PHILIPPINE LONG DISTANCE            G.R. Nos. 164684-85TELEPHONE COMPANY, INC.,

Petitioner,                                                                    Present:

                                                                PUNO, J., Chairman,- versus -                                                 AUSTRIA-MARTINEZ,

                                                                        CALLEJO, SR.,                                                                        TINGA, and                                                                        CHICO-NAZARIO,* JJ.  ANTONIO Q. TIAMSON,                       

Respondent.                             Promulgated: 

                                                                        November 11, 2005 x-----------------------------------------------------------------------------------------x 

DECISION CALLEJO, SR., J.:         

Being questioned in this petition for review on certiorari is the Decision[1] of the Court of Appeals (CA) dated April 16, 2004 in CA-G.R. SP Nos. 51855 and 52247, and the Resolution dated July 27, 2004 denying the motion for reconsideration thereof.            On April 16, 1986, the Philippine Long Distance Telephone Company, Inc. (PLDT) employed Antonio Q. Tiamson as a Radio Technician II (JG4).  He was assigned at the company’s North Luzon Toll Network Division, Clark Transmission Maintenance Center (Clark-TMC) in Pampanga. After the expiration of the probationary period, he was extended regular appointment for the same position.         

In a Letter[2] dated July 29, 1994, Anthony Dy Dee, the President of the Angeles City Telephone System and Datelcom Corporation, informed PLDT of his complaint against its employees assigned in Clark-TMC, stating therein that he suspected them to be in cohorts with the local subscribers in effecting illegal overseas calls. Acting on the letter-complaint, PLDT immediately dispatched a team of inspectors and investigators from its Quality Control and Inspection Department (QCID) and Security Division to conduct surveillance operations in the area.  On August 2, 1994, Vidal Busa, a radio technician, was caught in flagrante delicto while monitoring an illegally connected overseas call using the radio facilities of the company’s Clark-TMC Radio Room.[3]

 The QCID, likewise, requested the Switching Network Division at PLDT’s Sampaloc National Toll Center to print the

CAMA[4] tape recording of all long distance calls originating from the PLDT Clark Exchange Traffic for the period of July 29 to August 2, 1994. The printout revealed that a total of 469 fraudulent overseas and local calls were connected and completed at the PLDT Clark-TMC Radio Room for the said period. Three overseas calls to Saudi Arabia made on August 1, 1994 were imputed to Tiamson who appeared to be on duty from 10:00 p.m. to 6:00 a.m.[5]

 The QCID conducted its initial investigation on August 2, 1994, where Busa readily admitted his involvement in the

illegal connection of overseas calls. In his sworn statement, he specifically named Arnel Cayanan, his Shift Supervisor, Antonio Tiamson and Paul Cruzada, both radio technicians, as the other employees actively engaged in the illegal practice. He stated that he knew about this because whenever he would relieve them from their tour of duty, he would see that the circuit was engaged.[6]

 On August 3, 1994, during a confrontation between Busa and Tiamson, the former reiterated his earlier statement that

the latter was involved in the illegal act of connecting overseas calls.[7] For his part, Tiamson admitted that he knew how to make an overseas call using the company’s radio equipment and that he learned how to do so through hands-on experimentation and intensive reading of operating manuals. He, however, denied having actually made an illegal connection of overseas calls.  He declared that he knew of the wrongdoings of Busa and even disconnected the latter’s overseas telephone calls whenever he (Tiamson) was on duty. Tiamson claimed that he failed to report the actuations of Busa because the latter was his supervisor and was afraid to antagonize him.[8] 

 On August 5, 1994, there was another confrontation proceeding between Busa, Tiamson, Cruzada and Cayanan. In their

sworn statements, Busa and Cruzada testified that, sometimes when they relieve Cayanan from his duty, they would discover an illegal connection and an on-going conversation in the line. [9]  Tiamson maintained that he disconnected the illegal calls of Busa, while Cayanan implicated his subordinates.

 The QCID recommended that administrative action for serious misconduct be instituted against the said employees.

Consequently, the company issued to Tiamson an Inter-Office Memorandum dated August 12, 1994, charging him with violation of the company’s disciplinary rules and regulations.  He was, likewise, required to explain within 72 hours why he should not be dismissed, thus:

 

            Investigation of the complaint indicated hereunder disclosed that: 

1.      Complainant – Mr. Anthony Dy, President DATELCOM Corp. 2.      The decrease of toll revenue for DATELCOM Angeles/Mabalacat Exchange due to fraudulent overseas

call scam was complained and notified by Mr. A. Dy to Mrs. B. G. Gendrano – Clark Exchange Division Head on July 26, 1994.

 3.      The complainant requested assistance to NBI and PLDT QCI to apprehend the personnel responsible for

the illegal connection. 

4.      A clue was provided by Mr. Anthony Dy that the illegal overseas call was coming from Clark-TMC through taped and equipment monitoring.

5.  In the QCI investigation, you were implicated by your fellow Radio Technician Mr. Vidal C. Busa as involved in the case. You admitted you know how to operate the Lenkurt 26600 Signalling Test Set to initiate a call but denied doing it for personal gain or interest but you failed to report the anomaly to your superior as one of your supervisors was involved in the fraudulent case. 

The acts described above are in violation of the Company’s rules and regulations and is punishable with dismissal from the service.

 In view of the above, please explain in writing within 72 hours from receipt hereof why you should not

be dismissed from the service for the acts described above. You may elect to be heard if you so desire. …[10]

                                                

Meanwhile, Tiamson was placed under preventive suspension on August 16, 1994.[11]

On August 18, 1994, Tiamson submitted his written explanation denying any participation in the illegal activities at PLDT’s Clark-TMC. He averred that Busa’s statement against him was malicious and untrue and that he was the one relieving Busa from his tour of duty and not the other way around.  He insisted that on August 1, 1994, his tour of duty was from 6:00 a.m. to 10:00 p.m.[12]

 PLDT found his explanation unsatisfactory and inadequate in substance. Thus, it issued an Inter-Office Memo [13] dated

October 5, 1994, terminating Tiamson’s employment effective October 7, 1994 on the ground of serious misconduct and/or fraud.

 Tiamson filed a complaint against PLDT for illegal suspension, illegal dismissal, damages and other monetary claims,

docketed as NLRC Case No. RAB-III-07-6414-95.  The Labor Arbiter resolved the case in favor of Tiamson:

 WHEREFORE, premises considered, judgment is hereby rendered declaring respondent PLDT guilty of

illegal dismissal and it is hereby ordered to reinstate complainant to his former position without loss of seniority rights and with full backwages reckoned from the date of his dismissal up to his actual or payroll reinstatement at the option of the respondent, which as of this date is in the amount of Three Hundred Seventy-Two Thousand Eight Hundred Twenty-Five and 32/100 (P372,825.32) Pesos.

 Further, respondent is ordered to pay complainant attorney’s fee in the amount of Thirty-Seven

Thousand Two Hundred Eighty-Two and 53/100 (P37,282.53) Pesos. The claims for moral and exemplary damages are dismissed for lack of evidence. SO ORDERED.[14]

 The Labor Arbiter declared that the complainant could not have made any illegal connection on August 1, 1994 from

10:00 p.m. to 6:00 a.m. because he was off-duty. PLDT elevated the case to the National Labor Relations Commission (NLRC). On August 31, 1998, the NLRC ruled

that while there was just cause for Tiamson’s dismissal, the penalty of dismissal was too harsh. Hence, the NLRC ordered that Tiamson be reinstated to his former position without loss of seniority rights, but without backwages.[15]

 Both parties moved to reconsider the decision, but the NLRC denied the motions for lack of merit.[16]

 PLDT filed a petition for certiorari before the CA, assailing the NLRC’s order of reinstatement despite a categorical finding that Tiamson was guilty of illegal connection of overseas calls. The petition was docketed as CA-G.R. SP No. 51855. Tiamson filed a similar petition, assailing the deletion of the award of backwages and attorney’s fees. This was docketed as CA-G.R. SP No. 52247. The CA, thereafter, ordered the consolidation of the two petitions.           On April 16, 2004, the CA reinstated the decision of the Labor Arbiter, thus:

 WHEREFORE, the petition by the PLDT under CA-G.R. SP No. 51855 is DENIED DUE

COURSE and DISMISSED while the petition by Antonio Tiamson under CA-G.R. SP No. 52247 is GIVEN

DUE COURSE and GRANTED, and the Decision dated October 15, 1997 of the Labor Arbiter which was set aside by the NLRC, is hereby REINSTATED in its fullness and without modifications.

 SO ORDERED.[17]

          

The CA held that Busa’s sworn statement was not worthy of credence,  a mere afterthought, the contents of which were seriously flawed. The appellate court found it difficult to believe Busa’s assertion that, on several occasions when he came to relieve the respondent, a circuit was in use which the latter would turn off before leaving. In this regard, the appellate court noted that Busa’s work shift preceded that of the respondent, such that it would be impossible for him to see the respondent make an illegal connection.[18]

 The CA likewise opined that the respondent was denied due process when he was not apprised of nor given the

opportunity to confute the charge that during his duty on August 1, 1994, three overseas calls to Saudi Arabia were recorded in the CAMA tape.[19]

 The petitioner timely filed a motion for reconsideration, which the CA denied in its Resolution[20] dated July 27, 2004. The petitioner now comes before this Court, alleging that: … THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN REINSTATING THE DECISION OF THE ARBITER A QUO AS SAID DECISION WAS NOT IN ACCORD WITH LAW AND CONTRARY TO THE EVIDENCE ON RECORD.[21]

 The petitioner submits that it has presented more than substantial evidence to prove that the respondent was involved in

the illegal connection of overseas calls. The petitioner avers that the CA erred in holding that Busa’s sworn statement was not credible. According to the CA, it would have been impossible for Busa to see the respondent making an illegal connection since his tour of duty preceded that of the respondent. The petitioner, however, asserts that there was a rotation of the employees’ tour of duty such that, at times, it was Busa who would take over from the respondent; hence, Busa had the occasion to personally see the respondent connecting illegal calls. In support of this, the petitioner proffers the copy of logbook entries from July 13 to August 3, 1994, which was attached to its Memorandum of Appeal filed with the NLRC. The logbook shows that on several occasions, it was Busa who took over from the respondent.[22]

 The petitioner further asserts that the respondent failed to show that Busa was actuated and impelled by improper

motive and bad faith in executing his sworn statement. [23]The records show that Busa, from the very start, had categorically and unequivocally named the respondent as one of those engaged in the illegal connection of overseas calls. [24]  Moreover, Busa’s sworn statement had been corroborated by the printout of the CAMA tapes (which disclosed that during the respondent’s August 1, 1994 duty, three fraudulent calls to Saudi Arabia were illegally made), [25] as well as Cayanan’s sworn statement implicating the respondent.[26]

 The petitioner submits that the respondent’s offense was serious  in character and merits the penalty of dismissal from

employment. It contends that the respondent was accorded the full measure of due process before he was dismissed: he was given a notice which apprised him of the charge against him and required him to explain why he should not be dismissed, and later, a notice of termination. The petitioner claims that the Labor Code simply requires that the employee be given a written notice containing a statement of the causes of termination.  It insists that the printout of the recording of the CAMA tapes showing that three illegal connections were made on August 1, 1994 is a mere evidentiary matter that need not be mentioned in the notice.[27]

 For his part, the respondent avers that Busa’s statement was uncorroborated and hearsay for lack of cross-examination.

He insists that Busa could not have seen him make illegal connections since the latter’s shift came before his.[28]

 The petitioner replies that an affidavit may be admissible even if the witness is not presented during trial because

technical rules are not strictly followed in proceedings before the Labor Arbiter and the NLRC.[29]

 The petition has no merit. It is a settled rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within

their respective jurisdictions, are generally accorded not only respect but even finality. [30] Moreover, in a petition for review on certiorari under Rule 45, the Supreme Court reviews only errors of law and not errors of facts. [31]However, where there is divergence in the findings and conclusions of the NLRC, on the one hand, from those of the Labor Arbiter and the Court of Appeals, on the other, the Court is constrained to examine the evidence.[32]

 In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid cause;

failure to do so would necessarily mean that the dismissal was illegal. [33] The employer’s case succeeds or fails on the strength of its evidence and not on the weakness of the employee’s defense. If doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. [34] Moreover, the quantum of proof required in determining the legality of an employee’s dismissal is only substantial evidence. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.[35]

 In this case, the appellate court ruled for respondent Tiamson, ratiocinating as follows:

 The issues posed by both parties involve the evaluation of the findings of facts by the agencies  a

quo. While the general rule is that factual issues could not be properly raised and considered in a petition for certiorari, it however admits of this exception that a disharmony between the factual findings of the Labor Arbiter and those of the NLRC opens the door to review thereof by the Supreme Court  (Asuncion vs. National Labor Relations Commission, 362 SCRA 56), including, of course, the Court of Appeals.

 The crux of both petitions is whether the NLRC with its findings quoted below, was correct in setting

aside the disposition of the Labor Arbiter: 

We disagree that respondent failed to present evidence linking complainant to the illegal connection scam. As pointed out by the respondent, co-employee Busa and Cayanan in the course of their investigation implicated complainant’s participation in illegal overseas connection.  Complainant also failed to refute respondent’s evidence that on August 1, 1994, while he was on duty, three (3) overseas calls to Saudi Arabia were recorded in cama tape (Annex 4, p. 30, records).

