondent thus banks heavily on the report of Consolacion to monitor the output quality and quantity of its data controllers. On the basis of this report, respondent assesses its employees and bills its clients for work done.

Respondent, however, failed to justify its loss of trust and confidence on Consolacion even as it imputed to him, via Notice of Formal Investigation of April 14, 2003, non-compliance with
a) . . established non-written [sic] procedures and standards;
b) . . . established written procedures and standards, and
c) . . . ...verbal orders and/or instructions.[36]

Evidently, the immediately stated acts of non-compliance are too general and can encompass just about any malfeasance. Nowhere in the Notice was there a detailed narration of the facts and circumstances that would serve as bases to terminate Consolacion, thus leaving to surmise what those procedures, standards and orders were.

King of Kings Transport v. Mamac [37] explains the importance of the first written notice:
(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. 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.

(3) x x x x (emphasis and underscoring supplied)

In the "hearing" of April 23, 2003,[38] "commonly encountered problems" in the Imus project, not specific acts against Consolacion, were discussed. The supposed "confidential" assistant mentioned in Tandoc's above-quoted memorandum of March 23, 2003 was not presented nor identified. In the Court's view, what was undertaken by respondent at said April 23, 2003 "hearing" was anassessment conference among the data encoders in the Imus project, designed to pinpoint strengths and weaknesses in the work conducted. This conference or consultation cannot stand as proxy for the requisite hearing.[39]

Respondent was itself not sure of what to charge petitioner Consolacion. It would appear that it was baiting him into admitting whatever malfeasance may be uncovered during the process.[40]

Still, respondent used as its main basis for termination the supposed claim of Consolacion that the Imus project had been completed. Again, nothing is extant in the records to show that Concolacion had in fact reported the completion of the Imus project. It should be recalled that it was anotherproject--that one in Mabini, Batangas--which was reported to have been completed. And it was not even by Consolacion but by Evangeline.

The other ground cited in the dismissal notice (all related and applicable charges acceptable to the Labor Code) evidently lacks particularity and does not clearly state what those related and applicable charges were. Such omnibus ground does not suffice at law.

Respecting Anabel who was dismissed for willful breach of trust, gross and habitual neglect of duties, and willful disobedience to lawful orders, she, like Consolacion, occupied a position of trust and confidence, she being the officer-in-charge of the CBU Department.

Respondent, however, failed to prove even a single act ─ basis of its loss of trust and confidence in Anabel. Apart from its self-serving assertions, respondent had not offered any piece of documentary evidence to lend truth to its allegations. It harps on supposed "numerous" complaints it received on their projects, yet only one written complaint on the Mabini project was presented. Note that the Mabini project had been determined to be completed and the accountable data controller, Evangeline, had been absolved from any liability. Suffice it to state that respondent contented itself with conjectures and surmises as proofs of its charges.

Respondent also faults Anabel for gross and habitual neglect of duties for "failure to institute existing standards and procedures both written and unwritten" and "failure to monitor and correct the errors of [her] subordinates."[41] Despite Anabel's May 14, 2003 letter for particulars,[42] however, respondent never addressed what were the standards and procedures she violated and errors she failed to monitor. Respondent instead sent her a dismissal notice.

It bears stressing in dismissing an employee for gross and habitual neglect of duties, the negligence should not merely be gross. It should also be habitual.[43] There being nothing in the records to identify what specific duties Anabel violated and whether the violations were gross and habitual, any discussion herein is an exercise in futility.

Respondent capitalizes on the alleged failure of Anabel to immediately inform Consolacion of the April 23, 2003 "hearing" to anchor its claim of willful disobedience to a lawful order to justify her suspension with pay for three days. Anabel, however, did actually inform Consolacion of the "hearing" date on "the 4th week of April"[44] as in fact the records show that Consolacion attended the April 23, 2003 "hearing."[45]

Respondent further penalized Anabel with a three-day suspension, this time without pay, for "obstructing the conduct of due process and possible obstruction of the ongoing due process,"[46]also on the basis of the same alleged failure to immediately notify Consolacion for the April 23, 2003 hearing.

As did the NLRC, the Court finds that respondent erred in preventively suspending petitioner Anabel for lack of basis, there being no serious and imminent threat to its life and property or to her co-workers.[47]

And so does the Court find erroneous the suspension penalty imposed on Anabel for violating her right to due process. Respondent cannot suspend Anabel without hearing her side for her alleged disobedience since suspension in this instance was a penalty. Respondent should thus be made to reimburse Anabel for her suspension without pay covering three (3) working days.

Finally, that respondent did not even bother to calendar a hearing on Anabel's case further betrays any constancy to due process. Anabel's failure to give a written answer to the first notice notwithstanding, the same cannot be construed as a waiver of her right to a hearing.[48]

WHEREFORE, the assailed Decision of the Court of Appeals is REVERSED and SET ASIDE. Respondent, Amellar Corporation, is ORDERED to reinstate petitioners, Anabel Benjamin and Renato Consolacion, to their former positions or their equivalent, without loss of seniority rights and privileges, and to pay them full backwages inclusive of allowances and other benefits or their monetary equivalent, from the time of their dismissal until actual reinstatement. If reinstatement is no longer feasible, respondent is directed to give them separation pay equivalent to at least one month salary for every year of service, computed from the time of engagement of their services up to the finality of this decision.

Respondent is further DIRECTED to pay Anabel Benjamin her wages covering three working days for her illegal suspension.

The records of this case are REMANDED to the Labor Arbiter for computation of petitioners' respective monetary claims.

No costs.

SO ORDERED.

[G.R. No. 187605 : April 13, 2010]

TECHNOL EIGHT PHILIPPINES CORPORATION, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND DENNIS AMULAR, RESPONDENTS.

D E C I S I O N

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, Biñan, Laguna, manufactures metal parts and motor vehicle components. It hired the respondent Dennis Amular (Amular) in March 1998 and assigned him to Technol's Shearing Line, together with Clarence P. Ducay (Ducay). Rafael Mendoza (Mendoza) was the line's team leader.

On April 16, 2002 at about 5:30 p.m., Mendoza went to the Surf City Internet Café in Balibago, Sta. Rosa, Laguna. As Mendoza was leaving the establishment, he was confronted by Amular and Ducay who engaged him in a heated argument regarding their work in the shearing line, particularly Mendoza's report to Avelino S. De Leon, Jr. (De Leon), Technol's Production Control and Delivery (PCD) assistant supervisor, about Amular's and Ducay's questionable behavior at work. The heated argument resulted in a fistfight that required the intervention of the barangay tanods in the area.

Upon learning of the incident, Technol's management sent to Amular and Ducay a notice of preventive suspension/notice of discharge dated May 18, 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]

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]
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.

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.

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

The Procedural Issue

We find no procedural impediment to the petition. An objective reading of the petition reveals that Technol largely assails the correctness of the conclusions drawn by the CA from the set of facts it considered. The question therefore is one of law and not of fact, as we ruled in Cucueco v. Court of Appeals.[30] Thus, while there is no dispute that a fight occurred between Amular and Ducay, on the one hand, and Mendoza, on the other, the CA concluded that although Amular committed a misconduct, it failed to satisfy jurisprudential standards to qualify as a just cause for dismissal - the conclusion that Technol now challenges. We see no legal problem, too, in wading into the factual records, as the tribunals below clearly failed to properly consider the evidence on record. This is grave abuse of discretion on the part of the labor tribunals that the CA failed to appreciate.

The Merits of the Case

The CA misappreciated the true nature of Amular's involvement in the mauling incident. Although it acknowledged that Amular committed a misconduct, it did not consider the misconduct as work-related and reflective of Amular's unfitness to continue working for Technol. The appellate court's benign treatment of Amular's offense was based largely on its observation that the incident happened outside the company premises and after working hours; did not cause a disruption of work operations; and did not result in a hostile environment in the company. Significantly, it did not condone Amular's infraction, but it considered that Amular's dismissal was a harsh penalty that is disproportionate with his offense. It found support for this liberal view from the pronouncement of the Court in Almira v. B.F. Goodrich Philippines, Inc.,[31] that "where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe."

The record of the case, however, gives us a different picture. Contrary to the CA's perception, we find a work-connection in Amular's and Ducay's assault on Mendoza. As the CA itself noted,[32] the underlying reason why Amular and Ducay confronted Mendoza was to question him about his report to De Leon - Technol's PCD assistant supervisor - regarding the duo's questionable work behavior. The motivation behind the confrontation, as we see it, was rooted on workplace dynamics as Mendoza, Amular and Ducay interacted with one another in the performance of their duties.

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

From the records, Ducay appeared to have cooperated with Amular in the violent confrontation with Mendoza. Ducay, however, resigned on June 7, 2002 a week before the filing of the complaint.[34]Hence, Technol did not act against him - a move that is within its prerogative to make.

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]

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.

SO ORDERED.

CALTEX (PHILIPPINES), INC., WILLIAM P. TIFFANY, E.C. CAVESTANY, and E.M. CRUZ, Petitioners, - versus - HERMIE G. AGAD and CALTEX UNITED SUPERVISORS’ ASSOCIATION, Respondents. | G.R. No. 162017 Present: CARPIO, J., | x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

