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[ G.R. No. 215314, March 14, 2018 ]




Time and again, the Court has put emphasis on the right of an employer to exercise its management prerogative in dealing with its company Is affairs, including the right to dismiss erring employees. It is a general principle of labor law to discourage interference with an employer's judgment in the conduct of his business. Even as the law is solicitous of the welfare of the employees, it also recognizes employers exercise of management prerogatives. As long as the company's exercise of judgment is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld.[1]

The Case

Challenged before the Court via this Petition for Review on Certiorari under Rule 45 of the Rules of Court is the Decision[2] of the Court of Appeals (CA) in CA G.R. SP No. 06906, promulgated on May 22, 2013, which affirmed the Decision[3] and Resolution[4] of the National Labor Relations Commission (NLRC) in NLRC Case No. V-000451-2002, dated October 28, 2011 and February 27, 2012, respectively. Likewise challenged is the subsequent Resolution[5] of the CA promulgated on October 29, 2014, which upheld the earlier decision.

The Antecedent Facts

The respondent Zuelo Apostol, now deceased and represented herein by his heirs, commenced his 20 years of employment with petitioner Central Azucarera de Bais (CAB) on March 1, 1982 when he was hired as the latter's Motor Pool Over-All Repairs Supervisor.[6] According to the petitioners, the respondent, as a supervisor, was in charge of repairing company vehicles, which necessarily included the responsibilities of (a) assigning the personnel and equipment for each and every repair job, and (b) taking custody of all repair equipment and materials owned by CAB.[7] Likewise, as a supervisor, one of the pre-requisites accorded to the respondent was the enjoyment of a company house where the respondent could live so long as he remains as a CAB employee.

On February 2, 2002, the parties' harmonious working relationship was disturbed when, during the inspection of Tomasito A. Rosel (Rosel), one of CAB's security guards, it was discovered that the respondent "was using his company house, as well as other company equipment to repair privately owned vehicles."[8] As reported by Rosel, he saw:
That the right side of the house was brightly lighted (sic) and the light came from an electrical line (trouble light with a 100W bulb) extension coming from the house. The lighting connection was hanging some distance from the house to the left side of the LANCER car, color white, which was parked after a pick-up vehicle, color black. The LANCER CAR was undergoing repairs on its left side. That Mr. Francisco Sabanal whom 1 personally know to be one of the regular workers of C.A.B. MOTOR POOL DEPARTMENT, hired as automotive mechanic, was the one actually doing the repair work on the LANCER CAR mentioned above. During the twenty minutes that I stayed in the premises of the house assigned to Mr. Apostol, I saw Mr. Sabanal cutting with scissors metal sheets from the sheets that were there at the place, to repair the LANCER CAR. He had with him on site, flattening tools and there was also an oxygen-acetylene outfit, which he also used.[9]
This then triggered the CAB management, through its resident manager, Roberty Y. Dela Rosa, to issue a memorandum addressed to the respondent for violating Rule 9 of CAB's Rules of Discipline, viz:
You will submit to this Office within 24 hours from receipt hereof your explanation in writing (to be placed on the space indicated at the bottom of the enclosed duplicate hereof) why you should not be subjected to our Rules of Discipline for the following acts:

For violating Rule 9 of the Rules of Discipline — for Utilizing material or equipment of the Company, including power for doing private work without permission. Inspection by Security has disclosed that you were having repairs done in CAB housing unit area assigned to you in Paper Village one car and one pick-up for body repairs using oxygen and acetylene tanks with cutting accessories as well as steel plates for the repairs, all of which are assumed to be company property there being no clearance or permit obtained form the Company to bring in personal equipment to undertake repairs in CAB village.

Bais Central, February 4, 2002

Note: While giving you a chance to explain your side, within 24 hours from receipt hereof, you are put on preventive suspension effective immediately.

Resident Manager[10]
In response, the respondent submitted a handwritten explanation in the local dialect, which when translated reads:
Dear Nonoy Steven,

First of all, I am asking for a thousand apologies because I undertook the repair of my personal vehicle without securing your permission.

Noy, I did not use electric welding, compressor and grinder. What I used was a trouble light and my personal acetylene and oxygen.

Noy, I am reiterating my asking for apology and excuse from you and I am really sorry that I have violated your rules.