 However, we consider the penalty of dismissal too harsh considering that respondent imposed

a sixty (60)-day suspension on Paul Cruzada, a co-employee of complainant who submitted (sic) culpability.  For where a lesser punitive penalty would suffice, the supreme penalty of dismissal should be visited (Almira vs. B.F. Goodrich, 58 SCRA 120).  Under the circumstances, reinstatement but without backwages is appropriate (pp. 39-40, Rollo)

 Our review of the records reveals that among the three employees who issued sworn statements, namely, Busa, Cayanan and Cruzada,  it was only Busa who directly implicated Tiamson and it was done inexplicably only in his second sworn statement. It does not inspire credence as it comes as an afterthought and the contents are seriously flawed on material points.  Looming large is the claim of Busa that on several occasions when he came to relieve Tiamson, he observed that his circuit was logged on and in use, and Tiamson would then put it off before leaving.  This is a canard because the shift of Busa was from 1:00 p.m. to 6:00 a.m. and of course ahead of the 6:00 a.m. to 2:00 p.m. shift of Tiamson who came in as his reliever.   Their tours of duty was in the converse order of what Busa claimed, and so he spoke with a forked tongue when he stated that Tiamson at the preceding shift had his circuit logged on and switched this off when he left.

 A no less important point is the undisputed fact that Tiamson was not given the opportunity to confute

the charge that on August 1, 1994 while he was on duty, three (3) overseas calls to Saudi Arabia were recorded in the cama tape.  This was not indicated in the memorandum sent to him on August 12, 1994, the full text of which reads:

                                                                  August 12, 1994 

TO                 : MR. ANTONIO Q. TIAMSON – Radio Tech II Clark TMCFROM      : Division Head, North Luzon Toll NetworkSUBJECT: ADMINISTRATIVE CASE- - - - - - -  - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -      

Investigation of the complaint indicated hereunder disclosed that: 

1.  Complainant Mr. Anthony Dy, President DATELCOM Corp. 

2. The decrease of toll revenue for DATELCOM Angeles/Mabalacat Exchange due to fraudulent overseas call scam was complained and notified by Mr. A. Dy to Mrs. H. G. Gendrano – Clark Exchange Division Head on July 26, 1994.

 3. The complainant requested assistance to NBI and PLDT QCI to apprehend the personnel

responsible for the illegal connection. 

4.  A clue was provided by Mr. Anthony Dy that the illegal overseas call was coming from Clark-TMC through taped and equipment monitoring. 

           5. In the QCI investigation, you were implicated by your fellow Radio Technician Mr. Vidal C. Busa as involved in the case. You admitted you know how to operate the Lenkurt 26600 Signalling Test Set to initiate a call but denied doing it for personal gain or interest but you failed to report the anomaly to your superior as one of your supervisors was involved in the fraudulent case.          The acts described above are in violation of the Company’s rules and regulations and is punishable with dismissal from the service.           In view of the above, please explain in writing within 72 hours from receipt hereof why you should not be dismissed from the service for the acts described above.  You may elect to be heard if you so desire.          Please be informed also that you will be placed under preventive suspension which will take effect on August 16, 1994 pending resolution of the case.

          If no written explanation is received from you within the said period of 72 hours, this case will be decided on the basis of the evidence on hand. (p. 227, Rollo)                                                                       (SGD.)                                                     ARMANDO A. ABESAMIS

             Procedural due process requires that an employee be apprised of the charge against him, given reasonable time to answer the same, allowed ample opportunity to be heard and defend himself, and assisted by a representative if the employee so desires (Concorde Hotel vs. Court of Appeals, 362 SCRA 583; underlining supplied). Procedural due process requires that the employer serve the employees to be dismissed two (2) written notices before the termination of their employment is effected: (a) the first,  to apprise them of the particular acts or omission for which theirdismissal is sought; and (b) second, to inform them of the decision of the employer that they are being dismissed (Perpetual Help Credit Cooperative, Inc. vs. Faburada, 366 SCRA 693; underlining supplied). The Labor Arbiter, therefore, was correct in ruling that Tiamson was indeed illegally dismissed from his employment.[36]

 The petitioner maintains that contrary to the findings and conclusions of the appellate court, it has established through

substantial evidence that there was just cause for the respondent’s dismissal. To bolster such contention, the petitioner adduces the following documentary evidences: (1) the sworn statements of Vidal Busa specifically implicating the respondent;  (2) the sworn statement of Arnel Cayanan; and (3) the printout of the CAMA tape, recording the unauthorized overseas calls originating from Clark-TMC during the respondent’s tour of duty.

 The respondent disputes the admissibility of Busa’s sworn statements for being hearsay since the latter was not

presented for cross-examination. This argument, however, is not persuasive because the rules of evidence are not strictly observed in proceedings before administrative bodies like the NLRC where decisions may be reached on the basis of position papers only.[37]

 The Court agrees with the contentions of the respondent and the findings and rulings of the CA. The petitioner indeed failed to adduce substantial evidence to prove that the dismissal of the respondent was for a just

cause.  In his first sworn statement, Busa implicated the respondent in the illegal connections of overseas calls in this manner: T 25 - Bukod sa iyo, sinu-sino pa sa mga kasamahan mo ang tinuruan ni   Mr. Cayanan ng sistemang ito?S   - Sina Antonio Tiamson at Paul Cruzada na pawang mga Radio Technicians din. T 26 - Ang ibig mo sabihin, ginagawa din nina Mr. Tiamson at Cruzada               ang magpa-patch ng mga tawag sa abroad o overseas?S      - Opo. T 27 - Paano mo naman nasisiguro ito?S      - Nakikita ko po. T 28 - Paano mo naman nakita samantalang magka-iba ang tour of duty              ninyo?S      - Pag nag-relyebo kami ay naaabutan kong naka-engage ang circuit at pag tinanong ko ay sinasabi nga

nilang may tawag sila at kasalukuyang nag-uusap ang magkabilang parties.[38]

  During the confrontation between Busa and the respondent, the former likewise made the following statements: T 3  -  Ayon sa iyo, ginagawa rin ni Mr. Tiamson ang magku-kunekta ng mga illegal na tawag overseas sa

pamamagitan ng pag-gamit ng inyong Radio Equipment. Tama ba ito?S      -  Tama po, Sir. T 4   -  Paano mo nalaman na  ginagawa rin ni Mr. Tiamson ito?S   - Dahil nakikita ko siyang nagkukunekta at ilang beses ko ring nadatnan kapag nag-relyebo kami na

gumagana ang circuit na ang ibig sabihin ay may nag-uusap. At bago siya aalis ay inilalagay niya sa normal position ang linyang ginamit niya.

 T 5  -  Kailan pa ito gingawa ni Mr. Tiamson kung natatandaan mo pa?S     -  Sa natatandaan ko ginagawa niya ito magmula noong 1992 pa. T 6 -  Ayon pa rin sa iyo, alam din ni Mr. Tiamson na ginagawa rin ni Mr. Cayanan itong mga illegal activities

na ito. Paano mo nasabi na alam ni Mr. Tiamson itong ginagawa ni Mr. Cayanan S   -  Kasi magkakasama kami at kaming apat lang nina Mr. Cayanan, Mr.Tiamson, Mr. Cruzada at ako ang

nakaka-alam niyang operation na iyan.[39]

  

On the other hand, during the confrontation among all four employees implicated in the matter, Cayanan testified that he was aware that his “subordinates” were engaged in illegal activities. However, he failed to specifically mention who these subordinates were.[40]

 Although admissible in evidence, affidavits being self-serving must be received with caution.  This is because the

adverse party is not afforded any opportunity to test their veracity.[41] By themselves, generalized and pro forma affidavits cannot constitute relevant evidence which a reasonable mind may accept as adequate. [42] There must be some other relevant evidence to corroborate such affidavits.

 On this point, the petitioner submits that the printout of the CAMA tapes corroborated Busa’s sworn statement. A

perusal of the printout, however, shows that it is not authenticated by the proper officer of the company. Moreover, the name of the respondent and the other annotations in the said printout are handwritten and unsigned.

 The ruling in Asuncion v. National Labor Relations Commission[43] is instructive on how such document should be

treated.  In that case, the employer submitted a handwritten listing and computer printouts to establish the charges against the employee. The handwritten listing was not signed, and while there was a computer-generated listing, the entries of time and other annotations therein were also handwritten and unsigned. The Court ruled that the handwritten listing and unsigned computer printouts were unauthenticated, hence, unreliable. Mere self-serving evidence (of which the listing and printouts are of that nature) should be rejected as evidence without any rational probative value even in administrative  proceedings.[44]

                     Thus, in Uichico v. National Labor Relations Commission,[45] the Court elucidated the extent of the liberality of procedure in administrative actions:

…  It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of law or equity are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value. …[46]

  The decisions of this Court, while adhering to a liberal view in the conduct of proceedings before administrative

agencies, have nonetheless consistently required some proof of authenticity or reliability as a condition for the admission of documents.[47] Absent any such proof of authenticity, the printout of the CAMA tape should be considered inadmissible, hence, without any probative weight.

 To conclude, the petitioner has not established by substantial evidence that there was just cause for the respondent’s

termination from his employment. The sworn statements of Busa and Cayanan alone are not sufficient to establish that the respondent was guilty of serious misconduct. In light of such finding, there is no need to delve into whether or not the respondent was afforded due process when he was dismissed by the petitioner.

 WHEREFORE, premises considered, the petition is DENIED DUE COURSE. The Decision of the Court of Appeals

dated April 16, 2004, and its Resolution dated July 27, 2004 in CA-G.R. SP Nos. 51855 and 52247 are AFFIRMED. 

MGG MARINE SERVICES, INC. and/or DOROTEO C. GARLAN and CESAR ROTILO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ELIZABETH A. MOLINA, respondents.

The Facts

Private respondent was initially employed by the MGG Marine Services, Inc. (MGG) on July 1, 1988.

On March 25, 1990, the president of MGG, petitioner Doroteo C. Garlan, went to the United States for a brief sojourn.  On March 1, 1990, before his departure, he appointed private respondent as comptroller and the over-all supervisor, concurrently with her then position as financial officer.  As comptroller, private respondent was tasked to hold in trust for the company corporate funds to pay its obligations as authorized by the president and the board of directors.  Petitioner Garlan instructed private respondent to pay the company's obligations as they fell due. Ma. Lourdes G. Unson, vice-president of MGG who also traveled to the United States, left with private respondent 79 prepared and pre-signed checks, 16 in blank and 63 with specific amounts on them, with corresponding vouchers containing the amount of debts due and the names of the creditors.  Private respondent was specifically told to pay only the creditors mentioned in the cash vouchers and to place on each of the 16 blank checks the amount stated in the corresponding check voucher.  The said checks were made payable to private respondent, who upon withdrawal of the money from the bank, was to pay the same to the creditors.

At the time the aforementioned officers left for abroad, the company had about P1.5 million in its bank account.  The total amount payable to the creditors as appearing in the check vouchers corresponding to the 16 blank checks was P224,131.50.  All payments of the company were programmed in accordance with its plans and budget for the purpose of maintaining the optimal level of cash reserve.

When the corporate officers returned from their trip in June 1990, they were dismayed to learn that the company's deposits in the bank was reduced to only P5,720.00.  It turned out that private respondent disobeyed the instructions given her not to pay more than what was specified in check vouchers.  She increased the amounts she wrote on the blank checks so that instead of paying only P224,131.50 as budgeted, she withdrew from the bank an

aggregate sum of P1,515,823.00.  Likewise, she paid some creditors who were not specified in the cash vouchers.  When the company had to pay an obligation of P15,000.00 on June 7, 1990, private respondent could only withdraw P5,720.00.

In her pleadings, private respondent did not give a satisfactory explanation as to why she violated the instruction given her except to claim that she did not profit by a single centavo from the withdrawals which she paid to company creditors.

MGG filed estafa charges against private respondent which were however dismissed.

On November 12, 1990, MGG terminated private respondent's employment for loss of trust and confidence.  She then filed a complaint for illegal dismissal against MGG and its officers.

In a decision dated December 21, 1992, the Labor Arbiter held that: (1) the dismissal was illegal; (2) MGG should pay private respondent (a) separation pay equivalent to one month's salary for every year of service, it appearing that strained relations between the parties rendered reinstatement impractical; (b) thirteenth month pay in the amount of P16,083.32; (c) overtime pay in the amount of P21,977.52; (d) unpaid salary in the amount of P31,166.66; (e) moral damages in the amount of P50,000.00 for the “wrongful and malicious dismissal in bad faith”; and (f) attorney’s fees.[4]

The Labor Arbiter noted:

“In the case at bar, except for their bare self-serving allegation that the complainant had allegedly misappropriated corporate funds, no proof whatsoever was adduced by respondents and not even a scintilla of evidence was presented to show that the complainant had in fact defrauded the company to the tune of more than a million pesos.  The complainant on the other hand successfully defended herself from said accusations by proving that she was in fact authorized to disburse the corporate funds in question for the purpose of settling the company’s various accounts with its different creditors.  Significantly, respondents made no claim at all that a single centavo went to the pocket of complainant.  Moreover, the complaint for estafa filed against the complainant was dismissed by Asst. City Prosecutor Eudoxia T. Gualberto in a resolution dated September 30, 1991 and a subsequent motion for reconsideration of said dismissal was denied by the City Prosecutor of Manila.”[5]

MGG appealed the Labor Arbiter’s decision to NLRC.  In a Resolution dated February 28, 1994, NLRC dismissed the appeal and affirmed in toto the appealed decision.

Hence this petition for certiorari.

The Issues

The issues in this case are:

(1)              Was there lawful cause for the dismissal of private respondent?

(2)              Did petitioners comply with the procedural requirements for valid dismissal? and

(3)              Were petitioners accorded due process at the hearing before the Labor Arbiter?

The Second Issue: Procedural Due Process

To constitute a completely valid and faultless dismissal, it is well-settled that the employer must show not only sufficient ground therefor but it must also prove that it observed procedural due process by giving the employee two notices: one, of the intention to dismiss, indicating therein his acts or omissions complained against, and two, notice of the decision to dismiss; and an opportunity to answer and rebut the charges against him, in between such notices.