The Case Before the Court is a petition for review on certiorari[1] assailing the Decision[2] dated 22 May 2003 and Resolution[3] dated 27 January 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 74199, which reversed the Decision[4] dated 6 June 2001 and Resolution[5] dated 24 September 2002 of the National Labor and Relations Commission (NLRC) in NLRC NCR CA No. 018872-99. The Facts On 1 September 1983, petitioner Caltex Philippines, Inc. (Caltex) employed respondent Hermie G. Agad (Agad) as Depot Superintendent-A on a probationary basis for six months. On 28 February 1984, Agad became a regular employee with a monthly salary of P2,560 and cost of living assistance of P380. For the next eleven years, Agad obtained various commendations[6] and held the positions of Depot Superintendent-A, Field Engineer, Senior Superintendent, and Bulk Depot Superintendent until his dismissal on 8 August 1994. Agad received a monthly gross salary of P31,000, a mid-year bonus equivalent to one month’s salary and 13thmonth pay at the time of his termination. After Agad had served for two years since 1990 as Superintendent of the Tacloban Bulk Depot (Depot) in Leyte, Caltex transferred Agad to Bauan Bulk Depot in Batangas effective 16 May 1992.[7] To transfer his belongings from Leyte to Batangas, Agad secured the carpentry services of Alfredo Delda (Delda), the owner of A.A. Delda Engineering Services (Delda Services) for the construction of two crates. Agad paid Delda P15,500, evidenced by Official Receipt No. 0970[8] dated 12 May 1992. Agad submitted the receipt sometime in August 1992 and Caltex reimbursed him the said amount. On 13 April 1993, Caltex conducted its regular audit of employees’ account and expenses as of 31 December 1992.[9] The company auditor of Caltex verified the crating expense incurred by Agad with Delda. Delda, through an Affidavit dated 5 May 1993,[10] disclosed that Delda Services did not perform any crating service for Agad or receive the amount of P15,500 as stated in the official receipt. Delda alleged that he was forced by Agad to issue the official receipt in order to get a favorable recommendation from the incoming superintendent of the Depot. Further investigations revealed that Arsenio Asperas (Asperas), a carpenter from Tacloban, was commissioned by Agad to build two wooden crates on 12 May 1992. Asperas attested that Agad paid him the amount of P400 and he completed the work in 2 ½ days beside the quarters of Agad inside the Depot.[11] Basilia Villalino (Villalino), a household staff of the Depot Staff House, corroborated Asperas’ statement in a Sworn Testimony dated 24 May 1993 that Agad did hire Asperas to make two wooden crates inside the Depot before he left for his next post.[12] In another audit report dated 12 May 1993,[13] the company auditor declared that 190 pieces of 11 kg. liquefied petroleum gas (LPG) cylinders from the Depot were allegedly withdrawn for scrap and repair purposes without proper documentation on 8 February 1991 when Agad was still depot superintendent. Isidro B. Millanes (Millanes), the depot’s LPG cylinder repair/reconditioning contractor and owner of IBM Enterprises, claimed that the LPG cylinders were hauled to his compound and allegedly later sold, upon the express instructions of Agad, to Leyte Development Corporation and Ernesto Mercado, a service station dealer. On 5 July 1993, petitioner E.C. Cavestany (Cavestany), the Regional Manager of Caltex, issued a Memorandum[14] to Agad directing him to explain the following audit review findings: (1) the questionable reimbursement of crating expense; and (2) the alleged unauthorized withdrawal and sale of 190 pieces of LPG cylinders. On 29 July 1993, Agad sent his reply[15] answering all the charges against him. Agad stated: (1) that Delda Services constructed the two crates worth P15,500 as evidenced by an official receipt issued by Delda; and (2) that the withdrawal of the scrap LPG cylinders formed part of his housekeeping duties as depot superintendent. The scrap materials consisting of tanks, pumps and pipelines of Gebarin, a logging account of Caltex located in Marabut, Samar, were bidded out to a certain Rogelio “Boy” H. Bato on an “as is, where is” basis.[16] However, the scrap materials went missing and Boy Bato demanded that such be replaced with equivalent materials. The scrap LPG cylinders were released instead after Agad secured the approval of his superiors as evidenced in a Memorandum dated 12 February 1992.[17] After the approval, Boy Bato’s buyer, a certain Mr. Ang, allegedly acquired the scrap cylinders from IBM Enterprises. Caltex created an investigating panel chaired by Cavestany to look into the offenses allegedly committed. On 17 August 1993, the investigating panel held its first formal inquiry.[18] The transcript of the investigation was dated 2 September 1993.[19] On 29 April 1994, Caltex placed Agad under preventive suspension. On 26 May 1994 or almost 10 months after the first formal inquiry, the investigating panel conducted another hearing.[20] Two other hearings were held on 14 June and 6 July 1994. In a Confidential Memorandum dated 8 August 1994,[21] Cavestany informed Agad of his dismissal on the grounds of serious misconduct and loss of trust and confidence, both just causes for termination of employment. Agad received the memorandum on 25 August 1994. On 1 September 1994, respondents Agad and Caltex United Supervisors’ Association filed a complaint[22] with the Labor Arbiter (LA) for illegal dismissal, illegal suspension with prayer for full backwages of P31,000 per month from 25 August 1994 until reinstatement, moral damages of P5,000,000, exemplary damages of P5,000,000 and 10% of the total monetary award as attorney’s fees against petitioners Caltex and its officers – William P. Tiffany, President and Chief Executive Officer; E.M. Cruz, General Manager for Distribution; and Cavestany. On 16 November 1998, the LA rendered a decision in favor of Agad.[23] The LA held that there were no just causes for Agad’s termination of employment. On the charge of fraudulent reimbursement of crating expense, the LA found no basis for this since Delda issued an official receipt which served as best evidence that the crating expense was actually incurred. According to the LA, Delda’s claim that he was only forced by Agad to issue the receipt for fear of losing his job as a contractor does not appear to be credible. In the administrative inquiry held on 26 May 1994, it was clearly established that Delda held a grudge against Agad since Agad did not recommend him to be a contractor of Caltex for failure to meet the minimum capital required of aspiring contractors. Also, the LA did not give any weight to the testimonies of Asperas and Villalino since they were not presented for cross-examination during the investigation. As to the charge of unauthorized withdrawal and sale of the LPG cylinders, the LA ruled that Agad was denied the right to present his witnesses and other evidence in support of his defense which constitutes a denial of due process. Thus, the LA ruled that Agad had been illegally dismissed by Caltex. The dispositive portion of the LA’s decision states: Since there was no just cause for termination of the services of the complainant; and since the complainant was not given due process in the proceedings to terminate his services; and since he was illegally placed under preventive suspension, we therefore rule that the complainant is entitled to the twin remedies of reinstatement, with full backwages, from the time of his dismissal until his reinstatement to his former position as Depot Superintendent of the Bauan Bulk Depot, or to a similar position, without any loss of seniority rights. By reason of the arbitrary nature of the termination of the service of the complainant, and the denial of due process in the denial of his right to present evidence in his defense in the administrative inquiry prior to the termination of his services, we hold further the respondents liable to the complainant for moral damages, in the sum of P5,000,000.00; exemplary damages in the sum of P5,000,000.00; and attorney’s fees in the sum of ten (10%) percent of the total monetary awards. SO ORDERED.[24]

Caltex filed an appeal with the NLRC. The Ruling of the NLRC On 6 June 2001, the NLRC reversed the decision of the LA. The NLRC held that there existed just causes which justified Agad’s dismissal. With regard to the first allegation, the NLRC ruled that the amount of crating expense reimbursed by Agad was fictitious. The fact that a receipt was issued by Delda does not conclusively prove that the crating service was performed by Delda. At the most, the existence of the receipt only proves its execution. The NLRC declared that Delda’s testimony, made under oath, enjoys the presumption of regularity and good faith. Corroborated by two other witnesses, Asperas and Villalino, Delda’s testimony clearly established that Agad was dishonest in his dealings. The NLRC added that even if the amount involved was only worth P15,500, the same was of no moment since what was involved was Agad’s propensity to commit dishonesty against the company. As a supervisor, a greater degree of diligence, honesty and trust was expected of him. The NLRC further stated that Caltex had no bad motive to pick on Agad and tell lies about him if indeed he was trustworthy since Agad was given awards and commendations before the discovery of the questioned acts. On the second allegation, the NLRC ruled that Agad had no authority to withdraw the LPG cylinders from the Depot. The NLRC declared that Agad did not observe existing company rules and regulations in procuring the required forms, in the submission of periodic LPG cylinders inventory and in selling the LPG cylinders without the requisite bidding. Thus, the NLRC concluded that Caltex validly dismissed Agad. The dispositive portion of the NLRC’s decision states: WHEREFORE, finding sufficient reasons/grounds to warrant reversal of the findings of the Arbiter a quo, the assailed decision is hereby SET ASIDE and a new one entered ordering the DISMISSAL of the complaint for lack of basis both in fact and in law. SO ORDERED.[25]

Agad filed a Motion for Reconsideration which was denied in a Resolution dated 24 September 2002. Agad then filed a petition for certiorari under Rule 65 with the CA. Agad sought the nullification of the decision of the NLRC.

The Ruling of the Court of Appeals On 22 May 2003, the CA modified the judgment of the NLRC and ruled in favor of Agad. On the issue of fraudulent reimbursement of crating expense, the CA concurred with the LA. According to the CA, the regularity of the official receipt remained untarnished since the only other proof relied upon by petitioners, Delda’s affidavit, failed to substantiate his allegations. Delda never assailed the due execution of the receipt and even admitted that he actually issued the receipt. The supporting affidavits of Asperas and Villalino, since they were not cross-examined, must be rejected for being hearsay. Thus, no sufficient evidence was presented to prove that the amount in the receipt was fictitious. Further, the CA indicated that Caltex did not make any limitations to the crating expense to be reimbursed such that Agad was entitled to move his personal and household effects at reasonable costs. On the second issue of unauthorized withdrawal and sale of LPG cylinders, the CA agreed with the NLRC that Agad did not comply with company rules and regulations. Nonetheless, the CA held that the penalty of dismissal imposed upon Agad was too harsh considering that this was his first infraction and that Agad had been awarded several commendations in the past and had worked for Caltex for more than 10 years. The dispositive portion of the CA’s decision states: WHEREFORE, premises considered, the petition is hereby GRANTED, and the judgment of the NLRC is hereby MODIFIED. Accordingly, finding no just cause for the termination of employment of the petitioner Hermie G. Agad, we therefore rule that the petitioner was illegally dismissed; he should be entitled to reinstatement, with full backwages, from the time of his illegal dismissal until his reinstatement to his former position as Depot Superintendent of the Bauan Bulk Depot, or to a similar position without any loss of seniority rights. SO ORDERED.[26] Caltex filed a Motion for Reconsideration which was denied in a Resolution dated 27 January 2004. Hence, the instant petition. The Issue The main issue is whether Caltex legally terminated Agad’s employment on just causes: (1) acts tantamount to serious misconduct and willful violation of company rules and regulations; and (2) willful breach of trust and confidence as Depot Superintendent. The Court’s Ruling Article 282 of the Labor Code states: ART. 282. TERMINATION BY EMPLOYER. – An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing.

In termination cases, the burden of proof rests on the employer to show that the dismissal is for just cause. When there is no showing of a clear, valid, and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause.[27] The quantum of proof which the employer must discharge is substantial evidence. An employee’s dismissal due to serious misconduct and loss of trust and confidence must be supported by substantial evidence. Substantial evidence is that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.[28] In the present case, petitioners terminated Agad’s employment based on these acts: (1) Agad’s submission of a fictitious crating expense amounting to P15,1500; and (2) the unauthorized withdrawal and sale of 190 pieces of 11 kg. LPG cylinders for his personal gain and profit. Crating expense is reasonable Petitioners insist that the CA erred in ruling that the crating expense of P15,500 was justifiable without however stating the basis for such a ruling. According to petitioners, the records prove that there were more than ample evidence to show that the crating expense was fictitious. Petitioners reiterate the sworn testimonies of Delda, Esperas, and Villalino, and that of Augusto Cabugao, the Regional Audit Manager of Caltex, who testified that the crating expense of P15,500 was unreasonably high considering that depot houses of Caltex were fully furnished and expenses incurred in transferring personal effects were usually very small. Respondents, on the other hand, maintain that the crating expense was necessary and reasonable under the circumstances. First, Caltex readily approved the reimbursement claim when Agad submitted the official receipt. It was only a year later, during a regular audit, when Caltex sought Delda’s affidavit of denial when the company questioned the authenticity and reasonableness of the amount of the crating expense. Second, of the first three witnesses for the petitioners, only Delda was presented for cross-examination during the administrative investigation. Thus, the affidavits of Esperas and Villalino remain hearsay and deserve scant consideration. Last, George Taberrah, the former Manager for Distribution of Caltex, testified on 26 February 1996 that the amount of P15,500 for crating expense was reasonable. Even Roger San Jose, the former auditor of Caltex, testified on the necessity and reasonableness of said amount. In R & E Transport, Inc. v. Latag,[29] we held that factual issues may be reviewed by the CA when the findings of fact of the NLRC conflict with those of the LA. By the same token, this Court may review factual conclusions of the CA when they are contrary to those of the NLRC or of the LA. In the present case, the evidence of the parties with respect to the crating expense reimbursed by Agad finds discord on the official receipt issued by Delda vis-a-visDelda’s sworn testimony denying that he received the amount stated in the receipt or rendered any crating service for Agad. The petitioners presented the affidavits of Asperas and Villalino to corroborate Delda’s testimony while Agad relied on the official receipt as the best evidence that he contracted Delda’s services and that Delda indeed issued said receipt. The decisions of the CA and NLRC produced different factual conclusions on this issue. After a careful review of the records, we find no cogent reason to disturb the findings of the CA. First, the official receipt submitted by Agad serves as the best evidence of payment and is presumed regular on its face absent any showing to the contrary. Second, records show that the reimbursement of the crating expense was approved by Agad’s superior upon presentment of the receipt. At the time, Agad’s superior did not mention that the amount of the crating expense incurred was unreasonable. Third, Delda, in his affidavit, disclosed that he was forced to issue the receipt in order to get a favorable recommendation from the incoming superintendent who would replace Agad in the Depot. However, in the same affidavit, Delda mentioned that he had been a standby worker at the Depot from 1956 to 1982 and a piece-worker from 1982 up to 1993, the date he executed the affidavit. It appears then that Delda had established a name for himself and his business with Caltex. Any favorable recommendation from Agad, as the outgoing superintendent, would not provide much impact compared to the reputation he had built all those years. Fourth, the testimonies of the two corroborating witnesses, Esperas and Villalino, cannot be given credence since Agad was not given an opportunity to cross-examine them. Their testimonies are considered as hearsay evidence. Last, petitioners did not present any other evidence to show that Agad violated company policy dealing with crating expenses to be limited to a certain amount. Reasonableness was the only criterion given by the employer. Thus, all these taken into consideration, we conclude that petitioners were not able to fully substantiate the alleged fictitious reimbursement of the crating expense. Delda’s testimony alone, without any corroborating evidence to prove otherwise, is insufficient to overcome the presumption of regularity in the issuance of his own official receipt which he gave to Agad. Withdrawal and sale of 190 pieces of LPG cylinders is unauthorized Petitioners assert that Agad committed serious violation of internal control procedures and company policies due to the following: (1) no Records of Materials Received/Delivered (RMRD) were issued to cover the withdrawal of the empty cylinders for repair purposes; (2) the testimony of Millanes demonstrates that the cylinders were initially stored at his premises on 8 February 1991 and later sold as good units without bidding, upon the instructions of Agad, to Leyte Development and Ernesto Mercado; (3) no evidence was submitted to show that the sales proceeds were turned over to Caltex and petitioners surmise that the total prevailing price of the LPG cylinders would have been from a low of P95,000 to a high of P133,000; (4) the periodic report of inventory of the LPG cylinders, considered part of storehouse materials, to Head Office Accounting was not submitted by the depot; and (5) the depot clerk acted beyond his authority when he approved the gate passes for the withdrawal of the cylinders.[30] Respondents, on the other hand, maintain the following: (1) that as depot superintendent, Agad had the authority to transfer materials, including scrap, from one place to another; (2) Agad had specific authority, per Memorandum dated 12 February 1992, to withdraw the scrap materials as replacement for the missing scrap tanks, pumps and pipelines earlier sold to Boy Bato; (3) the withdrawal of the LPG cylinders was covered by gate passes 8499 and 8500, negating any fraudulent intent on Agad’s part; and (4) petitioners’ own witness, Millanes, testified that the LPG cylinders withdrawn were actually junk or scrap materials and of no accounting value. In addition, even assuming that the withdrawal of the LPG cylinders was unauthorized, the penalty of dismissal is too harsh a penalty. We agree with petitioners. The findings of the CA in the present case revealed: With regard to the second issue, the petitioner contends that the withdrawal/sale of 190 LPG cylinders in the Tacloban Bulk Depot was well within his authority as a Depot Superintendent and covered by an authority stated in an instrument, as a consequence of a contract of sale with Mr. Bato. Furthermore, such cylinders were already considered as scrap or without monetary value. Therefore, its withdrawal/sale could not constitute just cause for dismissal. The contention is without merit. Although his position as Depot Superintendent includes such authority, as part of his housekeeping duties, it does not automatically justify his acts which were contrary to company rules and regulations. The company rules required the issuance of RMRDs for any company properties with value to be withdrawn from the Bulk Depot. Petitioner failed to comply with this rule. Furthermore, he ordered the sale of the cylinders without bidding, and there were no evidence that the proceeds of such sale were turned over to the company. Mere existence of authority does not justify his acts, he must show that he properly exercised such authority as contemplated in the company rules and regulations, especially when the act is not within his discretion. His contention that such withdrawal mas merely a part of a contract of sale between the company and Mr. Bato, is likewise erroneous. The instrument never mentioned of any LPG cylinders, what was mentioned therein was 3,000 B.I. plates. And even if the contract involved LPG cylinders, still, its withdrawal must be accounted for. The petitioners’ assumption that the subject LPG cylinders were merely scrap materials is likewise erroneous. The cylinders, although declared as scraps, still has monetary value because it can still be sold even as scrap materials. Moreover, even if such cylinders were merely scrap, the petitioner cannot just appropriate them without the company’s consent. Being company property, its disposal is still within the discretion and prerogative of the company.[31]