Sincerely yours,
Sgd. Zuelo Apostol
On February 9, 2002, the respondent received a copy of the termination letter dated February 8, 2002, which was signed by CAB's president, herein petitioner Antonio Steven L. Tan.

Thereafter, the respondent vacated the company house assigned to him, and on February 12, 2002, filed a Complaint before the Sub-Regional Arbitration Branch No. VII of Dumaguete City against the petitioners for constructive dismissal, illegal suspension, unfair labor practice, underpayment of overtime pay, premium pay for holiday, separation pay, holiday pay, service incentive leave, vacation/sick leave, recovery of actual, moral, and exemplary damages, and attorney's fees.

The Ruling of the Labor Arbiter

On May 30, 2002, the Labor Arbiter dismissed the respondent's submissions on the following ratiocinations: (1) the allegations of unfair labor practice was not discussed in the respondent's position paper, let alone substantiated; (2) CAB was well within its rights to impose preventive suspension upon the respondent; (3) on the substantive aspect, CAB has reasonably shown that the complainant violated company rules for utilizing company-owned materials and equipment; and (4) on the procedural aspect, CAB complied with the twin requirements of notice.[12] Thus, the fallo of the decision states:
WHEREFORE, the complaint dated February 12, 2002 is dismissed for lack of merit.

The Ruling of the National Labor Relations Commission

Aggrieved, the respondent appealed the Labor Arbiter decision to the NLRC, which, after proper consideration, reversed the same. The NLRC ruled that: (1) the respondent should have been given the opportunity to be heard and to defend himself through a hearing;[14] (2) the respondent did not commit serious misconduct because his "contrite and remorseful explanation belies any willfulness and wrongful intent to violate the rules;"[15] and (3) while the respondent did indeed violate the company rules, the ultimate penalty of dismissal should not have been meted out to him.[16]

The dispositive portion of the NLRC decision reads:
WHEREFORE, PREMISES CONSIDERED, the decision of the Labor Arbiter is, hereby, SET ASIDE and VACATED and a new one entered finding [herein respondent] to have been illegally dismissed. [Herein petitioner] Central Azucarera de Bais is, hereby, ordered to pay complainant the following:

Separation Pay

The Ruling of the Court of Appeals

From the NLRC's reversal of the Labor Arbiter's decision, the petitioners elevated the case to the CA, which later on denied the petition and affirmed the NLRC decision. The CA averred that, while CAB was compliant with the twin notice requirement, the respondent's violation "cannot be considered as so grave as to be characterized either as serious misconduct or could lead to a loss of trust and confidence."[18] Thus, the CA concluded:
WHEREFORE, in view of the foregoing premises, the Petition for Certiorari is DENIED. The NLRC's Decision dated October 28. 2011 and its Resolution dated February 27, 2012, respectively, are hereby AFFIRMED. Costs on petitioners.

The Issues

After the CA's denial of the petitioners' motion for reconsideration, the latter now comes before the Court seeking the reversal of the assailed CA decision and resolution on the following grounds:


In sum, the petitioners put forth the following issues for the resolution of the Court: (1) whether or not procedural and substantive due process was observed in the termination of the respondent's employment with CAB; (2) whether or not the penalty meted out was commensurate to the violation; and consequently, (3) whether or not the respondent is entitled to the payment of backwages and separation pay.

The Court's Ruling

After a careful perusal of the arguments presented and the evidence submitted, the Court finds merit in the petition.

The general rule is that only questions of law are revievvable by the Court. This is because it is not a trier of facts;[21] it is not duty-bound to analyze, review, and weigh the evidence all over again in the absence of any showing of any arbitrariness, capriciousness, or palpable error.[22] Thus, factual findings of administrative or quasi-judicial bodies, including labor tribunals, are accorded much respect by the Court as they are specialized to rule on matters falling within their jurisdiction especially when these are supported by substantial evidence.[23] In labor cases, this doctrine applies with greater force as questions of fact presented therein are for the labor tribunals to resolve.[24]

The Court, however, permitted a relaxation of this rule whenever any of the following circumstances is present:
(1) [W]hen the findings are grounded entirely on speculations, surmises or conjectures;

(2) when the inference made is manifestly mistaken, absurd or impossible;

(3) when there is grave abuse of discretion;

(4) when the judgment is based on a misapprehension of facts;

(5) when the findings of fact are conflicting;

(6) when in making its findings, the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee;

(7) when the findings are contrary to that of the trial court;

(8) when the findings are conclusions without citation of specific evidence on which they are based;

(9) when the facts set forth in the petition, as well as in the petitioner's main and reply briefs, are not disputed by the respondent;

(10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or

(11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.[25]
Thus, in instances when the Labor Arbiter, the NLRC, and the CA made conflicting findings of fact, the Court is justified—nay, the Court is compelled—to issue its own determination.