“The twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal: the requirement of notice is intended to inform the employee concerned of the employer’s intent to dismiss and the reason for the proposed dismissal; upon the other hand, the requirement of hearing affords the employee an opportunity to answer his employer’s charges against him accordingly to defend himself therefrom before dismissal is effected.  Neither of these two requirements can be dispensed with without running afoul of the due process requirement of the 1987 Constitution.”[14]

In the case before us, the petitioners found out about the excess withdrawals when an audit was conducted.  The record is devoid of any showing that private respondent was given notice of the charges against her.  Neither was she given a hearing or opportunity to present her defense.  The only allegation of petitioners was that she was asked questions about her withdrawals during the audit.  But these are too scant and too bare to amount to due process.  There was no indication of the nature and the type of questions asked, the process of the supposed inquiry, the time and opportunity given for her defense, and the degree of explanation allowed her.

When this issue was brought up by the Solicitor General in his Comment, all that the petitioners could say in their Reply was:

“There is no dispute that private respondent Molina was audited upon arrival of the senior management from the United States and that she herself admits that she was asked questions and was allowed to explain her side (pp. 28-18 (sic), TSN, July 26, 1991).”[15]

Plainly, this is not sufficient compliance with due process.  An audit cannot take the place of the twin requirements of notices and hearing.  At the very least, petitioners failed to show they followed these requirements.

“There is also no showing that the requirements of due process were adequately met by the petitioners.

“The law requires that the employer must furnish the worker sought to be dismissed with two (2) written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him.  (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V, Rules and Regulations Implementing the Labor Code as amended).  Failure to comply with the requirements taints the dismissal with illegality.  This procedure is mandatory; in the absence of which, any judgment reached by management is void and inexistent (Tingson, Jr. v. NLRC, 185 SCRA 498 [1990]; National Service Corp. v. NLRC, 168 SCRA 122 [1988]; Ruffy v. NLRC, 182 SCRA 365 [1990]).”[16]

This failure to show due process taints the dismissal.  This does not mean however that the private respondent would be entitled to backwages or reinstatement or even separation pay. [17]Under prevailing jurisprudence, she is entitled only to indemnity or damages, the amount of which depends on the peculiar circumstances of each case.[18]

In Wenphil Corporation vs. NLRC, et al.[19], which is the leading example of these “indemnity cases,” the private respondent had an altercation with a co-employee, as a result of which both were suspended the following morning, and in the afternoon of the same day private respondent was dismissed.  In justifying his dismissal, the Court held:

“The Court holds that the policy of ordering the reinstatement to the service of an employee without loss of seniority and the payment of his wages during the period of his separation until his actual reinstatement but not exceeding three (3) years without qualification or deduction, when it appears he was not afforded due process, although his dismissal was found to be for just and authorized cause in an appropriate proceedings in the Ministry of Labor and Employment, should be re-examined.  It will be highly prejudicial to the interests of the employer to impose on him the services of an employee who has been shown to be guilty of the charges that warranted his dismissal from employment.  Indeed, it will demoralize the rank and file if the undeserving, if not undesirable, remains in the service.

Thus in the present case, where the private respondent, who appears to be of violent temper, caused trouble during office hours and even defied his superiors as they tried to pacify him, should not be rewarded with re-employment and back wages.  It may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe.  Under the circumstances the dismissal of the private respondent for just cause should be maintained.  He has no right to return to his former employer.

However, the petitioner must nevertheless be held to account for failure to extend to private respondent his right to an investigation before causing his dismissal.  The rule is explicit as above discussed.  The dismissal of an employee must be for just or authorized cause and after due process.  Petitioner committed an infraction of the second requirement.  Thus, it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing petitioner from employment.  Considering the circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00.  The measure of this award depends on the facts of each case and the gravity of the omission committed by the employer.”

In Rubberworld (Phils.) Inc. et al. vs. NLRC, et al.[20] the employer was also ordered to pay the private respondent P1,000.00 “as indemnification for (petitioners’) failure to observe the requirements of due process prior to termination of private respondent’s employment for just cause.” Following this doctrine, the Court in Aurelio vs. NLRC, et al.[21] ruled that “where there was a valid ground to dismiss an employee but there was non-observance of due process x x x only a sanction must be imposed upon the employer x x x” and that “the NLRC erred when it awarded separation pay x x x.”

In Reta vs. NLRC, et al.,[22] the award was raised to P10,000.00 “considering that petitioner was given his walking papers and forced to leave his ship in a foreign port x x x.” The said sum of P10,000.00 was considered “fair, reasonable and realistic” in Alhambra Industries Inc. vs. NLRC et al.,[23] the Court adding that “termination of a worker for cause, even without procedural due process, does not warrant reinstatement, but the employer incurs liability for damages.”[24]

In striking down the claim for backwages and separation pay where just cause is clearly shown, the Court, through Mr. Justice Florenz D. Regalado in Cathedral School of Technology vs. NLRC, et al., (supra), said:

“x x x (B)ackwages are granted on the basis of equity for earnings which a worker or employee has lost due to his illegal dismissal, where private respondent’s dismissal is for just cause, as is the case herein, there is no factual or legal basis to order payment of backwages; otherwise, private respondent would be unjustly enriching herself at the expense of petitioners.  Where the employee’s dismissal was for a just cause, it would be neither fair nor just to allow the employee to recover something he has not earned or could not have earned.

Neither can there be an award for separation pay.  In Cosmopolitan Funeral Homes, Inc. vs. Maalat, et al., we reiterated the categorical abandonment of the doctrine that employees dismissed for cause are entitled to separation pay on the ground of social and compassionate justice.  x x x” (citations omitted.)

In the instant case, following the jurisprudence firmly established in the aforecited cases, she is entitled to indemnity of P1,000.00.

The Third Issue:

Due Process at the Labor Arbiter’s Forum

Petitioners maintained that they were denied due process when the Labor Arbiter considered the case submitted for resolution notwithstanding the fact that petitioners had manifested their intention to present additional evidence.

We do not agree.

Petitioners first asked to be allowed to present additional evidence at the hearing on June 9, 1992 but they manifested that the documents they intended to present were not then available. The Labor Arbiter allowed petitioners to present the documents at the next hearing, July 7, 1994.  As that next hearing day was declared a special non-working holiday, the case was reset to August 4, 1992.  Inasmuch as the counsel for petitioners had to attend to another urgent matter on August 4, 1992, he failed to appear at the hearing, although he filed a motion for postponement. The Labor Arbiter denied the motion and issued an order considering the case as submitted for resolution.  On motion for reconsideration of petitioners, the Labor Arbiter reset the case for the reception of additional evidence on October 30, 1992.  Petitioners again failed to appear on said date, prompting the Labor Arbiter to consider the case submitted for resolution.

Under the foregoing circumstances we cannot say that the Labor Arbiter abused his discretion in considering the case submitted for resolution on October 30, 1992.  There is no denial of due process where the party was given an opportunity to present his case, which he did not take advantage of.

That being the case, the claim of private respondent for thirteenth month pay (P16,083.32), overtime pay (P21,977.56), and unpaid salary (P31,166.66) stands unrebutted.

WHEREFORE, the petition is partially GRANTED.  The dismissal of private respondent is deemed with just cause.  The assailed Resolution is hereby SET ASIDE and ANNULLED.  Instead, petitioners are ordered to pay to private respondent the following sums, viz., (a) indemnity of P1,000.00, (b) thirteenth month pay of P16,083.32, (c) overtime pay of P21,977.56 and (d) unpaid salary of P31,166.66.

SO ORDERED.

PHILIPPINE SAVINGS BANK, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and VICTORIA T. CENTENO, respondents.

This is a petition for certiorari to annul the decision of the National Labor Relations Commission in NLRC Case No. RB-IV-2-1554-85, affirming the decision of the Labor Arbiter, which found petitioner guilty of illegal dismissal, and the resolution of the NLRC denying reconsideration.

The facts are as follows:

Private respondent Victoria T. Centeno started, as a bank teller of petitioner Philippine Savings Bank, on November 3, 1965.  Through the years she was promoted, becoming  on February 4, 1985,  assistant cashier of petitioner’s Taytay branch, at a salary of P2,672.00 a month.

From September 17, 1984 to November 15, 1984, private respondent was acting branch cashier, substituting for Mrs. Victoria Ubaña, who had gone on maternity leave.  As acting branch cashier, private respondent was in charge of the cash in the vault and the preparation of the daily cash proof sheet, which was a daily record of the cash in the vault and was used as basis in determining the starting balance on the next banking day.

On November 16, 1984, Mrs. Victoria Ubaña reported back to work.  Before turning over the cash to Mrs. Ubaña, private respondent Centeno deposited P356,400.00 in the Metropolitan Bank and Trust Co. (Metrobank). However, what appeared as amount deposited in the November 16, 1984 cash proof and batch sheets of the cashier and clearing clerk, was P371,400.00, and not P356,400.00 as shown in the Metrobank passbook.  Petitioner later charged that private respondent falsified the deposit slip and made it appear that she had deposited P371,400.00 when actually she had deposited only P356,400.00.

On December 18, 1984, the branch accounting clerk, Lolita Oliveros, discovered a discrepancy between the cash deposit recorded (P371,400.00) in the cash proof and batch sheets and the deposit actually made (P356,400.00) as reflected in the Metrobank passbook.  She called the attention of the clearing clerk, Alberto C. Jose, to the matter.  They reviewed the records and found that what had been attached to the debit ticket of Jose was a deposit slip for P356,400.00, and not for P371,400.00.

 An audit team reviewed the account of the branch and found a P15,000.00 shortage incurred on November 16, 1984, the day private respondent turned over her accountability to Mrs. Ubaña after the latter’s maternity leave.

A committee was formed to investigate the shortage.  Private respondent, the branch manager, Eladio C. Laurena, the cashier, Victoria N. Ubaña, the clearing clerk, Alberto C. Jose, and two other employees were called to the investigation.   The committee found private respondent accountable for the shortage.[1] Hence, on January 7, 1985, private respondent was given a memorandum which stated:

In connection with the shortage of P15,000.00 at Taytay Branch which has been recently discovered by the Auditing Department which shortage appears to have been deliberately perpetuated through falsifications of various documents, all of which appear to have been done by you, you are hereby required to submit your explanation within seventy two (72) hours from receipt of this memo why no administrative and/or disciplinary action shall be taken against you.

In the meantime, you are hereby preventively suspended for a period of thirty (30) days effective January 8, 1985.  (Emphasis added)

 The manager, cashier, clearing clerk and a teller, were also given “show-cause” memoranda, but only private respondent was placed under preventive suspension.

All those required to show cause filed their respective answers, except private respondent.   Instead she requested the bank’s vice-president, Antonio Viray, on January 15, 1985, to give her until January 18, 1985 within which to file her answer on the ground that she needed to consult her lawyer.  Her request was granted but private respondent nonetheless failed to answer the charges against her.

On February 4, 1985, private respondent was dismissed by the bank.  The memorandum to her read:

Memorandum

To     :  MS. VICTORIA T. CENTENO Assistant Cashier Taytay Branch

* * * * * * * * * * * * * * * * * * * * * * * ** * * * * * * * *  * * *

This is in connection with the shortage of P15,000.00 at Taytay Branch which was incurred while you were in charge of the vault.  Immediately after the discovery of the shortage, through the memorandum of the undersigned dated January 7, 1985 addressed to you, we required you to explain within seventy two (72) hours from receipt of said memo why no administrative and/or disciplinary action should be taken against you. Despite the lapse of the extension period you requested within which to submit your explanation, and up this date, you have not submitted your explanation.

After carefully evaluating the evidence presented and considering your failure to explain the shortage which tantamounts to admission of guilt, we have no alternative but to conclude, as we hereby conclude, that you were the one who misappropriated the shortage of P15,000.00.     You have therefore forfeited the confidence that the Bank has reposed on you as an officer .

IN VIEW OF THE FOREGOING, Management hereby dismisses you FOR CAUSE effective immediately with forfeiture of all benefits.  The Bank reserves the right to take such actions it may deem necessary for the recovery of the P15,000.00.  (Emphasis added)

 Private respondent sued petitioner for illegal dismissal before the Labor Arbiter.  Aside from claiming that her dismissal was without basis, she claimed that she was denied due process because she had not been informed of the specific acts for which she was dismissed.  She claimed that during her 19 years of service in petitioner bank, she never “[played] fast and loose with bank funds.”

Petitioner alleged that private respondent was dismissed for loss of trust and confidence as a result of the shortage, which, according to petitioner,  she tried to conceal by falsifying the bank’s cash proof sheet and the teller’s vale.  Petitioner claimed that private respondent was accorded due process prior to her dismissal. 

On September 15, 1988, the Labor Arbiter found petitioner guilty of having illegally dismissed private respondent and of denying her due process.  Accordingly the Labor Arbiter ordered:

WHEREFORE, responsive to the foregoing, judgment is as it is hereby entered in favor of complainant and against respondent:

1.  Considering the termination of complainant illegal;

2.  Ordering respondent to reinstate complainant to her former position or equivalent position with full backwages from the time of her unlawful termination and until actually reinstated without loss of seniority rights and other privileges appertaining to her position;

3.  Ordering respondent to pay complainant moral and exemplary damages in the amounts of Fifty Thousand Pesos (P50,000.00) and Ten Thousand Pesos (P10,000.00), respectively; and,

4.  Ordering respondent to pay complainant attorney’s fees equivalent to ten (10%) per cent of the total award.

SO ORDERED.

On appeal, the NLRC affirmed with modification thus:

PREMISES CONSIDERED, the Decision of September 15, 1988 is hereby MODIFIED with the deletion of awards representing moral/exemplary damages and attorney’s fees.  However, the award of backwages and other benefits shall not exceed three (3) years as laid down by the Supreme Court.  Respondent is hereby directed to pay complainant backwages in the amount of NINETY SIX THOUSAND ONE HUNDRED NINETY TWO PESOS (P96,192.00) and/or other benefits due.  The other findings stand AFFIRMED.

SO ORDERED.