In the same manner, the NLRC, in its Decision dated 6 June 2001, held: It was sufficiently established that complainant Agad had no authority to withdraw the LPG cylinders from the Tacloban Bulk Depot. Complainant Agad’s claim that he merely withdrew the LPG cylinders in view of the loss of certain scrap materials earlier sold to Mr. Boy Bato is belied by the fact that the alleged loss was not established. On the other hand, the records show that complainant Agad’s request for the withdrawal of scrap materials only covered 3,000 kilograms of B.I. plates. This request, however, did not include the LPG cylinders, numbering 190, which were withdrawn from the Tacloban Depot. Complainant Agad also did not observe the existing company rules and regulations on the withdrawal of LPG cylinders from the Tacloban Bulk Depot. According to the Audit Report, which was not controverted by complainant Agad, no Records of Materials Received/Delivered were issued to cover the withdrawal of the cylinders. Also, the periodic inventory of the LPG cylinders was not submitted by complainant Agad to the accounting department. Further, the LPG cylinders were not sold through bidding, which was corroborated by the statement of Mr. Isidro B. Millanes, who testified that the subject LPG cylinders were first stored at his premises and later sold without bidding upon the express instructions of complainant Agad. In this regards, it cannot be validly claimed that the LPG cylinders in question were mere scrap materials, i.e. they had no monetary value anymore and therefore not subject to the strict requirement laid down by the company rules and regulations. As testified to by Mr. Cabugao, and by no less than complainant Agad himself and his own witnesses, Mr. George Taberrah, and Mr. Roger San Jose, Jr., the LPG containers have monetary value as they can still be sold even as scrap.[32]

The findings of the CA and NLRC establish the following: (1) Agad’s request for withdrawal of the 190 pieces of LPG cylinders as stated in a Memorandum dated 12 February 1992 cannot be given credence since the Memorandum pertains to the replacement of the scrap materials due to Boy Bato consisting of 3,000 kilograms of black iron plates and not to the subject LPG cylinders; (2) Agad did not observe Caltex’s rules and regulations when he transferred the said cylinders to Millanes’ compound without the RMRD form as required under Caltex’s Field Accounting Manual; (3) Agad gave specific instructions to Millanes to sell the cylinders without bidding to third parties in violation of company rules; (4) Agad failed to submit the periodic inventory report of the LPG cylinders to the accounting department; (5) Agad did not remit the proceeds of the sale of the LPG cylinders; and (6) even if considered as scrap materials, the LPG cylinders still had monetary value which Agad cannot appropriate for himself without Caltex’s consent. Considering these findings, it is clear that Agad committed a serious infraction amounting to theft of company property. This act is akin to a serious misconduct or willful disobedience by the employee of the lawful orders of his employer in connection with his work, a just cause for termination of employment recognized under Article 282(a) of the Labor Code. Misconduct has been defined as a 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 in judgment. To be serious, the misconduct must be of such grave and aggravated character.[33] Further, Agad’s conduct constitutes willful breach of the trust reposed in him, another just cause for termination of employment recognized under Article 282(c) of the Labor Code. Loss of trust and confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. The employee must be invested with confidence on delicate matters, such as the custody, handling, care and protection of the employer’s property and funds.[34] As a superintendent, Agad occupied a position tasked to perform key and sensitive functions which necessarily involved the custody and protection of Caltex’s properties. Consequently, Agad comes within the purview of the trust and confidence rule. In Sagales v. Rustan’s Commercial Corporation,[35] we held that in loss of trust and confidence, as a just cause for dismissal, it is sufficient that there must only be some basis for the loss of trust and confidence or that there is reasonable ground to believe, if not to entertain the moral conviction, that the employee concerned is responsible for the misconduct and that his participation in the misconduct rendered him absolutely unworthy of trust and confidence. In sum, even if Agad did not commit the alleged charge of fictitious reimbursement of crating expense, he was found to have acted without authority, a serious infraction amounting to theft of company property, in the withdrawal and sale of the 190 pieces of LPG cylinders owned by the company. Caltex, as the employer, has discharged the burden of proof necessary in terminating the services of Agad, who was ascertained to have blatantly abused his position and authority. Thus, Agad’s dismissal from employment based on (1) acts tantamount to serious misconduct or willful violation of company rules and regulations; and (2) willful breach of trust and confidence as Depot Superintendent was lawful and valid under the circumstances as mandated by Article 282 (a) and (c) of the Labor Code. WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 22 May 2003 and Resolution dated 27 January 2004 of the Court of Appeals in CA-G.R. SP No. 74199. We DECLARE as valid the termination from employment of respondent Hermie G. Agad for just causes prescribed under the law. SO ORDERED.

GENERAL MILLING CORPORATION, Petitioner, - versus - ERNESTO CASIO, ROLANDO IGOT, MARIO FAMADOR, NELSON LIM, FELICISIMO BOOC, PROCOPIO OBREGON, JR., and ANTONIO ANINIPOK, Respondents, and VIRGILIO PINO, PAULINO CABREROS, MA. LUNA P. JUMAOAS, DOMINADOR BOOC, FIDEL VALLE, BARTOLOME AUMAN, REMEGIO CABANTAN, LORETO GONZAGA, EDILBERTO MENDOZA and ANTONIO PANILAG, Respondents. | x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x D E C I S I O N

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision[1] dated March 30, 2001 and Resolution[2] dated July 18, 2001 of the Court of Appeals in CA-G.R. SP No. 40280, setting aside the Voluntary Arbitration Award[3] dated August 16, 1995 of the National Conciliation and Mediation Board (NCMB), Cebu City, in VA Case No. AC 389-01-01-95. Voluntary Arbitrator Alice K. Canonoy-Morada (Canonoy-Morada) dismissed the Complaint filed by respondents Ernesto Casio, Rolando Igot, Mario Famador, Nelson Lim, Felicisimo Booc, Procopio Obregon, Jr. and Antonio Aninipok (Casio, et al.) against petitioner General Milling Corporation (GMC) for unfair labor practice, illegal suspension, illegal dismissal, and payment of moral and exemplary damages. The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 Chapter (Local 31) was the sole and exclusive bargaining agent of the rank and file employees of GMC in Lapu-Lapu City. On November 30, 1991, IBM-Local 31, through its officers and board members, namely, respondents Virgilio Pino,[4] Paulino Cabreros, Ma. Luna P. Jumaoas, Dominador Booc, Bartolome Auman, Remegio Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto Mendoza and Antonio Panilag (Pino, et al.), entered into a Collective Bargaining Agreement (CBA) with GMC. The effectivity of the said CBA was retroactive to August 1, 1991.[5] The CBA contained the following union security provisions: Section 3. MAINTENANCE OF MEMBERSHIP – All employees/workers employed by the Company with the exception of those who are specifically excluded by law and by the terms of this Agreement must be members in good standing of the Union within thirty (30) days upon the signing of this agreement and shall maintain such membership in good standing thereof as a condition of their employment or continued employment. Section 6. The Company, upon written request of the Union, shall terminate the services of any employee/worker who fails to fulfill the conditions set forth in Sections 3 and 4 thereof, subject however, to the provisions of the Labor Laws of the Philippines and their Implementing Rules and Regulations. The Union shall absolve the Company from any and all liabilities, pecuniary or otherwise, and responsibilities to any employee or worker who is dismissed or terminated in pursuant thereof.[6] Casio, et al. were regular employees of GMC with daily earnings ranging from P173.75 to P201.50, and length of service varying from eight to 25 years.[7] Casio was elected IBM-Local 31 President for a three-year term in June 1991, while his co-respondents were union shop stewards. In a letter[8] dated February 24, 1992, Rodolfo Gabiana (Gabiana), the IBM Regional Director for Visayas and Mindanao, furnished Casio, et al. with copies of the Affidavits of GMC employees Basilio Inoc and Juan Potot, charging Casio, et al. with “acts inimical to the interest of the union.” Through the same letter, Gabiana gave Casio, et al. three days from receipt thereof within which to file their answers or counter-affidavits. However, Casio, et al. refused to acknowledge receipt of Gabiana’s letter. Subsequently, on February 29, 1992, Pino, et al., as officers and members of the IBM-Local 31, issued a Resolution[9] expelling Casio, et al. from the union. Pertinent portions of the Resolution are reproduced below: Whereas, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr., Antonio Aninipok, Mario Famador, Nelson Lim and Ernesto Casio, through Ernesto Casio have refused to acknowledge receipt of the letter-complaint dated February 24, 1992, requiring them to file their answer[s] or counter-affidavits as against the charge of “acts inimical to the interest of the union” and that in view of such refusal to acknowledge receipt, a copy of said letter complaint was dropped or left in front of E. Casio;

Whereas, the three (3)[-]day period given to file their answer or counter-affidavit have already lapsed prompting the union Board to investigate the charge ex parte; Whereas, after such ex parte investigation the said charge has been more than adequately substantiated by the affidavits/witnesses and documentary exhibits presented. NOW, THEREFORE, RESOLVED as it is hereby RESOLVED, that Ernesto Casio, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr., Antonio Aninipok, Mario Famador and Nelson Lim be expelled as union member[s] of good standing effectively immediately. RESOLVED FURTHER, to furnish copy of this Resolution to the GMC Management for their information and guidance with the recommendation as it is hereby recommended to dismiss the above-named employees from work.