The case at hand calls for the resolution of several issues concerning the factual determination of the court a quo.

First, on the matter of procedural due process, the Labor Arbiter and the CA were one in asseverating that CAB complied with the procedure required of it by the Labor Code, its implementing rules and regulations, and relevant jurisprudence. According to the Labor Arbiter,
[T]he documents which are admitted by both parties clearly show that CAB complied with the twin requirements of due process by furnishing the [respondent] two written notices: first, a notice apprising the complainant of the particular acts for which his dismissal is sought xxx and second, a subsequent notice informing the complainant of the decision to dismiss him.[26] (Emphasis and underscoring supplied)
Likewise, the CA was categorical when it asserted that CAB complied with the twin notice requirement. It said:
Here, the twin notice requirement was substantially complied with by the petitioners. It is undisputed that Apostol received two notices. The first notice informed him of his violation and required him to submit his written explanation on the matter. Thereafter, he received another notice communicating to him that his employment with CAB was being severed by the company due to his violation of its company's Rules of Discipline.[27] (Emphasis and underscoring supplied)
On the other hand, and contrary to the findings of both the Labor Arbiter and the CA, the NLRC found that procedural due process was not properly observed when CAB terminated the respondent. In ruling thus, the NLRC emphasized that, while there were actually two notices sent to the respondent, the lack of actual hearing on the violations of the latter prior to his termination constituted a ground by which the dismissal should be reversed. Thus,
[W]hile as a general rule a hearing is not required to satisfy the demands of procedural due process, we feel that the circumstances of this case required that a hearing should have been conducted to determine the ownership of the materials and equipment used. That to us is vital in determining the gravity of [respondent's] violation. That would have been more in accord with the employer's duty "to afford the worker ample opportunity to be heard and defend himself with the assistance of his representative if he so desires, in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment."[28] (Emphasis and underscoring supplied)
In the backdrop of this contradiction among the decisions, the Court is of the opinion that the Labor Arbiter and the CA's findings are more in accord with established jurisprudence. The rights of the respondent to procedural due process was observed by CAB.

As early as 2009, in the case of Perez vs. Philippine Telegraph and Telephone Company,[29] the Court has already laid down the guidelines in complying with the proper procedure in instances when termination of employees is called for. In reconciling the Labor Code and its Implementing Rules and Regulations, and in concluding that actual or formal hearing is not an absolute requirement, the Court interpreted and directed that:
The test for the fair procedure guaranteed under Article 277(b) [now, Article 292(b)] cannot be whether there has been a formal pretermination confrontation between the employer and the employee. The "ample opportunity to be heard" standard is neither synonymous nor similar to a formal hearing. To confine the employee's right to be heard to a solitary form narrows down that right. It deprives him of other equally effective forms of adducing evidence in his defense. Certainly, such an exclusivist and absolutist interpretation is overly restrictive. The "very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation."

x x x x

An employee's right to be heard in termination cases under Article 277(b) [now, Article 292(b)] as implemented by Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code should be interpreted in broad strokes. It is satisfied not only by a formal face to face confrontation but by any meaningful opportunity to controvert the charges against him and to submit evidence in support thereof.[30] (Emphasis and underscoring supplied)
Thus, in Perez, the Court formulated the following guiding principles in connection with the hearing requirement in dismissal cases:
(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way.

(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.

(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference" requirement in the implementing rules and regulations.[31] (Emphasis and underscoring supplied)
In the present case, the petitioners furnished the respondent with two notices: one, the memorandum dated February 4, 2002 issued by CAB's resident manager[32] which informed the respondent of the charges against him; and two, the letter of termination which, this time, notified the respondent of CAB's decision to dismiss him.[33] In the interim, CAB, through the memorandum issued by its resident manager, sought the respondent's explanation on the incident.