Both parties moved for reconsideration, but their motions were denied by the NLRC in its resolution on July 8, 1993. 

Hence this petition.  Petitioner claims that the NLRC gravely abused its discretion in:

a) holding that private respondent Centeno was denied due process of law prior to her dismissal; and

b) failing to fully discuss all the six (6) assigned errors raised by the petitioner in its appeal by ignoring:

1) the valid ground wherein petitioner based its termination of the service of private respondent, and that is loss of confidence;

2) the specific circumstances that led the petitioner to lose its trust and confidence on private respondent; and

3) the applicable settled law and jurisprudence  that the private respondent, having been validly dismissed, is not entitled to reinstatement and backwages.

First.  Contrary to the finding of the Labor Arbiter and the NLRC,  private respondent was notified of the charge against her through a memorandum sent to her on January 7, 1985.   Indeed she  knew the reason for the “show-cause” order because before that, she and other employees had been asked to attend an investigation.    The law requires that the employer must furnish the worker sought to be dismissed with two (2) written notices before termination may be validly effected:  first, a notice apprising the employee of the particular acts or omission for which his dismissal is sought and, second, a subsequent notice informing the employee of the decision to dismiss him. [2] In accordance with this requirement, private respondent was given the required notices, on January 7, 1985 and then on February 4, 1985.

 The NLRC ruled that an investigation should have been conducted prior to private respondent’s dismissal.   As already noted, however,  private respondent was informed of the charges against her and given an opportunity to answer the charges.  Upon her request, she was given until January 18, 1985 within which to file her answer.  But she failed to file her answer.  Of course she later tried to explain that she did not find it necessary to do so because  “there was, after all, no ground for any action against [her] . . . and  [she] did not feel obligated, therefore, to dispute the action which was baseless and unfounded.”[3] Furthermore, she claimed she thought  “the Committee had prejudged the case against her.”[4]

Whatever her reason might have been, the fact is that petitioner waived the right to be heard in an investigation.   Due process is not violated where a person is not heard because he has chosen not to give his side of the case.  If he chooses to be silent when he has a right to speak, he cannot later be heard to complain that he was silenced.[5] Private respondent having chosen not to answer, should not be allowed to turn the tables on her employer and claim that she was denied due process.  Indeed, the requirement of due process is satisfied when a fair and reasonable opportunity to explain his side of the controversy is afforded the party.   A formal or trial-type hearing is not at all times and in all circumstances essential, especially when the employee chooses not to speak.[6]   Under the circumstance of this case, it is too much to require petitioner to hear private respondent before the latter can be dismissed.  

Happily, no liability was imposed on petitioner by either the Labor Arbiter or the NLRC despite the finding that petitioner had denied private respondent due process.  Accordingly, all that we need to do in this case is to record our finding that petitioner fully complied with its duty under the law to accord due process to private respondent.

Second.  Petitioner also claims that the NLRC gravely abused its discretion in not passing upon three (3) errors assigned by it on appeal.

We find the contention without merit.   In affirming the Labor Arbiter, the NLRC found the evidence supporting the Labor Arbiter’s factual findings to be substantial and for this reason apparently found it unnecessary to make a separate discussion. Factual findings of administrative agencies are generally accorded respect and even finality in this Court if they are supported by substantial evidence.[7]

Petitioner makes a “reconstruction” of the facts which, according to it, shows how the shortage incurred on November 16, 1984 was concealed.  The “reconstruction” is as follows:

A)  During the turn-over of the cash in vault by Mrs. Victoria Centeno to Mrs. Victoria Ubaña, after counting the cash in vault, no formal recording of how much cash was actually turned over was done.  However, from the Cash Proof in November 16, 1984, it could be reconstructed and determined whether there is a shortage or not by the following figures:

Cash Balance, Nov. 15 ‘84                                                          P589,572.02

Deduct:  Cash Vales of

        Tellers at start  of

         banking day

         Pico of Teller No. 1                P19,207.06

         Pico of Teller No. 2                P21,666.21

         Pico of Teller No. 3                P21,995.25                [P 62,868.52]

Balance: Paper Bills & Coins                                             P536,703.50     

Deduct: Deposit with Metrobank                                       P356,400.00

Balance that should have been

        turned over                                                                  P170,303.50

Additional Vale-Coins-Teller 3                                          P                   11.00

Balance                                                                                P170,292.50

Add:  Sorted Paper Bills turned

         over by the tellers to the

         cashiers:

        Teller No. 1                             P100,000.00 

        Teller No. 1                                 P  40,000.00

        Teller No. 2                                 P147,200.00  

                                                               [P 46,202.64]               [P333,402.64]

CORRECT CASH BALANCE

November 16, 1984                                                               P503,695.14

Cash Balance per Cash

Proof November 16, 1984                                            P488,695.14

SHORTAGE                                                                 P     15,000.00

B) The above P15,000.00 shortage was covered up in two (2) ways or stages:

First:  In the original or untampered cash proof, the deposit to Metrobank was written originally as P371,400.00 instead of the actual deposit of P356,400.00.  The writing of the P371,400.00 deposit to Metrobank was based on a deposit slip for P371,400.00 given to Mrs. Victoria Ubaña by Mrs. Victoria Centeno.  The same deposit slip for P371,400.00 was also given to Mr. Alberto Jose, the Clearing clerk, who used the same to enter the P371,400.00 deposit with Metrobank in the Batch Sheet, as well as in the preparation of the Debit and Credit Tickets.  The P15,000.00 shortage, which is the difference between P371,400.00 and P356,400.00 was therefore concealed in the P371,400.00 deposit to Metrobank, which actually and truly was for P356,400.00 only.

Second:  When the genuine deposit slip to Metrobank for P356,400.00 was placed in the Cash Proof file and the spurious deposit slip for P371,400.00 was removed by whoever was responsible for the shortage, the cashproof will NOT BE BALANCED, so that the second step was to ADD P15,000.00 to the P11.00 cash vale of Teller No. 3 to make it appear as if the vale was for P15,011.00.  In this way, the cash proof will again be balanced, since the decrease of P15,000.00 in deposit with Metrobank from P371,400.00 to P356,400.00 was shifted  to the P15,011.00 vale which was actually P11.00 only.

Though the P371,400.00 deposit slip is now missing, the insertion of the P15,000.00 in the vale of Teller No. 3 is very apparent, since the duplicate vale in the possession of the Teller has not been tampered and remains as P11.00.  Incidentally, it had not missed the petitioner’s attention also that, by force of habit, Teller No. 3 was accustomed to placing a “hyphen” across the centavo figures in her Teller’s vales when there was no centavo entry thereon; the added figures amounting to P15,000.00 on the other hand did not contain such a “hyphen” in the centavo of the vale, leading us to believe that the addition of P15,000.00 could not have been made by the Teller concerned”.  (Affidavit of Norberto Robleza dated 09 October 1985, pp. 4-6)

Loss of trust and confidence is a cause for dismissing an employee who is entrusted with fiducial matters, or with the custody, handling or care and protection of the employer’s property.[8]There is no dispute about this.  But the employer must clearly and convincingly establish the facts and incidents upon which its loss of confidence in the employee may be fairly made to rest, otherwise, the dismissal will be rendered illegal.[9]

Petitioner’s claim is that although private respondent deposited only P356,400.00 in the Metrobank, she filled up a deposit slip showing the deposit to be P371,400.00 and this amount was recorded in the cash proof sheet and batch sheet for November 16, 1984.  But there is no evidence to show this.  The falsified deposit slip allegedly made by private respondent was not presented.  Petitioner claimed it was missing.  But as private respondent testified the amount of P356,400.00 which she deposited was recorded in the Metrobank passbook.  She gave this passbook to Mrs. Ubaña on November 16, 1984.  Yet the supposed discrepancy was not noticed by Mrs. Ubaña in preparing the cash proof sheet and the debit sheet who recorded P371,400.00 as having been deposited in Metrobank.  Petitioner’s allegation that Ms. Centeno misled the cashier and the clearing clerk into recording P371,400.00 cannot therefore be given credence.

Indeed, private respondent denied that she gave Mrs. Ubaña a falsified deposit slip showing a deposit of P371,400.00 because after the Metrobank picked up the deposit she made, private respondent handed to Mrs. Ubaña the deposit slip of P356,400.00 together with the cash proof sheet of November 15, 1984 and the key to the vault.[10] Besides, Mrs. Ubaña as already stated, had the passbook.  She could not have failed to notice that the amount deposited was P356,400.00 and not P371,400.00 as the bank now claims it was made to understand on November 16, 1984.

Petitioner claims that the party responsible for concealing the shortage altered the teller’s vale and made it appear that the vale of Teller 3 (Antonette Reyes) was P15,011.00 when the fact was that it was only for P11.00 as shown in the duplicate vale in the possession of Reyes.  This claim is subject to two objections.  First, it was not shown that private respondent had custody of the vale or, if she had access to the document, that private  respondent was the only one who had such access to it, so as to make her the only possible author of the alteration.  Second, the fact that the altered vale of Teller 3 in the possession of the bank was not in the teller’s customary way of recording does not necessarily mean that the vale she had was the authentic vale while that given to the clearing clerk was falsified.  She could have altered her usual practice of recording.

It is noteworthy that the shortage was incurred on the day (November 16, 1984) the branch regular cashier, Mrs. Victoria Ubaña, reported for work.  It was she in fact who prepared the cash proof sheet.  The alteration in the cash proof sheet on that day could not have been made by private respondent.  As an NBI handwriting expert stated under cross examination:

WITNESS

A     The supplemental report is also an answer to the first. The requested analysis should center on the handwritings of the two (2) persons, Mrs. Victoria Ubaña and Mrs. Victoria Centeno.  In my first report dated December 3, 1985 my findings are as follows:  The no. 1 states that there are existing fundamental differences between the questioned handwritings or figures appearing on the questioned document and the standard handwritings/figures appearing on the standard documents marked as “SV-1” thru “SV-9” and those standards were the handwritings of one Victoria Ubaña.  The result of which is that the questioned handwritings and the standard handwritings were not written by one and the same person.  And then in statement that the submitted standards, signatures under the specimen named Victoria Centeno any findings whether Victoria Centeno or not is the writer of the questioned handwritings, so I made the supplemental report to make a definite answer that all the figures and handwritings appearing on the cash proof sheet which is being questioned were not written by Victoria Centeno to answer this phrase. (Emphasis supplied)

Furthermore,  the cash proof sheet and the vale were kept in the bank’s vault, the key to which was held only by Mrs. Ubaña, as cashier of the bank.[11] Any alteration in the documents by private respondent or by any party could, therefore, have easily been discovered by the cashier.

Petitioner further claims that private respondent’s accounting method did not correctly reflect the bills from previous banking days and that taking into account all the entries, the amount not reflected was equivalent to the shortage.  This contention is without merit.  While the accounting method adopted by private respondent was different from the method used by Mrs. Ubaña, private respondent’s method was nonetheless an acceptable bank procedure according to Mr. Robleza, petitioner’s own witness.[12] The method adopted by private respondent was accurate, otherwise it could not have been allowed by the bank.

Indeed private respondent was acting cashier for two months, from September 17, 1984 to November 15, 1984.  During that period no shortage was ever reported.  At the time the cash in the vault was turned over to Mrs. Ubaña, it was counted and the failure to record its amount at that time can only mean one thing: that the cash turned over to Mrs. Ubaña corresponded with the amount recorded in the cash proof sheet on November 15, 1984.

Private respondent had faithfully served petitioner bank for 19 years.  Starting as a bank teller, she steadily rose to the position of assistant branch cashier.  Considering this fact, petitioner should have been more careful in determining liability for the loss rather than merely relying on what it calls circumstantial evidence of guilt.  The fact that only private respondent did not answer the charge when required in the memorandum of petitioner is not an indication of her guilt. While we recognize that petitioner has a wide  latitude in dismissing a bank officer,  nonetheless, the evidence on which it acts must be substantial. 

As the dismissal of private respondent is illegal, she is entitled to  reinstatement to her former position without loss of seniority rights and to the payment to her of backwages.[13] The NLRC correctly limited the award of backwages to three years, consistent with the rule at the time of private respondent’s dismissal. [14] R.A. No. 6715, which amended Art. 279 of the Labor Code, awarding full backwages to illegally dismissed employees, cannot be retroactively applied to dismissals taking place before its effectivity on March 21, 1989.[15]

WHEREFORE, the petition is DISMISSED

RAYCOR AIRCONTROL SYSTEMS, INC., petitioner, vs.  NATIONAL LABOR RELATIONS COMMISSION AND ROLANDO LAYA, et al., respondents.

The Facts

Petitioner's sole line of business is installing airconditioning systems in the buildings of its clients.  In connection with such installation work, petitioner hired private respondents Roberto Fulgencio, Rolando Laya, Florencio Espina, Romulo Magpili, Ramil Hernandez, Wilfredo Brun, Eduardo Reyes, Crisostomo Donompili, Angelito Realingo, Hernan Delima, Jaime Calipayan, Jorge Cipriano, Carlito de Guzman, Susano Atienza, and Gerardo de Guzman, who worked in various capacities as tinsmith, leadman, aircon mechanic, installer, welder and painter.  Private respondents insist that they had been regular employees all along, but petitioner maintains that they were project employees who were assigned to work on specific projects of petitioner, and that the nature of petitioner's business -- mere installation (not manufacturing) of aircon systems and equipment in buildings of its clients -- prevented petitioner from hiring private respondents as regular employees.  As found by the labor arbiter, their average length of service with petitioner exceeded one year, with some ranging from two to six years (but private respondents claim much longer tenures, some allegedly exceeding ten years).