Gabiana then wrote a letter[10] dated March 10, 1992, addressed to Eduardo Cabahug (Cabahug), GMC Vice-President for Engineering and Plant Administration, informing the company of the expulsion of Casio, et al. from the union pursuant to the Resolution dated February 29, 1992 of IBM-Local 31 officers and board members. Gabiana likewise requested that Casio, et al. “be immediately dismissed from their work for the interest of industrial peace in the plant.” Gabiana followed-up with another letter[11] dated March 19, 1992, inquiring from Cabahug why Casio, et al. were still employed with GMC despite the request of IBM-Local 31 that Casio, et al. be immediately dismissed from service pursuant to the closed shop provision in the existing CBA. Gabiana reiterated the demand of IBM-Local 31 that GMC dismiss Casio, et al., with the warning that failure of GMC to do so would constitute gross violation of the existing CBA and constrain the union to file a case for unfair labor practice against GMC.

Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to Gabiana’s request to terminate the employment of Casio, et al. GMC issued a Memorandum dated March 24, 1992 terminating the employment of Casio, et al. effective April 24, 1992 and placing the latter under preventive suspension for the meantime.

On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed a Notice of Strike with the NCMB-Regional Office No. VII (NCMB-RO). Casio, et al. alleged as bases for the strike the illegal dismissal of union officers and members, discrimination, coercion, and union busting. The NCMB-RO held conciliation proceedings, but no settlement was reached among the parties.[12] Casio, et al. next sought recourse from the National Labor Relations Commission (NLRC) Regional Arbitration Branch VII by filing on August 3, 1992 a Complaint against GMC and Pino, et al. for unfair labor practice, particularly, the termination of legitimate union officers, illegal suspension, illegal dismissal, and moral and exemplary damages. Their Complaint was docketed as NLRC Case No. RAB-VII-08-0639-92.[13] Finding that NLRC Case No. RAB-VII-08-0639-92 did not undergo voluntary arbitration, the Labor Arbiter dismissed the case for lack of jurisdiction, but endorsed the same to the NCMB-RO. Prior to undergoing voluntary arbitration before the NCMB-RO, however, the parties agreed to first submit the case to the grievance machinery of IBM-Local 31. On September 7, 1994, Casio, et al. filed their Complaint with Pino, the Acting President of IBM-Local 31. Pino acknowledged receipt of the Complaint and assured Casio, et al. that they would be “seasonably notified of whatever decision and/or action the Board may have in the instant case.”[14] When the IBM-Local 31 Board failed to hold grievance proceedings on the Complaint of Casio, et al., NCMB Voluntary Arbitrator Canonoy-Morada assumed jurisdiction over the same. The Complaint was docketed as VA Case No. AC 389-01-01-95. Based on the Position Papers and other documents submitted by the parties,[15] Voluntary Arbitrator Canonoy-Morada rendered on August 16, 1995 a Voluntary Arbitration Award dismissing the Complaint in VA Case No. AC 389-01-01-95 for lack of merit, but granting separation pay and attorney’s fees to Casio, et al. The Voluntary Arbitration Award presented the following findings: (1) the termination by GMC of the employment of Casio, et al. was in valid compliance with the closed shop provision in the CBA; (2) GMC had no competence to determine the good standing of a union member; (3) Casio, et al. waived their right to due process when they refused to receive Gabiana’s letter dated February 24, 1992, which required them to submit their answer to the charges against them; (4) the preventive suspension of Casio, et al. by GMC was an act of self-defense; and (5) the IBM-Local 31 Resolution dated February 29, 1992 expelling Casio, et al. as union members, also automatically ousted them as union officers.[16] The dispositive portion of the Voluntary Arbitration Award reads: WHEREFORE, above premises considered, this case filed by [Casio, et al.] is hereby ordered DISMISSED for lack of merit. Since the dismissal is not for a cause detrimental to the interest of the company, respondent General Milling Corporation is, nonetheless, ordered to pay separation pay to all [Casio, et al.] within seven (7) calendar days upon receipt of this order at the rate of one-half month per year of service reckoned from the time of their employment until the date of their separation on March 24, 1992, thus: Employee Date Hired Rate/Month Service Total (1/2 mo/yr of service) Casio April 24/74 P2,636.29 x 18 years = P47,453.22
Igot May 1980 P2,472.75 x 12 years = P29,673.00
Famador Feb. 1977 P2,498.92 x 15 years = P37,483.80
Lim Aug. 1975 P2,466.21 x 17 years = P41,925.57
Booc Aug. 1978 P2,498.92 x 14 years = P34,984.88
Obregon May 1984 P2,273.23 x 08 years = P18,185.84
Aninipok Sept. 1967 P2,616.01 x 25 years = P65,400.25 The attorney’s fees for [Casio, et al.’s] counsel shall be ten percent (10%) of the total amount due them; and shall be shared proportionately by all of the same [Casio, et al.]. All other claims are hereby denied.[17]

Dissatisfied with the Voluntary Arbitration Award, Casio, et al. went to the Court of Appeals by way of a Petition for Certiorari under Rule 65 of the Rules of Court to have said Award set aside. The Court of Appeals granted the writ of certiorari and set aside the Voluntary Arbitration Award. The appellate court ruled that while the dismissal of Casio, et al., was made by GMC pursuant to a valid closed shop provision under the CBA, the company, however, failed to observe the elementary rules of due process in implementing the said dismissal. Consequently, Casio, et al. were entitled to reinstatement with backwages from the time of their dismissal up to the time of their reinstatement. Nevertheless, the Court of Appeals did not hold GMC liable to Casio, et al. for moral and exemplary damages and attorney’s fees, there being no showing that their dismissal was attended by bad faith or malice, or that the dismissal was effected in a wanton, oppressive, or malevolent manner, given that GMC merely accommodated the request of IBM-Local 31. The appellate court, instead, made Pino, et al. liable to Casio, et al., for moral and exemplary damages and attorney’s fees, since it was on the basis of the imputations and actuations of Pino,et al. that Casio, et al. were illegally dismissed from employment. The Court of Appeals thus decreed: WHEREFORE, the assailed award is hereby SET ASIDE, and private respondent General Milling Corporation is hereby ordered to reinstate [Casio, et al.] to their former positions without loss of seniority rights, and to pay their full backwages, solidarily with [Pino, et al.]. Further, [Pino, et al.] are ordered to indemnify each of [Casio, et al.] in the form of moral and exemplary damages in the amounts of P50,000.00 and P30,000.00, respectively, and to pay attorney’s fees.[18]

The Motion for Reconsideration of GMC was denied by the Court of Appeals in the Resolution dated July 18, 2001. Hence, GMC filed the instant Petition for Review, arguing that: I THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION WHEN IT SET ASIDE THE AWARD OF THE VOLUNTARY ARBITRATOR, AND IN AWARDING REINSTATEMENT AND FULL BACKWAGES TO [Casio, et al.]. II THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT SAID THAT PETITIONER GMC FAILED TO ACCORD DUE PROCESS TO [Casio, et al.]. III THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION WHEN IT DID NOT ABSOLVE PETITIONER GMC OF ANY LIABILITY AND INSTEAD RULED THAT IT WAS SOLIDARILY LIABLE WITH THE UNION OFFICERS FOR THE PAYMENT OF FULL BACKWAGES TO [Casio, et al.].

At this point, we take note that Pino, et al. did not appeal from the decision of the Court of Appeals. GMC avers that in reviewing and reversing the findings of the Voluntary Arbitrator, the Court of Appeals departed from the principle of conclusiveness of the trial judge’s findings. GMC also claims that the findings of the Voluntary Arbitrator as to the legality of the termination from employment of Casio, et al. are well supported by evidence. GMC further insists that before IBP-Local 31 expelled Casio, et al. from the union and requested GMC to dismiss Casio, et al. from service pursuant to the closed shop provision in the CBA, IBP-Local 31 already accorded Casio, et al. due process, only that Casio, et al. refused to avail themselves of such opportunity. GMC additionally maintains that Casio, et al. were expelled by IBP-Local 31 for “acts inimical to the interest of the union,” and GMC had no authority to inquire into or rule on which employee-member is or is not loyal to the union, this being an internal affair of the union. Thus, GMC had to rely on the presumption that Pino, et al. regularly performed their duties and functions as IBP-Local 31 officers and board members, when the latter investigated and ruled on the charges against Casio, et al.[19] GMC finally asserts that Pino, et al., the IBP-Local 31 officers and board members who resolved to expel Casio, et al. from the union, and not GMC, should be held liable for the reinstatement of and payment of full backwages to Casio, et al. for the company had acted in good faith and merely complied with the closed shop provision in the CBA. On the other hand, Casio, et al. counters that GMC failed to identify the specific pieces of evidence supporting the findings of the Voluntary Arbitrator. Casio, et al. contends that to accord them due process, GMC itself, as the employer, should have held proceedings distinct and separate from those conducted by IBM-Local 31. GMC cannot justify its failure to conduct its own inquiry using the argument that such proceedings would constitute an intrusion by the company into the internal affairs of the union. The claim of GMC that it had acted in good faith when it dismissed Casio, et al. from service in accordance with the closed shop provision of the CBA is inconsistent with the failure of the company to accord the dismissed employees their right to due process. In general, in a “petition for review on certiorari as a mode of appeal under Rule 45 of the Rules of Court, the petitioner can raise only questions of law - the Supreme Court is not the proper venue to consider a factual issue as it is not a trier of facts. A departure from the general rule may be warranted where the findings of fact of the Court of Appeals are contrary to the findings and conclusions of the trial court [or quasi-judicial agency, as the case may be], or when the same is unsupported by the evidence on record.”[20] Whether Casio, et al. were illegally dismissed without any valid reason is a question of fact better left to quasi-judicial agencies to determine. In this case, the Voluntary Arbitrator was convinced that Casio, et al. were legally dismissed; while the Court of Appeals believed the opposite, because even though the dismissal of Casio, et al. was made by GMC pursuant to a valid closed shop provision in the CBA, the company still failed to observe the elementary rules of due process. The Court is therefore constrained to take a second look at the evidence on record considering that the factual findings of the Voluntary Arbitrator and the Court of Appeals are contradictory. There are two aspects which characterize the concept of due process under the Labor Code: one is substantive – whether the termination of employment was based on the provision of the Labor Code or in accordance with the prevailing jurisprudence; the other is procedural – the manner in which the dismissal was effected.[21] After a thorough review of the records, the Court agrees with the Court of Appeals. The dismissal of Casio, et al. was indeed illegal, having been done without just cause and the observance of procedural due process. In Alabang Country Club, Inc. v. National Labor Relations Commission,[22] the Court laid down the grounds for which an employee may be validly terminated, thus: Under the Labor Code, an employee may be validly terminated on the following grounds: (1) just causes under Art. 282; (2) authorized causes under Art. 283; (3) termination due to disease under Art. 284, and (4) termination by the employee or resignation under Art. 285. Another cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. x x x. (Emphasis ours.)

“Union security” is a generic term, which is applied to and comprehends “closed shop,” “union shop,” “maintenance of membership,” or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part.[23] Union security clauses are recognized and explicitly allowed under Article 248(e) of the Labor Code, which provides that:

Art. 248. Unfair Labor Practices of Employers. (e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. (Emphasis supplied.)