The confluence of these facts, in the Court's opinion, sufficiently complies with the respondent's right to be accorded ample opportunity to be heard.

Second, on the matter of substantive due process, the Court accedes to the uniform findings of the Labor Arbiter, NLRC, and CA that the respondent did indeed violate company rules and regulations when he used company equipment and materials for his personal vehicles. According to the records of this case, this much is undisputed.

In ruling this way, the Labor Arbiter averred that "'the [respondent] violated CAB's company rules for utilizing material or equipment of the company as well as the housing unit assigned to him in an improper manner, i.e., for the repair of privately owned vehicles to the expense and damage of the company."[34] The NLRC itself affirmed this finding by categorically saying that "it is not disputed that the complainant did violate the company rules."[35] More, interspersed in the CA decision are statements revealing this violation by the respondent. Hence, the certainty by which the Labor Arbiter, NLRC, and CA pronounced this fact requires no further disturbance—not even by the Court.

What is disputed, however, which the Court must rule upon, concerns the crux of the current controversy: whether or not the respondent's act, which is violative of CAB's rules and regulations, warrants the imposition of the ultimate penalty of dismissal. In this regard, the Court scoured once again the records of the case, and after a judicious study thereof, favors the submission of the petitioners.

Article 297(c) [formerly Article 282(c)] of the Labor Code provides that an employer may terminate the services of an employee for fraud or willful breach of the trust reposed in him.[36] According to the case of Top Form Mfg. Co., Inc. vs. NLRC,[37] an employer has a distinct prerogative to dismiss an employee if the former has ample reason to distrust the latter or if there is sufficient evidence to show that the employee has been guilty of breach of trust. This authority of the employer to dismiss an employee cannot be denied whenever acts of violation are noted by the employer.[38]

In ruling that employers have a right to impose a penalty of dismissal on supervisors or personnel occupying positions of responsibility on the basis of loss of trust and confidence, the case of Moya vs. First Solid Rubber Industries, Inc.[39] stated thus:
Following the ruling in The Coca-Cola Export Corporation v. Gacayan, the employers have a right to impose a penalty of dismissal on employees by reason of loss of trust and confidence. More so, in the case of supervisors or personnel occupying positions of responsibility, loss of trust, justifies termination of employment. Loss of confidence as a just cause for termination of employment is premised on the fact that an employee concerned holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employer's property.[40] (Emphasis and underscoring supplied, citations omitted)
This discourse is further clarified in the recent case of Alaska Milk Corporation, and the Estate of Wilfred Uytengsu vs. Ernesto L. Ponce[41] where the Court ruled that, in order to invoke this cause, certain requirements must be complied with, namely: (1) the employee concerned must be holding a position of trust and confidence; and (2) there must be an act that would justify the loss of trust and confidence.[42] In addition to these, the case of Juliet B. Sta. Ana vs. Manila Jockey Club, Inc.[43] included, as a requirement, that such loss of trust relates to the employee's performance of duties.

In the case at hand, a perusal of the entirety of the records would reveal that all the requirements for the valid dismissal of the respondent exist.

To begin with, there is no doubt that the respondent, as CAB's motor pool over-all repairs supervisor, is in a position of trust and confidence. He was in charge of repairing company vehicles, and was designated with the responsibility of (a) assigning the personnel and equipment for each and every repair job, and (b) taking custody of all repair equipment and materials owned by CAB.[44] In the language of Moya, the respondent herein occupies a position of responsibility, where he is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of CAB's properties.

Secondly, the respondent's violation of CAB's rules and regulations relating to the use of company property for personal purposes was consistently held and upheld not only by the Labor Arbiter and the NLRC, respectively, but also by the CA itself. That the respondent committed this act could not be denied. What's more is that the respondent himself admitted to it.[45]

Finally, the respondent's action was successfully conducted precisely because of his position in the company. As CAB's motor pool over-all repairs supervisor, he was in the position to effect the repairs of his personal property in the company house which was assigned to him. It could not be emphasized further that this violation of company rules—from a supervisor no less—carries with it an impact to the operations and management of a company, and a company's decision to terminate an employee for these purposes is a decision that should be respected.

To be sure, the petitioners herein validly dismissed their erring employee.

Having thus ruled on the validity of the dismissal of the respondent, then it necessarily follows that he is not entitled to both backwages and separation pay.