In 1991, private respondent Laya and fourteen other employees of petitioner filed NLRC NCR Case No. 00-03-02080-92 for their "regularization".  This case, was dismissed on May 20, 1992for want of cause of action.[4]

On different dates in 1992, they were served with uniformly-worded notices of "Termination of Employment" by petitioner "due to our present business status", which terminations were to be effective the day following the date of receipt of the notices.  Private respondents felt they were given their walking papers after they refused to sign a "Contract Employment" providing for, among others, a fixed period of employment which "automatically terminates without necessity of further notice" or even earlier at petitioner's sole discretion.

Because of the termination, private respondents filed three cases of illegal dismissal against petitioner, alleging that the reason given for the termination of their employment was not one of the valid grounds therefor under the Labor Code.  They also claimed that the termination was without benefit of due process.

The three separate cases filed by private respondents against petitioner, docketed as NLRC-NCR 00-03-05930-92, NLRC NCR 00-05-02789-92, and NLRC NCR 00-07-03699-92, were subsequently consolidated.  The parties were given opportunity to file their respective memoranda and other supplemental pleadings before the labor arbiter.

On January 22, 1993, the Labor Arbiter issued his decision dismissing the complaints for lack of merit.  He reasoned that the evidence showed that the individual complainants (private respondents) were project employees within the meaning of Policy Instructions No. 20 (series of 1977) [5] of the Department of Labor and Employment, having been assigned to work on specific projects involving the installation of air-conditioning units as covered by contracts between their employer and the latter's clients.  Necessarily, the installation of airconditioning systems "must come to a halt as projects come and go", and "(o)f consequence, the [petitioner] cannot hire workers in perpetuity.  And as project employees, private respondents would not be entitled to termination pay, separation pay, holiday premium pay, etc.; and neither is the employer required to secure a clearance from the Secretary of Labor in connection with such termination.

Private respondents appealed to the respondent NLRC, which in its November 29, 1993 Decision reversed the arbiter and found private respondents to have been regular employees illegally dismissed.  The respondent Commission made the following four-paragraph disquisition:

"From the above rules, it can easily be- gleaned that complainants belong to a work pool from which the respondent company drew its manpower requirements.  This is buttressed by the fact that many of the complainants have been employed for long periods of time already.

We doubt respondent's assertion that complainants were really assigned to different projects.  The 'Contract Employment' which it submitted (see pp. 32-38, record) purporting to show particular projects are not reliable nay even appears to have been contrived.  The names of the projects clearly appear to have been recently typewritten.  In the 'Contract Employment' submitted by complainants (see p. 65, record), no such name of project appears.  Verily, complainants were non-project employees.

Anent the dismissal of complainants, suffice it to state that the same was capricious and whimsical as shown by the vague reason proffered by respondent for said dismissal which is 'due to our present business states' (should read 'status') is undoubtedly not one of the valid causes for termination of an employment. We are thus inclined to give credence to complainants' allegation that they were eased out of work for their refusal to sign the one-sided 'Contract Employment.'

The fact that complainants were dismissed merely to spite them is made more manifest by respondent's failure to make a report of dismissal or secure a clearance from the Department of Labor (see pp. 196 and 197, record) as required under P.I. No. 20 and their publication of an advertisement for replacements for the same positions held by complainants (see p. 298, record).  Even assuming that complainants were project employees, their unceremonious dismissal coupled with the attempt to replace them via the newspaper advertisement entitles them to reinstatement with backwages under P.I., No. 20."

The dispositive portion followed immediately and read:

"WHEREFORE, the appealed Decision is hereby SET ASIDE and a new one entered ordering respondent to:

1.            Immediately reinstate complainants (private respondents) to their former positions without loss of seniority rights and privileges; and

2.            Pay them full backwages from the time they were dismissed up to the time they are actually reinstated."

Petitioner's motion for reconsideration was denied by public respondent on February 23, 1994 for lack of merit.  Hence, this petition.

Issues

Petitioner charges public respondent NLRC with grave abuse of discretion in finding private respondents to have been non-project employees and illegally dismissed, and in ordering their reinstatement with full backwages.

For clarity's sake, let us re-state the pivotal questions involved in the instant case as follows:   whether private respondents were project employees or regular (non-project) employees, and whether or not they were legally dismissed.

In support of its petition, petitioner reiterates the same points it raised before the tribunals below:  that it is engaged solely in the business of installation of airconditioning units or systems in the buildings of its clients.   It has no permanent clients with continuous projects where its workers could be assigned; neither is it a manufacturing firm.  Most of its projects last from two to three months.  (The foregoing matters were never controverted by private respondents.) Thus, for petitioner, work is "not done in perpetuity but necessarily comes to a halt when the installation of airconditioning units is completed."

On the basis of the foregoing, petitioner asserts that it could not have hired private respondents as anything other than project employees.  It further insists that "(a)t the incipience of hiring, private respondents were appraised (sic) that their work consisted only in the installation of airconditioning units and that as soon as the installation is completed, their work ceases and that they have to wait for another installation projects (sic)." In other words, their work was co-terminous with the duration of the project, and was not continuous or uninterrupted as claimed by them. Petitioner also claims that the private respondents signed project contracts of employment indicating the names of the projects or buildings they are working on.  And when between projects, there project employees were free to work elsewhere with other establishments.

Private respondents controverted these assertions of petitioner, claiming that they had worked continuously for petitioner for several years, some of them as long as ten years, and thus, by operation of law had become regular employees.

The Court's Ruling

Ordinarily, the findings made by the NLRC are entitled to great respect and are even clothed with finality and deemed binding on this Court, except that when such findings are contrary to those of the labor arbiter, this Court may choose to re-examine the same, as we hereby do in this case nor.

WHEREFORE, the foregoing considered, the assailed Decision is hereby SET ASIDE and a new one rendered holding that petitioner had failed to discharge its burden of proof in the instant case and therefore ORDERING the reinstatement of private respondents as regular employees of petitioner, without loss of seniority rights and privileges and with payment of backwages from the day they were dismissed up to the time they are actually reinstated

WALLEM MARITIME SERVICES vs. NLRC263 SCRA 174FACTS: Joselito Macatuno, private respondent, was a seaman on board theM / T   F o r t u n a   o f   L i b e r i a n   r e g i s t r y .   H e   w a s   h i r e d   b y  

W a l l e m Shipmanagament Ltd. Thru its manning agent Wallem Maritime ServicesInc. Macatuno’s contract of employment covers 10 months.Wh i l e t he vesse l was be r thed a t t he po r t o f Kawasak i , Japan , an altercation took place between Macatuno and Gurimbao, a fellow Filipinoagainst a cadet/apprentice officer of the same nationality as the captaino f   t he   vesse l .  The   cade t / app ren t i ce  o rde red  Gur imbao   t o   shove  and throw dirty and oily water at the port of Japan. The latter protested sincesuch  ac t   i s   aga ins t   t he   l aws  o f   Japan .  Howeve r ,   t he   cade t / app ren t i ce insisted on his orders so Gurimbao complied with it. Having finished his  j o b ,   G u r i m b a o   s o u g h t   t h e   a i d   o f   M a c a t u n o   t o  a p p r o a c h   t h e cadet/apprentice about his “improper and unauthorized act.” When thet w o   F i l i p i n o s   a p p r o a c h e d   t h e   c a d e t / a p p r e n t i c e ,   t h e   l a t t e r   r e a c t e d violently so Macatuno LEB“pushed” the latter twice on his chest whileGurimbao “mildly hit his arm.” The captain witnessed the altercation and entered the incident inthe tanker’s logbook. He summoned the two Filipinos at his cabin. Thec a p t a i n   t o l d   t h e m   t o   p a c k   t h e i r   t h i n g s   a s   t h e i r   s e r v i c e s   a r e  b e i n g t e r m i n a t e d .   A s   a   c o n s e q u e n c e ,   t h e   t w o   w e r e   r e p a t r i a t e d   t o   t h ePhilippines where they lodged complaints for illegal dismissal with theP O E A . P e t i t i o n e r s   c o n t e n d   t h a t   t h e   t w o  F i l i p i n o s   h a d   b e e n delinquent on board the vessel as shown by the records of the captain’slogbook  T h e   P O E A   f o u n d   t h a t   t h e   p r i v a t e   r e s p o n d e n t s   M a c a t u n o  a n d Gurimabao’s dismissals were illegal. The NLRC affirmed the decision of  the POEA. Hence, the instant petition.ISSUE:Whether the dismissal of the two seamen were illegal.RULING/DECISION:  T h e   C o u r t   u p h e l d   t h e   d e c i s i o n   o f   t h e   N L R C   i n   f i n d i n g   t h a t   t h e private respondents were illegally dismissed.Pe t i t i one rs  d i d no t   subm i t as  ev idence t o   t he POEA   the l ogbook itself but was merely a typewritten collation of excerpts from whatcould be the logbook. Hence, as the typewritten excerpts from then “logbook”were the only pieces of evidence presented by petitioners to support thed i s m i s s a l   o f   p r i v a t e   r e s p o n d e n t   h a v e   n o   p r o b a t i v e   v a l u e   a t  a l l , petitioners’ cause must fail. That the workers involvement in the incident was “mustered” orconvened   t he rea f t e r   by   t he   cap ta in   i s   i nconsequen t i a l .   I t   i s   su f f i c i en t comp l i ance w i t h t he l aw wh i ch , r equ i res , as a v i t a l componen t o f duep rocess ,   obse rvance  o f   t he   tw in   requ i remen ts  o f   no t i ce  and  hea r i ng before dismissing an employee.

CONRADO SAMILLANO and MYRNA V. SAMILLANO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, DAN-AGSA DAKBAYAN BROADCASTING CORPORATION RADIO STATION DXDD, MSGR. JESUS DOSADO and SIMPLICIA NERI, respondents.

This petition for certiorari under Rule 65 of the Rules of Court refers to two (2) cases filed by petitioner-spouses Conrado and Myrna Samillano against private respondents Dan-ag sa Dakbayan Broadcasting Corporation-Radio Station DXDD and/or Msgr. Jesus Dosado and/or Simplicia Neri, Chairman of the Board and Manager respectively of said respondent corporation.

The first case, filed by petitioner-spouses on 8 February 1991, is a complaint for illegal demotion while the second complaint filed on 20 May 1991 is for illegal dismissal, payment of backwages, commissions and other monetary claims.

The two (2) complaints before Regional Arbitration Branch No. 10, Cagayan de Oro City of the National Labor Relations Commission (NLRC) docketed as NLRC RAB Case Nos. 10-03-00195 and 10-06-00371-91 were later consolidated since they involve the same parties and issues.

The undisputed facts of the two (2) cases are as follows:

1. Petitioner-spouses Conrado and Myrna Samillano were hired by private respondents on 1 October 1981 and 1 August 1983 respectively;

 2. On 2 October 1990, Conrado Samillano was transferred to the Technical Department as an SSB Operator from his previous position as Traffic Supervisor of private respondent corporation.  On the same day, his wife Myrna V. Samillano was transferred to the AM Production Department from her position as cashier of respondent corporation;

3. As a result of the transfers, the petitioner-spouses filed the complaint for illegal demotion contending that the transfers resulted in loss of commissions and violated their security of tenure;

4. On 20 May 1991, petitioner-spouses filed the complaint for illegal dismissal contending that private respondents terminated their employment on 23 April 1991 without any lawful cause;

5. Private respondents relied on allegations that petitioner-spouses misappropriated funds of the radio station and committed acts of insubordination which resulted in loss of trust and confidence, upon which their dismissals were based;

6. In a supplemental position paper, herein petitioners contended that their demotion and subsequent dismissal were retaliatory acts of private respondents for their having reported violations by private respondents of labor laws particularly underpayment/nonpayment of salaries and other benefits;

Labor Arbiter Noel Augusto S. Magbanua, to whom the cases were assigned, found that sometime in July 1989, the Department of Labor and Employment conducted an inspection of the premises of private respondent corporation and initially found deficiencies in wages and other benefits given to employees.

It was further determined that in March or April 1990, private respondents conducted meetings with their employees seeking a compromise of the unpaid benefits.  Some employees executed waivers of further claims against private respondents.  Herein petitioners refused to sign said waivers.

The labor arbiter formulated the following issues for resolution:[1]

1) whether complainants’ demotion and subsequent termination of employment were retaliatory acts for complainants’ having allegedly reported respondents’ violations of labor laws,

2) whether complainants’ demotions were illegal; and

3) whether complainants’ terminations from employment were illegal.

The labor arbiter resolved the first two (2) issues in the negative.  He declared that no evidence was presented to show that the demotions of petitioners were linked to their reporting of alleged violations by private respondents of the Labor Code.

The labor arbiter further upheld management’s prerogative, in the absence of bad faith, to protect its rights in relation to the alleged offenses committed by petitioners.  The demotions of petitioners were therefore upheld.

With respect to the dismissal of petitioners from employment, however, the labor arbiter found that the alleged misappropriations of funds committed by petitioners were not adequately substantiated.  Hence, the dismissal of petitioners was declared illegal.

The labor arbiter ruled however that instead of reinstatement, it would be for the best interest of the parties considering the strained relations between them, to award petitioners separation pay equivalent to one (1) month salary for every year of service.  Full backwages were not awarded based on findings that petitioners acted in an arrogant and uncooperative manner during the investigation of their case which could be a possible reason why private respondents were not able to prove the formers’ involvement in the financial irregularities subject of this case.[2] Only six (6) months backwages were awarded to each of the complainants (herein petitioners).

Finally, the labor arbiter denied petitioners’ claims for unpaid commissions for lack of evidence.

Appeal by private respodnents to the NLRC was dismissed on 9 February 1994 for their failure to properly perfect their appeal.  The NLRC found that private respondents had filed their notice of appeal without attaching thereto their appeal memorandum as required by Section 3 Rule VI of the Rules of Procedure of the NLRC.   There was therefore failure to perfect the appeal within the reglementary period of ten (10) days from receipt of the assailed labor arbiter’s decision.