It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. For this reason, the law has allowed stipulations for “union shop” and “closed shop” as means of encouraging workers to join and support the union of their choice in the protection of their rights and interest vis-à-vis the employer.[24] Moreover, a stipulation in the CBA authorizing the dismissal of employees are of equal import as the statutory provisions on dismissal under the Labor Code, since “a CBA is the law between the company and the union and compliance therewith is mandated by the express policy to give protection to labor.”[25] In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA.[26] There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its good standing as a union member.
It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to terminate the employment of Casio, et al. as a necessary consequence of their expulsion from the union. It is the third requisite – that there is sufficient evidence to support the decision of IBM-Local 31 to expel Casio, et al. – which appears to be lacking in this case. The full text of the individual but identical termination letters,[27] served by GMC on Casio, et al., is very revealing. They read: To: [Employee’s Name]
From: Legal Counsel
Subject: Dismissal Upon Union Request Thru CBA Closed Shop Provision The company is in receipt of two letters dated March 10, 1992 and March 19, 1992 respectively from the union at the Mill in Lapulapu demanding the termination of your employment pursuant to the closed shop provision of our existing Collective Bargaining Agreement. It appears from the attached resolutions that you have been expelled from union membership and has thus ceased to become a member in good standing. The resolutions are signed by the same officers who executed and signed our existing CBA, copies of the letters and resolutions are enclosed hereto for your reference. The CBA in Article II provides the following: Section 3. MAINTENANCE OF MEMBERSHIP – All employees/workers employed by the Company with the exception of those who are specifically excluded by law and by the terms of this Agreement must be members in good standing of the Union within thirty (30) days upon the signing of this agreement and shall maintain such membership in good standing thereof as a condition of their employment or continued employment.

Section 6. The Company, upon written request of the Union, shall terminate the services of any employee/worker who fails to fulfill the conditions set forth in Sections 3 and 4 thereof, subject however, to the provisions of the Labor Laws of the Philippines and their Implementing Rules and Regulations. The Union shall absolve the Company from any and all liabilities, pecuniary or otherwise, and responsibilities to any employee or worker who is dismissed or terminated in pursuant thereof. The provisions of the CBA are clear enough. The termination of employment on the basis of the closed shop provision of the CBA is well recognized in law and in jurisprudence. There is no valid ground to refuse to terminate. On the other hand as pointed out in the union’s strongly demanding letter dated March 19, 1992, the company could be sued for unfair labor practice. While we would have wanted not to accommodate the union’s request, we are left with no other option. The terms of the CBA should be respected. To refuse to enforce the CBA would result in the breakdown of industrial peace and the end of harmonious relations between the union and management. The company would face the collective anger and enmity of its employees who are union members. In the light of the union’s very insistent demand, verbal and in writing and to avoid the union accusation of “coddling” you, and considering the explicitly mandatory language of the closed shop provision of the CBA, the company is constrained to terminate your employment, to give you ample time to look and find another employment, and/or exert efforts to become again a member of good standing of your union, effective April 24, 1992. In the meantime, to prevent serious danger to the life and property of the company and of its employees, we are placing you under preventive suspension beginning today. It is apparent from the aforequoted letter that GMC terminated the employment of Casio, et al. relying upon the Resolution dated February 29, 1992 of Pino, et al. expelling Casio, et al. from IBM-Local 31; Gabiana’s Letters dated March 10 and 19, 1992 demanding that GMC terminate the employment of Casio, et al. on the basis of the closed shop clause in the CBA; and the threat of being sued by IBM-Local 31 for unfair labor practice. The letter made no mention at all of the evidence supporting the decision of IBM-Local 31 to expel Casio, et al. from the union. GMC never alleged nor attempted to prove that the company actually looked into the evidence of IBM-Local 31 for expelling Casio, et al. and made a determination on the sufficiency thereof. Without such a determination, GMC cannot claim that it had terminated the employment of Casio, et al. for just cause.
The failure of GMC to make a determination of the sufficiency of evidence supporting the decision of IBM-Local 31 to expel Casio, et al. is a direct consequence of the non-observance by GMC of procedural due process in the dismissal of employees. As a defense, GMC contends that as an employer, its only duty was to ascertain that IBM-Local 31 accorded Casio, et al. due process; and, it is the finding of the company that IBM-Local 31 did give Casio, et al. the opportunity to answer the charges against them, but they refused to avail themselves of such opportunity. This argument is without basis. The Court has stressed time and again that allegations must be proven by sufficient evidence because mere allegation is definitely not evidence.[28] Once more, in Great Southern Maritime Services Corporation. v. Acuña,[29] the Court declared: Time and again we have ruled that in illegal dismissal cases like the present one, the onus of proving that the employee was not dismissed or if dismissed, that the dismissal was not illegal, rests on the employer and failure to discharge the same would mean that the dismissal is not justified and therefore illegal. Thus, petitioners must not only rely on the weakness of respondents’ evidence but must stand on the merits of their own defense. A party alleging a critical fact must support his allegation with substantial evidence for any decision based on unsubstantiated allegation cannot stand as it will offend due process. x x x. (Emphasis supplied.)

The records of this case are absolutely bereft of any supporting evidence to substantiate the bare allegation of GMC that Casio, et al. were accorded due process by IBM-Local 31. There is nothing on record that would indicate that IBM-Local 31 actually notified Casio, et al. of the charges against them or that they were given the chance to explain their side. All that was stated in the IBM-Local 31 Resolution dated February 29, 1992, expelling Casio, et al. from the union, was that “a copy of the said letter complaint [dated February 24, 1992] was dropped or left in front of E. Casio.”[30] It was not established that said letter-complaint charging Casio, et al. with acts inimical to the interest of the union was properly served upon Casio, that Casio willfully refused to accept the said letter-notice, or that Casio had the authority to receive the same letter-notice on behalf of the other employees similarly accused. It’s worthy to note that Casio, et al. were expelled only five days after the issuance of the letter-complaint against them. The Court cannot find proof on record when the three-day period, within which Casio, et al. was supposed to file their answer or counter-affidavits, started to run and had expired. The Court is likewise unconvinced that the said three-day period was sufficient for Casio, et al. to prepare their defenses and evidence to refute the serious charges against them. Contrary to the position of GMC, the acts of Pino, et al. as officers and board members of IBM-Local 31, in expelling Casio, et al. from the union, do not enjoy the presumption of regularity in the performance of official duties, because the presumption applies only to public officers from the highest to the lowest in the service of the Government, departments, bureaus, offices, and/or its political subdivisions.[31] More importantly, in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.,[32] the Court issued the following reminder to employers: The power to dismiss is a normal prerogative of the employer. However, this is not without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. x x x. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should therefore respect and protect the rights of their employees, which include the right to labor. x x x.

The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos[33] that: While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees’ right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be accorded a separate hearing by respondent company. (Emphases supplied.)

The twin requirements of notice and hearing constitute the essential elements of procedural due process. The law requires the employer to furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the employer’s decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.[34] Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the CBA. The rights of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own union are not wiped away by a union security clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company which disregards his rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and hence dismissal from his job.[35] In the case at bar, Casio, et al. did not receive any other communication from GMC, except the written notice of termination dated March 24, 1992. GMC, by its own admission, did not conduct a separate and independent investigation to determine the sufficiency of the evidence supporting the expulsion of Casio, et al. by IBP-Local 31. It straight away acceded to the demand of IBP-Local 31 to dismiss Casio, et al. The very same circumstances took place in Liberty Cotton Mills, wherein the Court held that the employer-company acted in bad faith in dismissing its workers without giving said workers an opportunity to present their side in the controversy with their union, thus: While respondent company, under the Maintenance of Membership provision of the Collective Bargaining Agreement, is bound to dismiss any employee expelled by PAFLU for disloyalty, upon its written request, this undertaking should not be done hastily and summarily. The company acted in bad faith in dismissing petitioner workers without giving them the benefit of a hearing. It did not even bother to inquire from the workers concerned and from PAFLU itself about the cause of the expulsion of the petitioner workers. Instead, the company immediately dismissed the workers on May 30, 1964 after its receipt of the request of PAFLU on May 29, 1964 – in a span of only one day – stating that it had no alternative but to comply with its obligation under the Security Agreement in the Collective Bargaining Agreement, thereby disregarding the right of the workers to due process, self-organization and security of tenure.[36] (Emphasis ours.)

In sum, the Court finds that GMC illegally dismissed Casio, et al. because not only did GMC fail to make a determination of the sufficiency of evidence to support the decision of IBM-Local 31 to expel Casio, et al., but also to accord the expelled union members procedural due process, i.e., notice and hearing, prior to the termination of their employment Consequently, GMC cannot insist that it has no liability for the payment of backwages and damages to Casio, et al., and that the liability for such payment should fall only upon Pino, et al., as the IBP-Local 31 officers and board members who expelled Casio, et al. GMC completely missed the point that the expulsion of Casio, et al. by IBP-Local 31 and the termination of employment of the same employees by GMC, although related, are two separate and distinct acts. Despite a closed shop provision in the CBA and the expulsion of Casio, et al. from IBP-Local 31, law and jurisprudence imposes upon GMC the obligation to accord Casio, et al. substantive and procedural due process before complying with the demand of IBP-Local 31 to dismiss the expelled union members from service. The failure of GMC to carry out this obligation makes it liable for illegal dismissal of Casio, et al. In Malayang Samahan ng mga Manggagawa sa M. Greenfield,[37] the Court held that notwithstanding the fact that the dismissal was at the instance of the federation and that the federation undertook to hold the company free from any liability resulting from the dismissal of several employees, the company may still be held liable if it was remiss in its duty to accord the would-be dismissed employees their right to be heard on the matter. An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement but if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Thus, Casio, et al. are entitled to backwages and separation pay considering that reinstatement is no longer possible because the positions they previously occupied are no longer existing, as declared by GMC.[38]
Casio, et al., having been compelled to litigate in order to seek redress for their illegal dismissal, are entitled to the award of attorney’s fees equivalent to 10% of the total monetary award.[39] WHEREFORE, the instant petition is hereby DENIED. The assailed decision of the Court of Appeals dated March 30, 2001 in CA-G.R. SP No. 40280 isAFFIRMED. SO ORDERED.

Republic of the Philippines
Supreme Court
Manila

THIRD DIVISION x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x D E C I S I O N PERALTA, J.: | Before this Court is a Petition for Review on certiorari,[1] under Rule 45 of the Rules of Court, seeking to set aside the May 28, 2004 Decision[2] and October 28, 2004 Resolution[3] of the Court of Appeals (CA), in CA-G.R. SP No. 76879. The CA awarded financial assistance to respondents Rodolfo Bombita et al. out of “compassionate justice” despite the fact that petitioner Solidbank Corporation had already paid the respondents their separation pay in accordance with Article 283 of the Labor Code. The facts of the case are as follows: Sometime in May 2000, petitioner decided to cease its commercial banking operations and forthwith surrendered to the Bangko Central ng Pilipinas its expanded banking license. As a result of petitioner’s decision to cease its operations, 1,867 of its employees would be terminated. On July 25, 2000, petitioner sent individual letters to its employees, including respondents, advising them of its decision to cease operations and informing them that their employment would be terminated. The pertinent portions of said letter are hereunder reproduced, to wit: With the cessation of the banking operations of Solidbank Corporation and the surrender of its banking license to the Bangko Sentral ng Pilipinas (BSP), the employment of all Solidbankers will have to be terminated. We regret that your services as an employee of Solidbank are hereby terminated, effective the close of business hours on 31 August 2000. Your separation package will be in accordance with the implementing guidelines issued to all officers and staff in President/CEO D.N. Vistan’s Memorandum of 14 July 2000. You will receive your separation pay only upon release of your clearance, but not later than the effectivity date of your termination from the Bank. We wish you success in your future endeavors.[4]

On July 31, 2000, petitioner sent to the Department of Labor and Employment a letter[5] dated July 28, 2000, informing said office of the termination of its employees, the pertinent portions of which read: In compliance with the provisions of Article 283 of the Labor Code, we would like to inform the Department of Labor and Employment that Solidbank Corporation will cease operations and surrender its banking license to the Bangko Sentral ng Pilipinas effective 31 August 2000. Due to the cessation of the Bank’s operations, the employment of all officers and staff of Solidbank will be terminated effective the close of business hours on 31 August 2000. As a result, the Bank will implement a separation program in accordance with the attached guidelines. The separation package offered to Solidbankers is more than what is required by law.[6]

Petitioner granted to its employees separation pay equivalent to 150% of gross monthly pay per year of service, and cash equivalent of earned and accrued vacation and sick leaves as a result of their dismissal. Upon receipt of their separation pay, the employees of petitioner, including respondents, individually signed a “Release, Waiver, and Quitclaim.”[7] On September 27, 2000, respondents filed with the Labor Arbiter (LA) complaints for illegal dismissal, underpayment of separation pay, plus damages and attorney’s fees, and these were docketed as NLRC NCR Case Nos. 30-09-03843-00, 30-1004350-00, 30-10-03928-00, 30-10-04200-00, and 30-10-04036-00. On July 22, 2002, the LA rendered a Decision[8] ruling that respondents were validly terminated from employment as a result of petitioner’s decision to cease its banking operations. The LA, however, inspired by compassionate justice, awarded financial assistance of one month’s salary to respondents. The dispositive portion of the Decision reads:

WHEREFORE, the Complaints for illegal dismissal filed by the complainants under the above-stated case numbers are hereby dismissed for lack of merit. However, inspired by compassionate justice, this Office hereby orders the respondent Solidbank Corporation to provide each complainant a financial assistance of one month’s salary. Metrobank’s motion to dismiss the claim against it for want of jurisdiction is DENIED for lack of merit.