The Court has reiterated that the policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.[46]

WHEREFORE, premises considered, the Decision of the Court of Appeals in CA G.R. SP No. 06906, dated May 22, 2013 and the subsequent Resolution dated October 29, 2014, as well as the Decision and Resolution of the National Labor Relations Commission in NLRC Case No. V-000451-2002, dated October 28, 2011 and February 27, 2012 respectively, are hereby REVERSED and SET ASIDE. The Decision of the Labor Arbiter dated May 30, 2002 in SUB-RAB- VII-02-003 9-2002-D is hereby REINSTATED.


Carpio,* Acting C. J., (Chairperson), Peralta, Perlas-Bernabe, and Caguioa, JJ., concur.

* Acting Chief Justice per Special Order No. 2539, dated February 28, 2018.

[1] Philippine Auto Components, Inc. v. Ronnie B. Jumadla, et al., GR. No. 218980, November 28, 2016. & Ronnie B. Jumadla, et al., v. Philippine Auto Components, Inc., G.R. No. 219124, November 28, 2016.

[2] Penned by Associate Justice Ramon Paul L. Hernando, and concurred in by Associate Justices Carmelita Salandanan-Manahan and Ma. Luisa Quijano- Padilla; rollo, pp. 59-70.

[3] Id. at 191-198.

[4] Id. at 214-215

[5] Id. at 72-73.

[6] Id. at 11.

[7] Id.

[8] Id. at 12.

[9] Id. at 112.

[10] Id. at 113.

[11] Id. at 113, 123.

[12] Id. at 124-125.

[13] Id. at 126.

[14] Id. at 194-196.

[15] Id. at 196.

[16] Id. at 196-197.

[17] Id. at 198.

[18] Id. at 63.

[19] Id. at 69.

[20] Id. at 20.

[21] Manotok Really, Inc. v. CLT Realty Development Corp., 512 Phil. 679, 706 (2005), as cited in Van Clifford Torres y Salera v. People of the Philippines, G.R. No. 206627, January 18, 2017.

[22] Fuentes v. Court of Appeals, 335 Phil. 1163, 1168 (1997); Bautista v. Puyat, 416 Phil. 305, 308 (2001), as cited in Van Clifford Torres y Salera v. People of the Philippines, G.R. No. 206627, January 18, 2017.

[23] Lamberto M. De Leon v. Maunlad Trans, Inc., Seachest Associates, et al., G.R. No. 215293. February 8, 2017.

[24] Id.

[25] Id.

[26] Rollo, p. 125.

[27] Id. at 66.

[28] Id. at 196.

[29] 602 Phil. 522, 538 (2009).

[30] Id.

[31] Id.

[32] Rollo, p. 113.

[33] Id. at 114-115.

[34] Id. at 124.

[35] Id. at 196.

[36] ART. 297. [282] Termination by Employer. - An employer may terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and

(e) Other causes analogous to the lbtegoing.

[37] 290-A Phil. 63,67-68(1992).

[38] Id.; See also Moya v. First Solid Rubber Industries, Inc., 718 Phil. 77, 87, (2013), Radio Philippines Network, Inc. v. Yap, 692 Phil. 288, 304-305 (2012) citing Association of Integrated Security Force of Bislig (AISFB)-ALU v. Court of Appeals, 505 Phil. 10, 25 (2005), San Miguel Corporation v. Layoc, Jr., 562 Phil. 670, 687 (2007), citing San Miguel Brewery Sales Force Union (PTCWO) v. Hon. Ople, 252 Phil. 27, 31 (1989).

[39] 718 Phil. 77, 87 (2013).

[40] Id.

[41] G.R. No. 228412, July 26, 2017.

[42] Supra.

[43] G.R. No. 208459, February 15, 2017.

[44] Rollo, p. 11.

[45] Id. at 113, 123.

[46] Maya v. First Solid Rubber Industries, Inc., supra, note 39, at 89, citing Unilever Philippines. Inc. v. Rivera, 710 Phil. 124, 133 (2013), Philippine Law Distance Telephone Co. v. NLRC, 247 Phil. 641, 650 (1988), Toyota Motor Phils. Corp. Workers Association v. NLRC, 562 Phil. 759, 810-811 (2002).

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