On 30 June 1994, the NLRC reinstated the appeal based on findings that while the notice of appeal and appeal memorandum were received by the NLRC on 15 July 1993 and 20 July 1993 respectively, or way beyond the period for appeal which expired on 3 July 1993, both pleadings were, however, actually mailed on 2 July 1993 as evidenced by Registry Receipt No. 77 of the Tangub Post Office.[3]

On the merits of the appeal, the NLRC ruled that private respondents have substantiated their claim of having lost trust and confidence in petitioners due to serious irregularities in the performance of their duties.

The NLRC held that, contrary to the findings of the labor arbiter, an audit report submitted by a certain Domeciano Adaya dated 17 September 1990 showed substantial evidence of petitioners’ involvement in irregularities including misappropriations of funds, non-turnover of collections and misuse of funds for personal purposes.  The NLRC relied on reports made by Janice Poncianos, the Finance Department Business Head of respondent corporation’s radio station addressed to the station manager as well as the report of the station manager to the chairman of the board of respondent corporation on the alleged acts of herein petitioners.[4]

Based on the above findings, the NLRC set aside the assailed decision and ruled that petitioners were validly dismissed.  However, private respondents were ordered to indemnify petitioners the amount of P2,000.00 each for violation of the latters’ right to due process.  The NLRC agreed with the petitioners that there was no formal investigation wherein the latter were given the chance to defend themselves against the charges levelled against them.[5]

In their petition before this Court, it is argued by petitioners that:

1. The NLRC gravely abused its discretion in holding that the dismissals of herein petitioners were valid; and

2. The NLRC gravely abused its discretion in merely imposing a sanction on private respondents for violation of petitioners’ right to due process.[6]

Before ruling on the merits of this petition, the Court takes notice of a peculiar circumstance regarding the appeal of the private respondents from the decision of the labor arbiter.

In the resolution reinstating private respondents’ appeal, the NLRC found that the notice of appeal and memorandum on appeal were received on 15 July 1993 and 20 July 1993 respectively. The reason for reinstating the appeal was the finding that both pleadings were actually mailed on 2 July 1993 as evidenced by Registry Receipt No. 77 postmarked on the same date at the Tangub City Post Office.

It is unexplained however why two (2) pleadings mailed together using a single registry receipt and presumably contained in one (1) envelope would be received on two (2) different dates.  It should be pointed out that in the motion for reconsideration of the resolution dismissing the appeal, herein private respondents averred mailing only the notice of appeal and a postal money order to cover appeal fees on 2 July l993.  Be that as it may, the Court shall proceed to resolve this case on the merits despite the possible technicality of the appeal being filed late with the NLRC.  The NLRC is however reminded to be more accurate in recording the dates of mailing and receipt of pleadings filed before it since this is essential in the speedy and correct disposition of cases.

Petitioners do not dispute before this Court the validity of their re-assignments.  It is clear that the re-assignments were a valid exercise of management prerogative pending investigation of the alleged irregularities.  The purpose of the re-assignments is no different from that of preventive suspension which private respondents could likewise have validly imposed on petitioners; to protect the employer’s property pending investigation of the alleged malfeasance or misfeasance committed by the employee.[7]

In the present case, the labor arbiter correctly held that there is no evidence to show that the transfer of petitioners to other positions and the subsequent termination of their employment were retaliatory acts of private respondents for petitioners’ reporting of the alleged violations by private respondents of the Labor Code.

The legality of petitioners’ dismissal would be determined based on whether or not private respondents have proved the basis for loss of trust and confidence upon which the dismissals are based.

In China City Restaurant Corporation v. NLRC[8] the Court held thus:

“For loss of trust and confidence to be a valid ground for the dismissal of employees, it must be substantial and not arbitrary, whimsical, capricious or concocted.

Irregularities or malpractices should not be allowed to escape the scrutiny of this Court.  Solicitude for the protection of the rights of the working class are of prime importance.  Although this is not a license to disregard the rights of management, still the Court must be wary of the ploys of management to get rid of employees it considers as undesirable.”

The NLRC based its decision upholding petitioners’ dismissal on the conclusion that the irregularities involving petitioners were more than sufficient to make out a case of loss of trust and confidence.[9]

Said irregularities allegedly involving petitioners were enumerated in An Updated Report dated 17 August 1990 submitted by the Finance Department Business Head Janice Procianos and various letter-memos to petitioners as well as the audit report dated 17 September 1990 submitted by Domeciano Adaya.

But petitioners correctly argue that the above-mentioned documents do not provide enough basis for termination of their employment based on loss of trust and confidence.

The Adaya audit report in part reads:

“I am suggesting with a request that the above-mentioned observations be reviewed and confirmed by the Station Accountant, Bookkeeper, Collector and Cashier or Cash Custodian in my presence in fairness to everyone before I give conclusion, implication or opinion to these observations.  They may also give comments or raise objections, if any.  The comments or objections may be made orally or in writing.

In this connection, as I don’t have line authority over the personnel concerned may I request you to ask them to review and confirm by observations.”

There is no evidence to show that herein private respondents undertook to review and/or confirm the observations contained in the audit report as recommended by the audit report itself.

On the contrary, even in their comment on the petition filed with this Court, which respondents’ later adopted as their memorandum, the dismissal of herein petitioners is justified mainly on the basis of said audit report submitted by Domeciano Adaya.[10]

It is, however, clear from the above-quoted portion of the audit report that the findings contained therein do not categorically find herein petitioners guilty of committing irregularities.  The clear import of the said audit report is that further investigation and verification would be necessary to pinpoint the source of the irregularities.

There is thus no evidence on record to show that any further investigation and verification were done by private respondents.  What is apparent is that petitioners were made to answer charges of misconduct based on suspicions which lacked adequate basis.

While the law and this Court recognize the right of an employer to dismiss an employee based on loss of trust and confidence, the former’s evidence must clearly and convincingly establish the facts upon which the loss of trust and confidence in the employee is based.[11]

In the present case, the unsubstantiated suspicions and baseless conclusions of private respondents do not provide legal justification for dismissing herein petitioners.  The doubt in this case should be resolved in favor of labor pursuant to the social justice policy of labor laws and the Constitution.

Finally, on petitioners’ right to due process, we uphold the NLRC findings that no formal investigation was conducted prior to dismissal of petitioners.  Private respondents thus failed to adequately comply with the requirement that an employee should be given the opportunity to be heard and to defend himself before he is dismissed.  In San Antonio v. NLRC,[12] the Court stated that “Proper compliance with the twin requirements of notice and hearing are conditions sine qua non before a dismissal may be validly effected. x x x Any procedural shortcut, that effectively allows an employer to assume the roles of both accuser and judge at the same time, should not be countenanced.” (emphasis supplied).

In the present case, the notices/memoranda to petitioners requiring explanations/answers to the charges against them were plainly meant to provide a semblance of compliance with the due process requirement which the NLRC correctly ruled to be inadequate.

The Court will not be deceived by schemes to circumvent the requirements of law and the Constitution.  For failure to fully comply with the requirements of due process, private respondents should, as a matter of course, indemnify the petitioners but we refrain from awarding damages on this score since we are awarding separation pay and backwages due to petitioners’ illegal dismissal.

The above-finding that petitioners were illegally dismissed normally requires that they be reinstated to their former or equivalent positions with full backwages. In this case, however, the relationships between petitioners and private respondents have undoubtedly become very strained, hence, separation pay in lieu of reinstatement is proper.[13] However, as a consequence of petitioners’ illegal dismisal, full backwages from date of dismissal to the finality of this decision are due the petitioners in line with the ruling in the Bustamante case.[14]

WHEREFORE, the decision appealed from is hereby SET ASIDE and a new one entered:

1. DECLARING the dismissal from employment of petitioners NULL and VOID;

2. ORDERING private respondents to pay petitioners’ separation pay at the rate of ONE-HALF (1/2) MONTH salary for every year of service; and

3. ORDERING private respondents to pay petitioners full backwages from date of illegal dismissal to the finality of this decision.

STOLT-NIELSEN MARINE SERVICES, INC., petitioner vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER MANUEL R. CADAY and RENATO SIOJO, respondent.

D E C I S I O N

ROMERO, J.:

Before us is a special civil action for certiorari filed by the petitioner seeking to annul the decision of the labor arbiter and the resolution of the National Labor Relations Commission (NLRC) (Third Division, Quezon City) finding that petitioner illegally dismissed private respondent Renato Siojo from his employment.  The labor arbiter ordered petitioner to pay Siojo the unexpired portion of his contract equivalent to three months’ salaries and attorney’s fees.  On appeal, the NLRC affirmed the decision of the labor arbiter and later dismissed petitioner’s motion for reconsideration.

The relevant facts are as follows:

Sometime in January 1994, private respondent Renato Siojo was hired as a Second Officer of Stolt Falcon, a vessel of petitioner Stolt-Nielsen Marine Services, Inc., for a period of nine months with a basic salary of US$1,024.00.   He boarded the vessel on February 22, 1994, and immediately commenced to discharge his duties and responsibilities as Second Officer.   After working for just two months, however, he was sent home and it was only upon his arrival in Manila that he learned of the reason for his termination.

For its part, petitioner claimed that after a month on board the Stolt Falcon, Siojo started committing acts of gross insubordination towards his superiors by refusing to communicate with them with regard to navigation, safety, and cargo.   He also allegedly failed to acknowledge or relay to the relieving personnel/officer any bride night order and wilfully refused to take part in cargo operations.  Furthermore, on at least three occasions, he refused to wear his safety hat during mooring and unmooring, in violation of the company’s safety procedures.

It was also alleged that Siojo refused to follow instructions given by the Chief Officer regarding cargo operations and did not read the Cargo Safety Data Sheets, such that , on one occasion, he blew the lines against a closed shore connection valve resulting in the spillage of 100 litters of cargo into the deck air compressor tank.

Thus, on March 28, 1994, Siojo was summoned to explain his attitude to the master of the vessel.  He, however, allegedly became very agitated and rude, stating that he should not be made to sign any statement. Convinced that Siojo’s acts of insubordination and hostile attitude were prejudicial to the safety and operations of the vessel, and finding that he failed to perform his duty as deck officer as confirmed by his unsatisfactory ratings, his superiors recommended his discharge.

On the other hand, Siojo insisted that all the acts imputed to him were fabricated by petitioner in order to avoid its liability for his illegal dismissal.  In support of his allegations, Siojo submitted photocopies of the ship’s logbook for the period March

25 to April 11, 1994, showing that there was no report of any offense or violation of company rules he had supposedly committed.  He pointed out that the logbook had no entries of the infractions he allegedly committed on March 27 and 28, 1994, respectively.

On June 21, 1996, Labor Arbiter Manuel Caday ruled that Siojo was dismissed without just cause and without being accorded due process.  The dispositive portion of the decision reads:

“WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of the complainant illegal and ordering respondent Stolt Nielsen Marine Services, Inc. to pay the corresponding salaries for the unexpired portion of his contract but not exceeding the equivalent of three (3) months salaries or in the amount of $3,072.00 which under the current peso dollar exchange rate is equivalent to P80,486.40.

For having been compelled to hire services of counsel to prosecute his valid and just claims, the respondent is further ordered to pay the complainant (sic), the equivalent of 10% of the recoverable award in this case.

All other claims are hereby dismissed for lack of merit.

SO ORDERED.”[1]

Aggrieved by the labor arbiter’s decision, petitioner appealed to the NLRC.  The latter denied the appeal for lack of merit and affirmed the decision of the labor arbiter.  The NLRC likewise denied petitioner’s motion for reconsideration.

Hence, this petition for certiorari.

Petitioner claims that the labor arbiter and the NLRC committed grave abuse of discretion in not considering its evidence and in finding that Siojo was illegally dismissed.

On the labor arbiter’s and NLRC’s appreciation of the facts, it is worth reiterating the well-entrenched rule that when the conclusions of the labor arbiter are sufficiently corroborated 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. [2] Moreover, it should be noted that factual issues are not a proper subject forcertiorari, as the power of the Supreme Court to review labor cases is limited to the issue of jurisdiction and grave abuse of discretion.[3]

In the case at bar, the findings of the labor arbiter Siojo was dismissed without just cause and without being accorded due process is supported by the facts and evidence on record.  In support of his denial of the infractions he allegedly committed, Siojo presented in evidence photocopies of the ship’s official logbook entries for the period March 25 to April 11, 1994.   Such entries failed to reflect any of the infractions allegedly committed by  Siojo; neither did they contain any statement regarding the investigation supposedly conducted on board the vessel.

Petitioner’s evidence, on the other hand, consisting of the notice of investigation and notice of termination which were authenticated by the Honorary Consulate General of the Philippines in Rotterdam, Netherlands, appear to be irrelevant.   The date of the authentication appeared as “3/5/94” which the labor arbiter read as March 5, 1994.   He correctly disregarded such evidence since it is obvious that said notices were authenticated even before the dates of the alleged infractions, that is, from March 26 to 28, 1994.

Petitioner explained that the date “3/5/94” actualy stands for May 3, 1994, as it is customary in European countries to write dates in numbers with the first digit representing the day and the second digit, the month.   In any case, the Philippine Consul General in Rotterdam would not have authenticated the documents if they were indeed anomalous or irregular.

On this point, it should be observed that the entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law, areprima facie evidence of the facts therein stated.  This means that such evidence  is satisfactory only if they are uncontradicted by contrary evidence.  In the case at bar, the employee refuted the authenticity of the notices of investigation and termination, presenting for his part photocopies of certain pages of the vessel’s logbook showing that there was, in fact, no record of the violations he was accused of.

Furthermore, the labor arbiter’s finding that “3/5/94” meant March 5, 1994, not May 3, 1994, is logical since the documents were authenticated by Philippine consular officials whose customary manner of writing dates in numbers is by making the first digit represent the month, the second digit the day, and the last digits the year.  Second, petitioner could have presented other evidence to support its allegation that the documents were indeed authenticated on May 3, 1994, but it did not.   It is a basic rule in evidence that each party must prove his affirmative allegation.[4] While technical rules are not strictly followed in the NLRC, this does not mean that the rules on proving allegations are entirely dispensed with.  Bare allegations are not enough; these must be supported by substantial evidence at the very least.