Complainants’ motion to admit annexes dated March 12, 2001, together with their motions to amend affidavits/complaints dated January 22, 2001 are hereby GRANTED for being meritorious. Solidbank’s counterclaim is dismissed for lack of merit. SO ORDERED.[9] Both parties appealed the LA’s Decision to the National Labor Relations Commission (NLRC). On October 29, 2002, the NLRC rendered a Decision[10] affirming the findings of the LA that respondents were validly terminated. The NLRC ruled that the closure of a business is an authorized cause sanctioned under Article 283 of the Labor Code and one that is ultimately a management prerogative. The NLRC, however, modified the LA’s Decision by increasing the amount of financial assistance to two month’s salary out of compassionate justice. The dispositive portion of the Decision reads: WHEREFORE, premises considered, the Decision appealed from is affirmed with modification as to the award of the financial assistance. SO ORDERED.[11]

Aggrieved by the NLRC Decision, petitioner then appealed to the CA, specifically questioning the grant of financial assistance to respondents. On May 28, 2004, the CA rendered a Decision reversing the Decision of the NLRC. The CA shared the view of the LA that respondents should only be awarded one month’s salary as financial assistance and not two month’s salary as previously decreed by the NLRC. The dispositive portion of the Decision reads: WHEREFORE, premises considered, the assailed Decision is hereby REVERSED, and the 22 July 2002 Decision of the Labor Arbiter is hereby REINSTATED. SO ORDERED.[12] Petitioner then filed a motion for reconsideration, which was, however, denied by the CA in a Resolution dated October 28, 2004. Hence, herein petition, with petitioner raising the following assignment of errors, to wit: THERE IS NO LEGAL BASIS FOR THE COURT OF APPEALS’ AWARD OF FINANCIAL ASSISTANCE EQUIVALENT TO ONE-MONTH’S SALARY TO THE RESPONDENTS AFTER ITS FINDING THAT SOLIDBANK HAS MORE THAN COMPLIED WITH THE MANDATE OF THE LAW ON PAYMENT OF SEPARATION PAY.[13] THE AWARD OF FINANCIAL ASSISTANCE CANNOT BE JUSTIFIED ON THE BASIS OF “COMPASSIONATE JUSTICE” AND AS A FORM OF “EQUITABLE RELIEF.”[14] TO SUSTAIN THE COURT OF APPEALS’ AWARD OF FINANCIAL ASSISTANCE TO THE 140 VALIDLY-DISMISSED RESPONDENTS WOULD RESULT IN A HIGHLY ANOMALOUS SITUATION WHERE THE SAID RESPONDENTS WOULD BE ACCORDED BETTER BENEFITS THAN OTHER FORMER SOLIDBANK EMPLOYEES WHO WERE SIMILARLY SITUATED.[15] The petition is meritorious. The errors being interrelated, this Court shall discuss the same seriatim. Before anything else, this Court shall first address the allegations raised by respondents in their Comment,[16] which deal with the issue of the validity of their termination. Respondents, in the main, claim that their termination was unlawful as petitioner did not really cease its operations.[17] Thus, notwithstanding their admission that the LA, the NLRC, and the CA all ruled in unison that their termination was in accordance with law, respondents seek this Court’s discretion to reverse such findings. On this note, it is well settled that this Court is not a trier of facts. To begin with, the question of whether respondents were dismissed for authorized cause is a question of fact which is beyond the province of a petition for review on certiorari. It is fundamental that the scope of the Supreme Court’s judicial review under Rule 45 of the Rules of Court is confined only to errors of law. It does not extend to questions of fact; more so, in labor cases where the doctrine applies with greater force.[18] The LA and the NLRC have already determined the factual issues, and these were affirmed by the CA. Thus, they are accorded not only great respect but also finality, and are deemed binding upon this Court so long as they are supported by substantial evidence. A heavy burden rests upon respondents to convince the Court that it should take exception from such a settled rule.[19] Moreover, what is damning to the cause of the respondents is the fact that the issue of the validity of their dismissal is now already final. As correctly manifested by petitioner, respondents had earlier filed with this Court a petition for review[20] dated December 28, 2004, docketed as G.R. No. 165985, entitled Rodolfo Bombita, et al. v. Solidbank Corporation, et al., which questioned the validity of their termination. A perusal of said petition shows that the issues raised therein are the very same issues respondents now raise in their Comment. On February 21, 2005, this Court’s Second Division issued a Resolution[21] denying respondents’ petition for review. On September 20, 2005, an Entry of Judgment[22] was rendered. Based on the foregoing, the validity of the termination of respondents is an issue that this Court must no longer look into as a necessary consequence of the denial of their petition for review before this Court. Now, going to the issues raised by petitioner, this Court finds the same to be impressed with merit. Article 283 of the Labor Code provides: ARTICLE 283. Closure of establishment and reduction of personnel. - The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. [23]

Based on Article 283, in case of cessation of operations, the employer is only required to pay his employees a separation pay of one month pay or at least one-half month pay for every year of service, whichever is higher. That is all that the law requires. In the case at bar, petitioner paid respondents the following: (a) separation pay computed at 150% of their gross monthly pay per year of service; and (b) cash equivalent of earned and accrued vacation and sick leaves. Clearly, petitioner had gone over and above the requirements of the law. Despite this, however, petitioner has been ordered to pay respondents an additional amount, equivalent to one month’s salary, as a form of financial assistance. The LA awarded the financial assistance out of “compassionate justice.” The CA affirmed such grant also out of “compassionate justice” and as a form of “equitable relief” for the employees who were suddenly dismissed due to exigencies of business.[24] After a thorough consideration of the circumstances at bar, this Court finds that the award of financial assistance is bereft of legal basis and serves to penalize petitioner who has complied with the requirements of the law. It behooves this Court as to why the CA affirmed the grant of financial assistance notwithstanding its pronouncement that it would be inequitable to allow respondents to receive benefits than those prescribed by law and jurisprudence, to wit: In the instant case, both the Labor Arbiter and the NLRC upheld the validity of the dismissal of the employees and of the quitclaim agreements between the affected employees and employer Solidbank. However, it was a strange occurrence when the NLRC granted an additional award of separation pay in an amount equivalent to two months salary to each employee. This means that Solidbank now has the obligation to pay the employees not only their wages, benefits and other privileges under the law, and separation pay in an amount equivalent to 150% of their one month’s pay, but also financial assistance equivalent to two months pay to each employee. Such a situation cannot be upheld by this Court. As discussed above, all that the law requires in cases of dismissal due to an authorized cause is that the employer must pay financial assistance or separation pay in an amount equivalent to “one month’s pay or one-half month’s for every year of service, whichever is higher.” Solidbank has complied with the mandate of the law. Hence, it would be unjust and inequitable to allow the employees to receive higher benefits than those prescribed by the Labor Code and jurisprudence.[25]

Moreover, a review of jurisprudence relating to the application of “compassionate and social justice” in granting financial assistance in labor cases shows that the same has been generally used in instances when an employee has been dismissed for a just cause under Article 282 of the Labor Code and not when an employee has been dismissed for anauthorized cause under Article 283. As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282[26] of the Labor Code is not entitled to separation pay.[27]Although by way of exception, the grant of separation pay or some other financial assistance may be allowed to an employee dismissed for just causes on the basis of equity.[28] The reason that the law does not statutorily grant separation pay or financial assistance in instances of termination due to a just cause is precisely because the cause for termination is due to the acts of the employee. In such instances, however, this Court, inspired by compassionate and social justice, has in the past awarded financial assistance to dismissed employees when circumstances warranted such an award. In Central Philippines Bandag Retreaders, Inc. v. Diasnes,[29] this Court discussed the parameters of awarding separation pay to dismissed employees as a measure of financial assistance, viz: To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the award of separation pay based on social justice when an employee’s dismissal is based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission of a crime against the person of the employer or his immediate family - grounds under Art. 282 of the Labor Code that sanction dismissals of employees. They must be most judicious and circumspect in awarding separation pay or financial assistance as the constitutional policy to provide full protection to labor is not meant to be an instrument to oppress the employers. The commitment of the Court to the cause of labor should not embarrass us from sustaining the employers when they are right, as here. In fine, we should be more cautious in awarding financial assistance to the undeserving and those who are unworthy of the liberality of the law.[30]

Thus, in Philippine Commercial International Bank v. Abad,[31] this Court, having considered the circumstances present therein and as a measure of social justice, awarded separation pay to a dismissed employee for a just cause under Article 282. The same concession was given by this Court in Aparente, Sr. v. National Labor Relations Commission[32] and Tanala v. National Labor Relations Commission.[33] Looking now at Article 283, this Court holds that the same was drafted by the legislature, taking the best interest of laborers in mind. It is clear that the causes of the termination of an employee under Article 283 are due to circumstances beyond their control, such as when management decides to reduce personnel based on valid grounds, or when the employer decides to cease operations. Thus, the bias towards labor is very apparent, as the employer is statutorily required to pay separation pay, the amount of which is also statutorily prescribed. While the CA should not be faulted for sympathizing with the plight of respondents as they suddenly lost their means of livelihood, this Court holds that it is precisely because of the sudden loss of employment − one that is beyond the control of labor − that the law statutorily grants separation pay and dictates how the same should be computed. Thus, any business establishment that decides to cease its operations has the burden of complying with the law. This Court should refrain from adding more than what the law requires, as the same is within the realm of the legislature. It bears to stress, however, that petitioner may, as it has done, grant on a voluntary and ex gratia basis, any amount more than what is required by the law, but to insist that more financial assistance be given is certainly something that this Court cannot countenance, as the same serves to penalize petitioner, which has already given more than what the law requires. Moreover, any award of additional financial assistance to respondents would put them at an advantage and in a better position than the rest of their co-employees who similarly lost their employment because of petitioner’s decision to cease its operations. Withal, the law, in protecting the rights of the laborers, authorizes neither oppression nor self-destruction of the employer. While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. The management also has its own rights, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, the Supreme Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine.[34] WHEREFORE, premises considered, the petition is GRANTED. The May 28, 2004 Decision and October 28, 2004 Resolution of the Court of Appeals, in CA-G.R SP No. 76879, are REVERSED and SET ASIDE. SO ORDERED.