Petitioner further asserts that even assuming that Siojo was not afforded the opportunity to explain his side, his discharge was not thereby rendered illegal since there was just cause for his removal, that is, gross insubordination.   In support of this argument, petitioner relies on the ruling in Wenphil Corp. vs. NLRC[5], as reiterated in Cathedral School of Technology vs. NLRC,[6] where it was held that an employee who was dismissed for just cause but was not given an notice and hearing is not entitled to reinstatement and back wages.  In such case, the employer should be made to pay an indemnity for his failure to observe the requirements of due process.

The rule is well established that in termination cases, the burden of proving just and valid cause for dismissing an employee rests on the employer and his failure to do so shall result in a finding that the dismissal is unjustified. [7] In the present case, petitioner failed to prove by substantial evidence that Siojo indeed committed acts of insubordination which would warrant his dismissal.  Its reliance on Wenphil is, therefore, misplaced since in that case, there was just cause for the employees dismissal.

Article 277 of the Labor Code provides, inter alia:

“(a)  xxx           xxx         xxx"

"(b) Subject  to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with assistance  of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. xxx”

In particular, Rule XXIII , Book V of the Omnibus Rules Implementing the Labor Code states:

“Section 2.  Standards of due process:  requirements of notice. – In all cases of termination of employment, the following standards of due process shall be substantially observed:

I.         For termination of employment based on just causes as defined in Article  282 of the Code:

(a)            A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side;

(b)            A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and

(c)            A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

            xxx                                          xxx                                          xxx."

In sum, to effect a completely valid and unassailable dismissal, the employer must show not only sufficient ground therefore, but must also prove that procedural due process had been observed by giving the employee two notices. [8] In this, petitioner was remiss, hence, it should suffer the consequences.

WHEREFORE, premises considered, the instant petition is DISMISSED.  Accordingly, the decision of the labor arbiter dated June 21, 1996, and the resolution of the NLRC dated November 14, 1996, are hereby AFFIRMED with the MODIFICATION that petitioner is ordered to pay private respondent Siojo his salary for the entire unexpired portion of the employment contract, that is, one thousand twenty-four US dollars ($1,024.00) multiplied by seven months, for a total of seven thousand one hundred sixty-eight US dollars (US$7,168.00), or its equivalent in Philippine pesos plus interest and attorney’s fees.  No pronouncement as to costs.

Arsenio Lumiqued vs Apolonio Exevea et alon November 6, 2010

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Due Process – Assistance by CounselLumiqued was the Regional Director of DAR-CAR. He was charged by Zamudio, the Regional Cashier, for dishonesty due to questionable gas expenses under his office. It was alleged that he was falsifying gas receipts for reimbursements and that he had an unliquidated cash advance worth P116,000.00. Zamudio also complained that she was unjustly removed by Lumiqued two weeks after she filed the two complaints. The issue was referred to the DOJ. Committee hearings on the complaints were conducted on July 3 and 10, 1992, but Lumiqued was not assisted by counsel. On the second hearing date, he moved for its resetting to July 17, 1992, to enable him to employ the services of counsel. The committee granted the motion, but neither Lumiqued nor his counsel appeared on the date he himself had chosen, so the committee deemed the case submitted for resolution. The Investigating Committee recommended the dismissal  of Lumiqued. DOJ Sec Drilon adopted the recommendation. Fidel Ramos issued AO 52 dismissing Lumiqued.ISSUE: Does the due process clause encompass the right to be assisted by counsel during an administrative inquiry?

HELD: The SC ruled against Lumiqued. The right to counsel, which cannot be waived unless the waiver is in writing and in the presence of counsel, is a right afforded a suspect or an accused during custodial investigation. It is not an absolute right and may, thus, be invoked or rejected in a criminal proceeding and, with more reason, in an administrative inquiry. In the case at bar, petitioners invoke the right of an accused in criminal proceedings to have competent and independent counsel of his own choice. Lumiqued, however, was not accused of any crime in the proceedings below. The investigation conducted by the committee created by Department Order No. 145 was for the purpose of determining if he could be held administratively liable under the law for the complaints filed against him.   The right to counsel is not indispensable to due process unless required by the Constitution or the law.“. . . There is nothing in the Constitution that says that a party in a non-criminal proceeding is entitled to be represented by counsel and that, without such representation, he shall not be bound by such proceedings. The assistance of lawyers, while desirable, is not indispensable. The legal profession was not engrafted in the due process clause such that without the participation of its members, the safeguard is deemed ignored or violated. The ordinary citizen is not that helpless that he cannot validly act at all except only with a lawyer at his side.”

In administrative proceedings, the essence of due process is simply the opportunity to explain one’s side. Whatever irregularity attended the proceedings conducted by the committee was cured by Lumiqued’s appeal and his subsequent filing of motions for reconsideration. 

Read full text here. 

NOTES:EQUAL PROTECTIONEqual protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly discriminate against others.

Substantive equality is NOT enough, it is also required that the law be enforced and applied equally. Even if the law be fair and impartial on its face, it will still violate equal protection if it is administered “with an evil eye and uneven hand,’ so as to unjustly benefit some and prejudice others.The right to equal protection, basic as it is, sheltered by the Constitution is a restraint on all the three grand departments of the government and on the subordinate instrumentalities and subdivisions thereof, and on many constitutional powers, like the policepower, taxation and eminent domain.The equal protection clause exists to prevent undue favor or privilege. It is intended to eliminate discrimination and oppression based on inequality. Recognizing the existence of real differences among men, the equal protection clause does not demand absolute equality. It merely requires that all persons shall be treated alike, under like circumstances and conditions both as to the privileges conferred and liabilities enforced.  Thus, the equal protection clause does not absolutely forbid classifications.WHO ARE PROTECTEDEqual protection is available to all persons, natural as well as juridical. Artificial persons, however, are entitled to the protection only insofar as their property is concerned.

By constitutional reservation, certain rights are enjoyable only by citizens, such as the rights to vote, hold public office, exploit natural resources, and operate public utilities, although aliens are comprehended in the guaranty. Even ordinary statutes can validly distinguish between citizens and aliens or, for that matter, even between or among citizens only. 

 

EN BANC  JOSE L. ATIENZA, JR., MATIAS                   G.R. No. 188920V. DEFENSOR, JR., RODOLFO G.VALENCIA, DANILO E. SUAREZ,SOLOMON R. CHUNGALAO,SALVACION ZALDIVAR-PEREZ,HARLIN CAST-ABAYON, MELVIN G.MACUSI and ELEAZAR P. QUINTO,

Petitioners,                    Present:                                                        

                                                                     Puno, C.J.,        

                                                                     Carpio,

                                                                     Corona,   

  Carpio Morales,

                                                            Velasco, Jr.,

  Nachura,

- versus -                                             Leonardo-De Castro,

  Brion,

  Peralta,

  Bersamin,

  Del Castillo,

  Abad,

  Villarama, Jr.,

  Perez, and

  Mendoza, JJ.

COMMISSION ON ELECTIONS,

MANUEL A. ROXAS II,

FRANKLIN M. DRILON and Promulgated:

J.R. NEREUS O. ACOSTA,

Respondents.                   February 16, 2010   

x ---------------------------------------------------------------------------------------- x

 DECISION

ABAD, J.:

 

         

          This petition is an offshoot of two earlier cases already resolved by the Court involving a leadership dispute within a political party.  In this case, the petitioners question their expulsion from that party and assail the validity of the election of new party leaders conducted by the respondents.

   

Statement of the Facts and the Case

 

          For a better understanding of the controversy, a brief recall of the preceding events is in order.

 

On July 5, 2005 respondent Franklin M. Drilon (Drilon), as erstwhile president of the Liberal Party (LP), announced his party’s withdrawal of support for the administration of President Gloria Macapagal-Arroyo.  But petitioner Jose L. Atienza, Jr. (Atienza), LP Chairman, and a number of party members denounced Drilon’s move, claiming that he made the announcement without consulting his party.      

 

          On March 2, 2006 petitioner Atienza hosted a party conference to supposedly discuss local autonomy and party matters but, when convened, the assembly proceeded to declare all positions in the LP’s ruling body vacant and elected new officers, with Atienza as LP president.  Respondent Drilon immediately filed a petition[1] with the Commission on Elections (COMELEC) to nullify the elections. He claimed that  it  was  illegal considering that the party’s electing bodies,  the National Executive 

Council (NECO) and the National Political Council (NAPOLCO), were not properly convened.  Drilon also claimed that under the amended LP Constitution,[2] party officers were elected to a fixed three-year term that was yet to end on November 30, 2007.

 

          On the other hand, petitioner Atienza claimed that the majority of the LP’s NECO and NAPOLCO attended the March 2, 2006 assembly.  The election of new officers on that occasion could be likened to “people power,” wherein the LP majority removed   respondent   Drilon   as   president   by   direct   action.  Atienza   also   said   that   the   amendments[3] to   the   original   LP Constitution,   or   the   Salonga   Constitution,   giving   LP   officers   a   fixed   three-year   term,   had   not   been   properly   ratified. Consequently, the term of Drilon and the other officers already ended on July 24, 2006.

         

          On October 13, 2006, the COMELEC issued a resolution,[4] partially granting respondent Drilon’s petition.  It annulled the March 2, 2006 elections and ordered the holding of a new election under COMELEC supervision.  It held that the election of petitioner Atienza and the others with him was invalid since the electing assembly did not convene in accordance with the Salonga Constitution.  But, since the amendments to the Salonga Constitution had not been properly ratified, Drilon’s term may be deemed to have ended. Thus, he held the position of LP president in a holdover capacity until new officers were elected.

 

          Both sides of the dispute came to this Court to challenge the COMELEC rulings.  On April 17, 2007 a divided Court issued a   resolution,[5] granting respondent  Drilon’s  petition and denying   that  of  petitioner  Atienza.  The Court  held,   through the majority, that the COMELEC had jurisdiction over the intra-party leadership dispute; that the Salonga Constitution had been validly amended; and that, as a consequence, respondent Drilon’s term as LP president was to end only on November 30, 2007.

 

          Subsequently, the LP held a NECO meeting to elect new party leaders before respondent Drilon’s term expired.  Fifty-nine NECO members out of the 87 who were supposedly qualified to vote attended.  Before the election, however, several persons   associated  with   petitioner   Atienza   sought   to   clarify   their  membership   status   and   raised   issues   regarding   the composition of the NECO.  Eventually, that meeting installed respondent Manuel A. Roxas II (Roxas) as the new LP president.

 

          On January 11,  2008 petitioners Atienza,  Matias V. Defensor,  Jr.,  Rodolfo G.  Valencia,  Danilo E.  Suarez,  Solomon R. Chungalao,   Salvacion   Zaldivar-Perez,   Harlin   Cast-Abayon,  Melvin  G.  Macusi,   and   Eleazar   P.  Quinto,   filed   a   petition   for mandatory and prohibitory injunction[6] before the COMELEC against respondents Roxas, Drilon and J.R. Nereus O. Acosta, the party secretary general.  Atienza, et al. sought to enjoin Roxas from assuming the presidency of the LP, claiming that the NECO assembly which elected him was invalidly convened.  They questioned the existence of a quorum and claimed that the NECO composition ought to have been based on a list appearing in the party’s 60th Anniversary Souvenir Program.  Both Atienza and Drilon adopted that list as common exhibit in the earlier cases and it showed that the NECO had 103 members.

 

          Petitioners Atienza, et al.  also complained that Atienza, the incumbent party chairman, was not invited to the NECO meeting and that some members, like petitioner Defensor, were given the status of “guests” during the meeting.  Atienza’s allies   allegedly   raised   these   issues   but   respondent   Drilon   arbitrarily   thumbed   them   down   and   “railroaded”   the proceedings.  He suspended the meeting and moved it to another room, where Roxas was elected without notice to Atienza’s allies.

 

          On the other hand, respondents Roxas, et al. claimed that Roxas’ election as LP president faithfully complied with the provisions of the amended LP Constitution.  The party’s 60th Anniversary Souvenir Program could not be used for determining the NECO members because supervening events changed the body’s number and composition. Some NECO members had died, voluntarily resigned, or had gone on leave after accepting positions in the government.  Others had lost their re-election bid or did not run in the May 2007 elections, making them ineligible to serve as NECO members.  LP members who got elected to  public  office  also  became  part  of   the  NECO.  Certain  persons  of  national   stature  also  became NECO members  upon respondent Drilon’s nomination, a privilege granted the LP president under the amended LP Constitution. In other words, the NECO membership was not fixed or static; it changed due to supervening circumstances.

 

          Respondents  Roxas, et al.  also  claimed that   the party  deemed petitioners  Atienza,  Zaldivar-Perez,  and Cast-Abayon resigned for holding the illegal election of LP officers on March 2, 2006.  This was pursuant to a March 14, 2006 NAPOLCO resolution   that  NECO   subsequently   ratified.  Meanwhile,   certain  NECO  members,   like   petitioners Defensor,Valencia,   and Suarez, forfeited their party membership when they ran under other political parties during the May 2007 elections.  They were dropped from the roster of LP members.

 

          On June 18, 2009 the COMELEC issued the assailed resolution denying petitioners Atienza, et al.’s petition.  It noted that the May 2007 elections necessarily changed the composition of the NECO since the amended LP Constitution explicitly made incumbent senators, members of the House of Representatives, governors and mayors members of that body.  That some lost or won these positions in the May 2007 elections affected the NECO membership.  Petitioners failed to prove that the NECO which elected Roxas as LP president was not properly convened.

 

          As   for   the validity  of  petitioners  Atienza, et al.’s  expulsion as LP members,   the COMELEC observed that  this  was a membership issue that related to disciplinary action within the political party.  The COMELEC treated it as an internal party matter that was beyond its jurisdiction to resolve.

 

          Without filing a motion for  reconsideration of   the COMELEC resolution,  petitioners Atienza, et al.  filed this  petition for certiorari under Rule 65.

 

The Issues Presented

          Respondents Roxas, et al. raise the following threshold issues:

 

1.       Whether or not the LP, which was not impleaded in the case, is an indispensable party; and

 

2.       Whether or not petitioners Atienza, et al., as ousted LP members, have the requisite legal standing to question Roxas’ election.

 

Petitioners Atienza, et al., on the other hand, raise the following issues:

3.       Whether or not the COMELEC gravely abused its discretion when it upheld the NECO membership that elected respondent Roxas as LP president;

 

4.       Whether or not the COMELEC gravely abused its discretion when it resolved the issue concerning the validity of the NECO meeting without first resolving the issue concerning the expulsion of Atienza, et al. from the party; and

 

5.       Whether or not respondents Roxas, et al. violated petitioners Atienza, et al.’s constitutional right to due process by the latter’s expulsion from the party.

 

 

The Court’s Ruling

One.  Respondents Roxas, et al. assert that the Court should dismiss the petition for failure of petitioners Atienza, et al. to implead the LP as an indispensable party. Roxas, et al. point out that, since the petition seeks the issuance of a writ of mandatory injunction against the NECO, the controversy could not be adjudicated with finality without making the LP a party to the case.[7]

 

          But petitioners Atienza, et al.’s causes of action in this case consist in respondents Roxas, et al.’s disenfranchisement of Atienza, et al. from the election of party leaders and in the illegal election of Roxas as party president.  Atienza, et al. were supposedly excluded from the elections by a series of “despotic acts” of Roxas, et al., who controlled the proceedings.  Among 

these acts are Atienza, et al.’s expulsion from the party, their exclusion from the NECO, and respondent Drilon’s “railroading” of election proceedings. Atienza, et al. attributed all these illegal and prejudicial acts to Roxas, et al.  

 

Since no wrong had been imputed to the LP nor had some affirmative relief been sought from it, the LP is not an indispensable party.  Petitioners Atienza, et al.’s prayer for the undoing of respondents Roxas, et al.’s acts and the reconvening of the NECO are directed against Roxas, et al.

 

Two.  Respondents  Roxas, et al.  also  claim that  petitioners  Atienza, et al.  have no  legal   standing   to question the election of Roxas as LP president because they are no longer LP members, having been validly expelled from the party or having joined other political parties.[8]  As non-members, they have no stake in the outcome of the action.      

 

But,  as   the Court  held  in David v. Macapagal-Arroyo,[9] legal  standing  in  suits   is  governed by the “real  parties-in-interest” rule under Section 2, Rule 3 of the Rules of Court.  This states that “every action must be prosecuted or defended in the name of the real  party-in-interest.”  And “real  party-in-interest”   is  one who stands to be benefited or  injured by the judgment in the suit or the party entitled to the avails of the suit.  In other words, the plaintiff’s standing is based on his own right to the relief sought.  In raising petitioners Atienza, et al.’s lack of standing as a threshold issue, respondents Roxas, et al. would have the Court hypothetically assume the truth of the allegations in the petition.

 

Here, it is precisely petitioners Atienza, et al.’s allegations that respondents Roxas, et al. deprived them of their rights as LP members by summarily excluding them from the LP roster and not allowing them to take part in the election of its officers and that not all who sat in the NECO were in the correct list of NECO members.  If Atienza, et al.’s allegations were correct, they would have been irregularly expelled from the party and the election of officers, void.  Further, they would be entitled to recognition as members of good standing and to the holding of a new election of officers using the correct list of NECO members.  To  this  extent,   therefore,  Atienza, et al.  who want   to  take part   in  another  election would  stand to  be benefited or prejudiced by the Court’s decision in this case. Consequently, they have legal standing to pursue this petition.      

 

Three. In   assailing   respondent   Roxas’   election   as   LP   president,   petitioners   Atienza, et al.   claim   that   the  NECO members allowed to take part in that election should have been limited to those in the list of NECO members appearing in the party’s 60th Anniversary Souvenir Program. Atienza, et al. allege that respondent Drilon, as holdover LP president, adopted that list in the earlier cases before the COMELEC and it should thus bind respondents Roxas, et al.  The Court’s decision in the earlier cases, said Atienza, et al., anointed that list for the next party election.  Thus, Roxas, et al. in effect defied the Court’s ruling when they removed Atienza as party chairman and changed the NECO’s composition.[10]          

 

But the list of NECO members appearing in the party’s 60th Anniversary Souvenir Program was drawn before the May 2007 elections.  After the 2007 elections, changes in the NECO membership had to be redrawn to comply with what the amended LP Constitution required.  Respondent Drilon adopted the souvenir program as common exhibit in the earlier cases only to prove that the NECO, which supposedly elected Atienza as new LP president on March 2, 2006, had been improperly convened.  It cannot be regarded as an immutable list, given the nature and character of the NECO membership. 

 

Nothing in the Court’s resolution in the earlier cases implies that the NECO membership should be pegged to the party’s 60th Anniversary Souvenir Program.  There would have been no basis for such a position.  The amended LP Constitution did not intend the NECO membership to be permanent.  Its Section 27[11] provides that the NECO shall include all incumbent senators, members of the House of Representatives, governors, and mayors who were LP members in good standing for at least six months.  It follows from this that with the national and local elections taking place in May 2007, the number and composition of the NECO would have to yield to changes brought about by the elections. 

 

Former NECO members who lost the offices that entitled them to membership had to be dropped.  Newly elected ones who gained the privilege because of their offices had to come in.  Furthermore, former NECO members who passed away, resigned from the party, or went on leave could not be expected to remain part of the NECO that convened and held elections on November 26,  2007.  In addition,  Section 27 of  the amended LP Constitution expressly  authorized the party president to nominate “persons of national stature” to the NECO.  Thus, petitioners Atienza, et al. cannot validly object to the admission of 12 NECO members nominated by respondent Drilon when he was LP president. Even if  this  move could be regarded as respondents Roxas, et al.’s way of ensuring their election as party officers, there was certainly nothing irregular about the act under the amended LP Constitution.

 

          The NECO was validly convened in accordance with the amended LP Constitution.  Respondents Roxas, et al. explained in details how they arrived at the NECO composition for the purpose of electing the party leaders.[12]  The explanation is logical and   consistent  with   party   rules.  Consequently,   the   COMELEC   did   not   gravely   abuse   its   discretion  when   it   upheld   the composition of the NECO that elected Roxas as LP president. 

 

Petitioner Atienza claims that the Court’s resolution in the earlier cases recognized his right as party chairman with a term, like respondent Drilon, that would last up to November 30, 2007 and that, therefore, his ouster from that position violated the Court’s resolution.  But the Court’s resolution in the earlier cases did not preclude the party from disciplining Atienza under Sections 29[13] and 46[14] of the amended LP Constitution. The party could very well remove him or any officer for cause as it saw fit. 

 

Four.  Petitioners Atienza, et al. lament that the COMELEC selectively exercised its jurisdiction when it ruled on the composition of the NECO but refused to delve into the legality of their expulsion from the party.  The two issues, they said, weigh heavily on the leadership controversy involved in the case.  The previous rulings of the Court, they claim, categorically upheld the jurisdiction of the COMELEC over intra-party leadership disputes.[15]

 

          But, as respondents Roxas, et al. point out, the key issue in this case is not the validity of the expulsion of petitioners Atienza, et al. from the party, but the legitimacy of the NECO assembly that elected respondent Roxas as LP president.  Given the   COMELEC’s   finding   as   upheld   by   this   Court   that   the  membership   of   the  NECO   in   question   complied  with   the   LP Constitution, the resolution of the issue of whether or not the party validly expelled petitioners cannot affect the election of officers that the NECO held. 

 

          While petitioners Atienza, et al. claim that the majority of LP members belong to their faction, they did not specify who these members were and how their numbers could possibly affect the composition of the NECO and the outcome of  its election of party leaders.  Atienza, et al. has not bothered to assail the individual qualifications of the NECO members who voted for Roxas.  Nor did Atienza, et al. present proof that the NECO had no quorum when it then assembled.  In other words, the claims of Atienza, et al. were totally unsupported by evidence.

 

Consequently,  petitioners  Atienza, et al.   cannot   claim   that   their   expulsion   from   the  party   impacts  on   the  party leadership   issue or  on   the  election of   respondent  Roxas  as  president  so   that   it  was   indispensable   for   the  COMELEC  to adjudicate   such   claim.  Under   the   circumstances,   the   validity   or   invalidity   of   Atienza, et al.’s   expulsion   was   purely   a membership issue that had to be settled within the party.  It  is an internal party matter over which the COMELEC has no jurisdiction.    

          What is more, some of petitioner Atienza’s allies raised objections before the NECO assembly regarding the status of members from their faction.  Still, the NECO proceeded with the election, implying that its membership, whose composition has been upheld, voted out those objections. 

 

          The COMELEC’s jurisdiction over intra-party disputes is limited.  It does not have blanket authority to resolve any and all controversies involving political parties.  Political parties are generally free to conduct their activities without interference from the   state.  The   COMELEC  may   intervene   in   disputes   internal   to   a   party   only   when   necessary   to   the   discharge   of   its constitutional functions.

   

          The COMELEC’s jurisdiction over intra-party leadership disputes has already been settled by the Court.  The Court ruled in Kalaw v. Commission on Elections[16] that   the   COMELEC’s   powers   and   functions   under   Section   2,   Article   IX-C   of   the Constitution, “include the ascertainment of the identity of the political party and its  legitimate officers responsible for its acts.”  The Court also declared in another case[17] that the COMELEC’s power to register political parties necessarily involved the determination of the persons who must act on its  behalf.  Thus,  the COMELEC may resolve an intra-party  leadership dispute, in a proper case brought before it, as an incident of its power to register political parties.

 

          The validity of respondent Roxas’ election as LP president is a leadership issue that the COMELEC had to settle.  Under the amended LP Constitution, the LP president is the issuing authority for certificates of nomination of party candidates for all national elective positions. It is also the LP president who can authorize other LP officers to issue certificates of nomination for candidates to local elective posts.[18]  In simple terms, it is the LP president who certifies the official standard bearer of the party.

 

          The law also grants a registered political party certain rights and privileges that will redound to the benefit of its official candidates.  It   imposes,   too,   legal  obligations  upon  registered  political  parties   that  have   to  be  carried  out   through   their leaders.  The resolution of the leadership issue is thus particularly significant in ensuring the peaceful and orderly conduct of the elections.[19] 

 

Five.  Petitioners Atienza, et al. argue that their expulsion from the party is not a simple issue of party membership or discipline; it involves a violation of their constitutionally-protected right to due process of law.  They claim that the NAPOLCO and the NECO should have first summoned them to a hearing before summarily expelling them from the party.  According to Atienza, et al., proceedings on party discipline are the equivalent of administrative proceedings[20] and are, therefore, covered by the due process requirements laid down in Ang Tibay v. Court of Industrial Relations.[21]

 

But the requirements of administrative due process do not apply to the internal affairs of political parties.  The due process   standards   set   in Ang Tibay cover   only   administrative   bodies   created   by   the   state   and   through  which   certain governmental acts or functions are performed.  An administrative agency or instrumentality “contemplates an authority to which the state delegates governmental power for the performance of a state function.”[22]  The constitutional limitations that generally apply to the exercise of the state’s powers thus, apply too, to administrative bodies.

The constitutional limitations on the exercise of the state’s powers are found in Article III of the Constitution or the Bill of Rights.  The Bill of Rights, which guarantees against the taking of life, property, or liberty without due process under Section 1 is generally a limitation on the state’s powers in relation to the rights of its citizens.  The right to due process is meant to protect   ordinary   citizens   against   arbitrary   government   action,   but   not   from   acts   committed   by   private   individuals   or entities.  In the latter case, the specific statutes that provide reliefs from such private acts apply.  The right to due process guards against unwarranted encroachment by the state into the fundamental rights of its citizens and cannot be invoked in private controversies involving private parties.[23]

 

Although political parties play an important role in our democratic set-up as an intermediary between the state and its citizens, it is still a private organization, not a state instrument.  The discipline of members by a political party does not involve the right to life, liberty or property within the meaning of the due process clause. An individual has no vested right, as against the state, to be accepted or to prevent his removal by a political party. The only rights, if any, that party members may have, in relation to other party members, correspond to those that may have been freely agreed upon among themselves through their charter,  which  is a contract among the party members.  Members whose rights under their charter may have been violated have recourse to courts  of   law for  the enforcement of  those rights,  but not  as  a  due process  issue against  the government or any of its agencies.

 

          But even when recourse to courts of law may be made, courts will ordinarily not interfere in membership and disciplinary matters within a political party.  A political party is free to conduct its internal affairs, pursuant to its constitutionally-protected right to free association.  In Sinaca v. Mula,[24] the Court said that judicial restraint in internal party matters serves the public interest by allowing the political processes to operate without undue interference. It is also consistent with the state policy of allowing a free and open party system to evolve, according to the free choice of the people.[25]    

 

To conclude, the COMELEC did not gravely abuse its discretion when it upheld Roxas’ election as LP president but refused  to   rule  on   the validity  of  Atienza, et al.’s  expulsion   from the  party.  While   the  question of  party   leadership  has implications on the COMELEC’s performance of its functions under Section 2, Article IX-C of the Constitution, the same cannot be said of the issue pertaining to Atienza, et al.’s expulsion from the LP.  Such expulsion is for the moment an issue of party membership and discipline, in which the COMELEC cannot intervene, given the limited scope of its power over political parties.

 

WHEREFORE, the Court DISMISSES the petition and UPHOLDS the Resolution of the Commission on Elections dated June 18, 2009 in COMELEC Case SPP 08-001.