[G.R. No. 141093. February 20, 2001]
PRUDENTIAL BANK and TRUST COMPANY, petitioner, vs. CLARITA T. REYES, respondent.
D E C I S I O N
GONZAGA-REYES, J.:
Before the Court is a petition for review on certiorari of the Decision,[1] dated October 15, 1999 of the Court of Appeals in C.A.-G.R. SP No. 30607 and of its Resolution, dated December 6, 1999 denying petitioner’s motion for reconsideration of said decision. The Court of Appeals reversed and set aside the resolution[2] of the National Labor Relations Commission (NLRC) in NLRC NCR CA No. 009364-95, reversing and setting aside the labor arbiter’s decision and dismissing for lack of merit private respondent’s complaint.[3]
The case stems from NLRC NCR Case No. 00-06-03462-92, which is a complaint for illegal suspension and illegal dismissal with prayer for moral and exemplary damages, gratuity, fringe benefits and attorney’s fees filed by Clarita Tan Reyes against Prudential Bank and Trust Company (the Bank) before the labor arbiter. Prior to her dismissal, private respondent Reyes held the position of Assistant Vice President in the foreign department of the Bank, tasked with the duties, among others, to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased, including the signing of transmittal letters covering the same.
After proceedings duly undertaken by the parties, judgment was rendered by Labor Arbiter Cornelio L. Linsangan, the dispositive portion of which reads:
“WHEREFORE, finding the dismissal of complainant to be without factual and legal basis, judgment is hereby rendered ordering the respondent bank to pay her back wages for three (3) years in the amount of P540,000.00 (P15,000.00 x 36 mos.). In lieu of reinstatement, the respondent is also ordered to pay complainant separation pay equivalent to one month salary for every year of service, in the amount of P420,000.00 (P15,000 x 28 mos.). In addition, the respondent should also pay complainant profit sharing and unpaid fringe benefits. Attorney’s fees equivalent to ten (10%) percent of the total award should likewise be paid by respondent.
SO ORDERED.”[4]
Not satisfied, the Bank appealed to the NLRC which, as mentioned at the outset, reversed the Labor Arbiter’s decision in its Resolution dated 24 March 1997. Private respondent sought reconsideration which, however, was denied by the NLRC in its Resolution of 28 July 1998. Aggrieved, private respondent commenced on October 28, 1998, a petition for certiorari before the Supreme Court.[5] The subject petition was referred to the Court of Appeals for appropriate action and disposition per resolution of this Court dated November 25, 1998, in accordance with the ruling in St. Martin Funeral Homes vs. NLRC.[6]
In its assailed decision, the Court of Appeals adopted the following antecedent facts leading to Reyes’s dismissal as summarized by the NLRC:
“The auditors of the Bank discovered that two checks, No. 011728-7232-146, in the amount of US$109,650.00, and No. 011730-7232-146, in the amount of US$115,000.00, received by the Bank on April 6, 1989, drawn by the Sanford Trading against Hongkong and Shanghai Banking Corporation, Jurong Branch, Singapore, in favor of Filipinas Tyrom, were not sent out for collection to Hongkong Shanghai Banking Corporation on the alleged order of the complainant until the said checks became stale.
The Bank created a committee to investigate the findings of the auditors involving the two checks which were not collected and became stale.
On March 8, 1991, the president of the Bank issued a memorandum to the complainant informing her of the findings of the auditors and asked her to give her side. In reply, complainant requested for an extension of one week to submit her explanation. In a subsequent letter, dated March 14, 1991, to the president, complainant stated that in view of the refusal of the Bank that she be furnished copies of the pertinent documents she is requesting and the refusal to grant her a reasonable period to prepare her answer, she was constrained to make a general denial of any misfeasance or malfeasance on her part and asked that a formal investigation be made.
As the complainant failed to attend and participate in the formal investigation conducted by the Committee on May 24, 1991, despite due notice, the Committee proceeded with its hearings and heard the testimonies of several witnesses.
The Committee’s findings were:
‘a) The two (2) HSBC checks were received by the Foreign Department on 6 April 1989. On the same day, complainant authorized the crediting of the account of Filipinas Tyrom in the amount of P4,780,102.70 corresponding to the face value of the checks, (Exhibits 6, 22 to 22-A and 23 to 23-A). On the following day, a transmittal letter was prepared by Ms. Cecilia Joven, a remittance clerk then assigned in the Foreign Department, for the purpose of sending out the two (2) HSBC checks for collection. She then requested complainant to sign the said transmittal letters (Exhibits 1, 7 and 25; TSN, 11 March 1993, pp. 42-52), as it is complainant who gives her instructions directly concerning the transmittal of foreign bills purchased. All other transmittal letters are in fact signed by complainant.
b) After Ms. Joven delivered the transmittal letters and the checks to the Accounting Section of the Foreign Department, complainant instructed her to withdraw the same for the purpose of changing the addressee thereon from American Express Bank to Bank of Hawaii (ibid.) under a special collection scheme (Exhibits 4 and 5 to 5-B).
c) After complying with complainant’s instruction, Ms. Joven then returned to complainant for the latter to sign the new transmittal letters. However, complainant told Ms. Joven to just hold on to the letters and checks and await further instructions (ibid.). Thus, the new transmittal letters remained unsigned. (See Exhibits 5 to 5-B).
d) In June 1989, Ms. Joven was transferred to another department. Hence, her duties, responsibilities and functions, including the responsibility over the two (2) HSBC checks, were turned over to another remittance clerk, Ms. Analisa Castillo (Exhibit 14; TSN, 4 June 1993, pp. 27-29).
e) When asked by Ms. Castillo about the two (2) HSBC checks, Ms. Joven relayed to the latter complainant’s instruction (Exhibit 14; TSN, 4 June 1993, p. 42).
f) About fifteen (15) months after the HSBC checks were received by the Bank, the said checks were discovered in the course of an audit conducted by the Bank’s auditors. Atty. Pablo Magno, the Bank’s legal counsel, advised complainant to send the checks for collection despite the lapse of fifteen (15) months.
g) Complainant, however, deliberately withheld Atty. Magno’s advice from her superior, the Senior Vice-President, Mr. Renato Santos and falsely informed the latter that Atty. Magno advised that a demand letter be sent instead, thereby further delaying the collection of the HSBC checks.
h) On 10 July 1990, the HSBC checks were finally sent for collection, but were returned on 16 July 1990 for the reason ‘account closed’ (Exhibits 2-A and 3-A).’
After a review of the Committee’s findings, the Board of Directors of the Bank resolved not to re-elect complainant any longer to the position of assistant president pursuant to the Bank’s By-laws.
On July 19, 1991, complainant was informed of her termination of employment from the Bank by Senior Vice President Benedicto L. Santos, in a letter the text of which is quoted in full:
‘Dear Mrs. Reyes:
After a thorough investigation and appreciation of the charges against you as contained in the Memorandum of the President dated March 8, 1991, the Fact Finding Committee which was created to investigate the commission and/or omission of the acts alluded therein, has found the following:
1. You have deliberately held the clearing of Checks Nos. 11728 and 11730 of Hongkong and Shanghai Banking Corporation in the total amount of US$224,650.00 by giving instructions to the collection clerk not to send the checks for collection. In view thereof, when the said checks were finally sent to clearing after the lapse of 15 months from receipt of said checks, they were returned for the reason ‘Account closed.’ To date, the value of said checks have not been paid by Filipinas Tyrom, which as payee of the checks, had been credited with their peso equivalent;
2. You tried to influence the decision of Atty. Pablo P. Magno, Bank legal counsel, by asking him to do something allegedly upon instructions of a Senior Vice President of the Bank or else lose his job when in truth and in fact no such instructions was given; and
3. You deliberately withheld from Mr. Santos, Senior Vice President, the advice given by the legal counsel of the Bank which Mr. Santos had asked you to seek. As a matter of fact, you even relayed a false advice which delayed further the sending of the two checks for collection. Likewise, you refused to heed the advice of the Bank’s legal counsel to send the checks for collection.
These findings have given rise to the Bank’s loss of trust and confidence in you, the same being acts of serious misconduct in the performance of your duties resulting in monetary loss to the Bank. In view thereof, the Board has resolved not to re-elect you to the position of Assistant Vice President of the Bank. Accordingly, your services are terminated effective immediately. In relation thereto, your monetary and retirement benefits are forfeited except those that have vested in you.’
In her position paper, complainant alleged that the real reason for her dismissal was her filing of the criminal cases against the bank president, the vice president and the auditors of the Bank, such filing not being a valid ground for her dismissal. Furthermore, she alleged that it would be self-serving for the respondent to state that she was found guilty of gross misconduct in deliberately withholding the clearing of the two dollar checks. She further alleged that she was not afforded due process as she was not given the chance to refute the charges mentioned in the letter of dismissal. Hence, she was illegally dismissed.
On the other hand, respondent argues that there were substantial bases for the Bank to lose its trust and confidence on the complainant and, accordingly, had just cause for terminating her services. Moreover, for filing the clearly unfounded suit against the respondent‘s officers, complainant is liable to pay moral and exemplary damages and attorney’s fees.”[7]
The Court of Appeals found that the NLRC committed grave abuse of discretion in ruling that the dismissal of Reyes is valid. In effect, the Court of Appeals reinstated the judgment of the labor arbiter with modification as follows:
“WHEREFORE, in the light of the foregoing, the decision appealed from is hereby REVERSED and SET ASIDE. In lieu thereof, judgment is hereby rendered ordering respondent Bank as follows:
1. To pay petitioner full backwages and other benefits from July 19, 1991 up to the finality of this judgment;
2. To pay petitioner separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement; and
3. To pay attorney’s fee equivalent to ten (10%) percent of the total award.
SO ORDERED.”[8]
Hence, the Bank’s recourse to this Court contending in its memorandum that:
“IN SETTING ASIDE THE DECISION DATED 24 MARCH 1997 AND THE RESOLUTION DATED 28 JULY 1998 OF THE NLRC AND REINSTATING WITH MODIFICATION THE DECISION DATED 20 JULY 1995 OF LABOR ARBITER CORNELIO L. LINSANGAN, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED, IN VIEW OF THE FOLLOWING:
I.
IT IS THE SEC (NOW THE REGIONAL TRIAL COURT) AND NOT THE NLRC WHICH HAS ORIGINAL AND EXCLUSIVE JURISDICTION OVER CASES INVOLVING THE REMOVAL FROM OFFICE OF CORPORATE OFFICERS.
II.
EVEN ASSUMING ARGUENDO THAT THE NLRC HAS JURISDICTION, THERE WAS SUBSTANTIAL EVIDENCE OF RESPONDENT’S MISCONDUCT JUSTIFYING THE BANK’S LOSS OF TRUST AND CONFIDENCE ON (sic) HER.
III.
EVEN ASSUMING ARGUENDO THAT RESPONDENT WAS ENTITLED TO BACKWAGES, THE HONORABLE COURT OF APPEALS ERRED IN AWARDING UNLIMITED AND UNQUALIFIED BACKWAGES THEREBY GOING FAR BEYOND THE LABOR ARBITER’S DECISION LIMITING THE SAME TO THREE YEARS, WHICH DECISION RESPONDENT HERSELF SOUGHT TO EXECUTE.”[9]
In sum, the resolution of this petition hinges on (1) whether the NLRC has jurisdiction over the complaint for illegal dismissal; (2) whether complainant Reyes was illegally dismissed; and (3) whether the amount of back wages awarded was proper.
On the first issue, petitioner seeks refuge behind the argument that the dispute is an intra-corporate controversy concerning as it does the non-election of private respondent to the position of Assistant Vice-President of the Bank which falls under the exclusive and original jurisdiction of the Securities and Exchange Commission (now the Regional Trial Court) under Section 5 of Presidential Decree No. 902-A. More specifically, petitioner contends that complainant is a corporate officer, an elective position under the corporate by-laws and her non-election is an intra-corporate controversy cognizable by the SEC invoking lengthily a number of this Court’s decisions.[10]
Petitioner Bank can no longer raise the issue of jurisdiction under the principle of estoppel. The Bank participated in the proceedings from start to finish. It filed its position paper with the Labor Arbiter. When the decision of the Labor Arbiter was adverse to it, the Bank appealed to the NLRC. When the NLRC decided in its favor, the bank said nothing about jurisdiction. Even before the Court of Appeals, it never questioned the proceedings on the ground of lack of jurisdiction. It was only when the Court of Appeals ruled in favor of private respondent did it raise the issue of jurisdiction. The Bank actively participated in the proceedings before the Labor Arbiter, the NLRC and the Court of Appeals. While it is true that jurisdiction over the subject matter of a case may be raised at any time of the proceedings, this rule presupposes that laches or estoppel has not supervened. In this regard, Bañaga vs. Commission on the Settlement of Land Problems,[11] is most enlightening. The Court therein stated:
“This Court has time and again frowned upon the undesirable practice of a party submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction when adverse. Here, the principle of estoppel lies. Hence, a party may be estopped or barred from raising the question of jurisdiction for the first time in a petition before the Supreme Court when it failed to do so in the early stages of the proceedings.”
Undeterred, the Bank also contends that estoppel cannot lie considering that “from the beginning, petitioner Bank has consistently asserted in all its pleadings at all stages of the proceedings that respondent held the position of Assistant Vice President, an elective position which she held by virtue of her having been elected as such by the Board of Directors.” As far as the records before this Court reveal however, such an assertion was made only in the appeal to the NLRC and raised again before the Court of Appeals, not for purposes of questioning jurisdiction but to establish that private respondent’s tenure was subject to the discretion of the Board of Directors and that her non-reelection was a mere expiration of her term. The Bank insists that private respondent was elected Assistant Vice President sometime in 1990 to serve as such for only one year. This argument will not do either and must be rejected.
It appears that private respondent was appointed Accounting Clerk by the Bank on July 14, 1963. From that position she rose to become supervisor. Then in 1982, she was appointed Assistant Vice-President which she occupied until her illegal dismissal on July 19, 1991. The bank’s contention that she merely holds an elective position and that in effect she is not a regular employee is belied by the nature of her work and her length of service with the Bank. As earlier stated, she rose from the ranks and has been employed with the Bank since 1963 until the termination of her employment in 1991. As Assistant Vice President of the foreign department of the Bank, she is tasked, among others, to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased, including the signing of transmittal letters covering the same. It has been stated that “the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer.[12] Additionally, “an employee is regular because of the nature of work and the length of service, not because of the mode or even the reason for hiring them.”[13] As Assistant Vice-President of the Foreign Department of the Bank she performs tasks integral to the operations of the bank and her length of service with the bank totaling 28 years speaks volumes of her status as a regular employee of the bank. In fine, as a regular employee, she is entitled to security of tenure; that is, her services may be terminated only for a just or authorized cause.[14] This being in truth a case of illegal dismissal, it is no wonder then that the Bank endeavored to the very end to establish loss of trust and confidence and serious misconduct on the part of private respondent but, as will be discussed later, to no avail.
This brings us to the second issue wherein the Bank insists that it has presented substantial evidence to prove the breach of trust on the part of private respondent warranting her dismissal. On this point, the Court of Appeals disagreed and set aside the findings of the NLRC that Reyes deliberately withheld the release of the two dollar checks; that she is guilty of conflict of interest that she waived her right to due process for not attending the hearing; and that she was dismissed based on loss of trust and confidence. We quote pertinent portions of the decision, to wit:
“FIRST: Respondent Bank heavily relied on the testimony and affidavit of Remittance Clerk Joven in trying to establish loss of confidence. However, Joven’s allegation that petitioner instructed her to hold the subject two dollar checks amounting to $224,650.00 falls short of the requisite proof to warrant petitioner’s dismissal. Except for Joven’s bare assertion to withhold the dollar checks per petitioner’s instruction, respondent Bank failed to adduce convincing evidence to prove bad faith and malice. It bears emphasizing that respondent Bank’s witnesses merely corroborate Joven’s testimony.
Upon this point, the rule that proof beyond reasonable doubt is not required to terminate an employee on the charge of loss of confidence and that it is sufficient that there is some basis for such loss of confidence, is not absolute. The right of an employer to dismiss employees on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. For loss of trust and confidence to be valid ground for an employee’s dismissal, it must be substantial and not arbitrary, and must be founded on clearly established facts sufficient to warrant the employee’s separation from work (Labor vs. NLRC, 248 SCRA 183).
SECOND. Respondent Bank’s charge of deliberate withholding of the two dollar checks finds no support in the testimony of Atty. Jocson, Chairman of the Investigating Committee. On cross examination, Atty. Jocson testified that the documents themselves do not show any direct withholding (pp. 186-187, Rollo). There being conflict in the statement of witnesses, the court must adopt the testimony which it believes to be true (U.S. vs. Losada, 18 Phil. 90).
THIRD. Settled is the rule that when the conclusions of the Labor Arbiter are sufficiently substantiated by the evidence on record, the same should be respected by appellate tribunals since he is in a better position to assess and evaluate the credibility of the contending parties (Ala Mode Garments, Inc. vs. NLRC, 268 SCRA 497). In this regard, the Court quotes with approval the following disquisition of Labor Arbiter Linsangan, thus:
This Office has repeatedly gone over the records of the case and painstakingly examined the testimonies of respondent bank’s witnesses. One thing was clearly established: that the legality of complainant’s dismissal based on the first ground stated in respondent’s letter of termination (exh. 25-J, supra) will rise or fall on the credibility of Miss Joven who undisputedly is the star witness for the bank. It will be observed that the testimonies of the bank’s other witnesses, Analiza Castillo, Dante Castor and Antonio Ragasa pertaining to the non-release of the dollar checks and their corresponding transmittal letters were all anchored on what was told them by Ms. Joven, that is: she was instructed by complainant to hold the release of subject checks. In a nutshell, therefore, the issue boils down to who between complainant and Ms. Joven is more credible.
After painstakingly examining the testimonies of Ms. Joven and respondent’s other witnesses this Office finds the evidence still wanting in proof of complainant’s guilt. This Office had closely observed the demeanor of Ms. Joven while testifying on the witness stand and was not impressed by her assertions. The allegation of Ms. Joven in that her non-release of the dollar checks was upon the instruction of complainant Reyes is extremely doubtful. In the first place, the said instruction constitutes a gross violation of the bank’s standard operating procedure. Moreover, Ms. Joven was fully aware that the instruction, if carried out, will greatly prejudice her employer bank. It was incumbent upon Ms. Joven not only to disobey the instruction but even to report the matter to management, if same was really given to her by complainant.
Our doubt on the veracity of Ms. Joven’s allegation even deepens as we consider the fact that when the non-release of the checks was discovered by Ms. Castillo the former contented herself by continuously not taking any action on the two dollar checks. Worse, Ms. Joven even impliedly told by Ms. Castillo (sic) to ignore the two checks and just withhold their release. In her affidavit Ms. Castillo said:
‘4. When I asked Cecille Joven what I was supposed to do with those checks, she said the same should be held as per instruction of Mrs. Reyes.’ (Exh. “14”, supra).
The evidence shows that it was only on 16 May 1990 that Ms. Joven broke her silence on the matter despite the fact that on 15 November 1989, at about 8:00 p.m. the complainant, accompanied by driver Celestino Banito, went to her residence and confronted her regarding the non-release of the dollar checks. It took Ms. Joven eighteen (18) months before she explained her side on the controversy. As to what prompted her to make her letter of explanation was not even mentioned.
On the other hand, the actions taken by the complainant were spontaneous. When complainant was informed by Mr. Castor and Ms. Castillo regarding the non-release of the checks sometime in November, 1989 she immediately reported the matter to Vice President Santos, Head of the Foreign Department. And as earlier mentioned, complainant went to the residence of Ms. Joven to confront her. In this regard, Celestino Bonito, complainant’s driver, stated in his affidavit, thus:
‘1. Sometime on November 15, 1989 at about 7:00 o’clock in the evening, Mrs. Clarita Tan Reyes and I were in the residence of one Ms. Cecille Joven, then a Processing Clerk in the Foreign Department of Prudential Bank;
2. Ms. Cecille Joven, her mother, myself, and Mrs. Clarita Tan Reyes were seated in the sala when the latter asked the former, Ms. Cecille Joven, how it came about that the two dollar checks which she was then holding with the transmittal letters, were found in a plastic envelope kept day-to-day by the former;
3. Hesitatingly, Cecille Joven said: “Eh, Mother (Mrs. Tan Reyes had been intimately called Mother in the Bank) akala ko bouncing checks yon mga yon.
4. Mrs. Clarita Tan Reyes, upon hearing those words, was surprised and she said: “Ano, papaano mong alam na bouncing na hindi mo pa pinadadala;
5. Mrs. Cecille Joven turned pale and was not able to answer.’
There are other factors that constrain this Office to doubt even more the legality of complainant’s dismissal based on the first ground stated in the letter of dismissal. The non-release of the dollar checks was reported to top management sometime on 15 November 1989 when complainant, accompanied by Supervisor Dante Castor and Analiza Castillo, reported the matter to Vice President Santos. And yet, it was only on 08 March 1991, after a lapse of sixteen (16) months from the time the non-release of the checks was reported to the Vice President, that complainant was issued a memorandum directing her to submit an explanation. And it took the bank another four (4) months before it dismissed complainant.
The delayed action taken by respondent against complainant lends credence to the assertion of the latter that her dismissal was a mere retaliation to the criminal complaints she filed against the bank’s top officials.
It clearly appears from the foregoing that the complainant herein has no knowledge of, much less participation in, the non-release of the dollar checks under discussion. Ms. Joven is solely responsible for the same. Incidentally, she was not even reprimanded by the bank.
FOURTH. Respondent Bank having failed to furnish petitioner necessary documents imputing loss of confidence, petitioner was not amply afforded opportunity to prepare an intelligent answer. The Court finds nothing confidential in the auditor’s report and the affidavit of Transmittal Clerk Joven. Due process dictates that management accord the employees every kind of assistance to enable him to prepare adequately for his defense, including legal representation.
The issue of conflict of interest not having been covered by the investigation, the Court finds it irrelevant to the charge.”[15]
We uphold the findings of the Court of Appeals that the dismissal of private respondent on the ground of loss of trust and confidence was without basis. The charge was predicated on the testimony of Ms. Joven and we defer to the findings of the Labor Arbiter as confirmed and adopted by the Court of Appeals on the credibility of said witness. This Court is not a trier of facts and will not weigh anew the evidence already passed upon by the Court of Appeals.[16]
On the third issue, the Bank questions the award of full backwages and other benefits from July 19, 1991 up to the finality of this judgment; separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement; and attorney’s fees equivalent to ten (10%) percent of the total award. The Bank argues, in the main, that private respondent is not entitled to full backwages in view of the fact that she did not bother to appeal that portion of the labor arbiter’s judgment awarding back wages limited to three years. It must be stressed that private respondent filed a special civil action for certiorari to review the decision of the NLRC[17]and not an ordinary appeal. An ordinary appeal is distinguished from the remedy of certiorari under Rule 65 of the Revised Rules of Court in that in ordinary appeals it is settled that a party who did not appeal cannot seek affirmative relief other than the ones granted in the decision of the court below.[18] On the other hand, resort to a judicial review of the decisions of the National Labor Relations Commission in a petition for certiorari under Rule 65 of Rules of Court is confined to issues of want or excess of jurisdiction and grave abuse of discretion.[19] In the instant case, the Court of Appeals found that the NLRC gravely abused its discretion in finding that the private respondent’s dismissal was valid and so reversed the same. Corollary to the foregoing, the appellate court awarded backwages in accordance with current jurisprudence.
Indeed, jurisprudence is clear on the amount of backwages recoverable in cases of illegal dismissal. Employees illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989 are entitled to backwages up to three (3) years without deduction or qualification, while those illegally dismissed after are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement.[20] Considering that private respondent was terminated on July 19, 1991, she is entitled to full backwages from the time her actual compensation was withheld from her (which, as a rule, is from the time of her illegal dismissal) up to the finality of this judgment (instead of reinstatement) considering that reinstatement is no longer feasible as correctly pointed out by the Court of Appeals on account of the strained relations brought about by the litigation in this case. Since reinstatement is no longer viable, she is also entitled to separation pay equivalent to one (1) month salary for every year of service.[21] Lastly, since private respondent was compelled to file an action for illegal dismissal with the labor arbiter, she is likewise entitled to attorney’s fees[22] at the rate above-mentioned. There is no room to argue, as the Bank does here, that its liability should be mitigated on account of its good faith and that private respondent is not entirely blameless. There is no showing that private respondent is partly at fault or that the Bank acted in good faith in terminating an employee of twenty-eight years. In any event, Article 279 of Republic Act No. 6715[23] clearly and plainly provides for “full backwages” to illegally dismissed employees.
WHEREFORE, the instant petition for review on certiorari is DENIED, and the assailed Decision of the Court of Appeals, dated October 15, 1999, is AFFIRMED.
SO ORDERED.

Labor Law Case Analysis

Deadline: Midterm Exam date

Just and Authorized Causes

Format:
Case / Parties / Citation / whether or not there is a valid dismissal / SC decision

Just Causes:

31. Anabel Benjamin vs Amella Corp, GR # 183383, April 5, 2010

32. Technol Eight Phil. corp. vs NLRC GR # 187605, April 13, 2010

33. Caltex, et. al. Vs Hermie Agad GR # 162017, April 23, 2010

34. Gen. Milling corp. vs Ernesto Casio GR # 149552, March 10, 2010 - dismissal under union security clause

35. Solid Bank corp vs NLRC and Rodolfo Bombita, GR # 165951, March 30, 2010

36. Prudential Bank & Trust Co. vs NLRC GR # 141093 352 SCRA 316 February 20, 2001- loss of trust and confidence