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679 Phil. 97


[ G.R. No. 190436, January 16, 2012 ]




Before us is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure which assails the Decision[1] dated August 10, 2009 and Resolution[2] dated November 26, 2009 of the Court of Appeals (CA) in the case docketed as CA-G.R. SP No. 96789, entitled “Manila Electric Company (Meralco) and Manuel M. Lopez v. Norman Yabut and National Labor Relations Commission.”

The Facts

This case stems from a complaint for illegal dismissal and monetary claims filed by herein petitioner Norman Yabut (Yabut) against respondents Manila Electric Company (Meralco) and Meralco officer Manuel M. Lopez (Lopez).

The petitioner had worked with Meralco from February 1989 until his dismissal from employment on February 5, 2004. At the time of said dismissal, he was assigned at the Meralco Malabon Branch Office as a Branch Field Representative tasked, among other things, to conduct surveys on service applications, test electric meters, investigate consumer-applicants' records of Violations of Contract (VOC) and perform such other duties and functions as may be required by his superior.

The circumstances antecedent to his dismissal are as follows:

On October 4, 2003, Meralco's Inspection Office issued a memorandum[3] addressed to Meralco's Investigation-Legal Office, informing it of an illegal service connection at the petitioner's residence, particularly at No. 17 Earth Street, Meralco Village 8, Batia, Bocaue, Bulacan. The Inspection Office claimed discovering shunting wires installed on the meter base for Service Identification Number (SIN) 708668501, registered under petitioner Yabut's name. These wires allegedly allowed power transmission to the petitioner's residence despite the fact that Meralco had earlier disconnected his electrical service due to his failure to pay his electric bills.

Given this report, Meralco's Head of Investigation-Litigation Office issued to the petitioner a notice[4] dated November 3, 2003, received by the petitioner's wife on the same day and with pertinent portions that read:

Please report to our Mr. Rodolfo C. Serra of the Investigation-Litigation at 8th Floor, Lopez Building, Meralco Center, Ortigas Avenue, Pasig City on November 11, 2003, at 9:00 a.m. as the Inspection had found your disconnected electric service with SIN No. 708668501 directly connected by a shunting wire to energize your empty meter base.  If proven true, such act constitutes dishonesty in violation of Section 7 (3) of the Company Code on Employee Discipline and/or serious misconduct or an act analogous to fraud or commission of a crime under Article 282 (a) and (e) of the Labor Code of the Philippines.

In this investigation, you are entitled to be assisted by a counsel or an authorized union representative.  You are also allowed to present evidence and material witnesses to testify in your favor.

Should you fail to appear on the aforementioned date, we shall take it to mean that you are waiving your right to present your side and refute the aforesaid charge and evidence against you.  If you appear alone, we shall take it to mean that you are waiving your right to be represented by such counsel or union representative.[5]

The offense under Section 7 (3) of Meralco's Company Code on Employee Discipline referred to in the aforequoted notice is with penalty of dismissal on the first offense and is defined as follows:

SECTION 7Dishonesty.

The following acts shall constitute violation of this Section:

x x x x

3) Directly or indirectly tampering with electric meters or metering installations of the Company or the installation of any device, with the purpose of defrauding the Company.

x x x x[6]

In the course of the company's investigations, the petitioner presented his sworn statement[7] which was executed with the assistance of Jose Tullo, the Chief Steward and Vice President of Meralco's supervisory union First Line Association of Meralco Supervisory Employees (FLAMES). Yabut admitted being the registered customer of Meralco at No. 17 Earth Street, Meralco Village 8, Batia, Bocaue, Bulacan. The petitioner claimed that his electrical service was disconnected sometime in July 2003 for unpaid electric bills. On October 3, 2003, between 10:00 o'clock and 10:30 o'clock in the morning, he was informed by his wife that Meralco discovered shunting wires on their meter base during an inspection. The petitioner nonetheless claimed that at about 8:00 o'clock in the morning of the same day, prior to his wife's notice upon him of the inspection, he had already given to an officemate the amount of P8,432.35 and requested  that the same be paid to Meralco to cover his outstanding electric bills. The amount of P8,432.35 plus P1,540 as service deposit was then paid for the petitioner's account on October 3, 2003 at about 9:30 o'clock in the morning.

Yabut denied knowing the person who installed the discovered shunting wires.  While he did not always go home to their house in Bulacan as there were times when he stayed in his sister's residence in Malabon, the petitioner confirmed that he was regularly in his Bulacan house. His residence had electricity even prior to the full settlement of his outstanding bills through a connection made to the line of his neighbor Jojo Clemente.

Photographs taken during Meralco's inspection of Yabut's residence were also presented to and identified by Yabut. He confirmed that the inspected meter base was installed within his lot's premises. Claiming that he had been obtaining electricity from a neighbor, he argued that shunting wires in his meter base could have caused an electrical malfunction. As to Meralco's allegation that Yabut's wife had admitted the petitioner's authorship of the illegal connection, Yabut denied knowing of such admission.

Meralco’s Litigation – Investigation Office summarized the results of Meralco's findings in a memorandum[8] dated December 30, 2003. It indicated that Yabut’s electric service was disconnected on April 3, 2003 for account delinquency. Notwithstanding the disconnection and the fact that Meralco’s service had not been reconnected, Yabut's meter registered electric consumption. The memorandum included the following findings:

While Yabut denied responsibility about the illegal connection, the pictures taken specifically showing the shunted wires on the meter base and his wife's admission that he was the one responsible are sufficient proofs of his guilt. We give credit to the admission of his wife as she did it with spontaneity without force or intimidation in our part. His alibi that he seldom stayed in his house is controverted by his admission that within the period in question from July to October 3, 2003, he stayed home for 24 times. It is surprising that, being a field representative who has knowledge about illegal connection, it escaped from his attention the said illegal connection when it could easily be detected since his metering point is installed in front of his house.

We are not inclined to believe that he resorted to flying connection as it is apparent that at the time his electric service was disconnected in April, 2003, the Balagtas Branch found his service to have registered KWHR consumption from 1555 to 2194 for a total of 639 KWHR indicating that although his electric service was disconnected, it continued to register electricity. Moreover, the burden of proof is upon him to present to us the one responsible but he failed to do so. In the absence of such proof, it is concluded that he, being the registered customer and a resident, was the one who installed the illegal connection purposely to alleviate the sickly condition of his wife and two children.[9]

In view of these findings, respondent Meralco, through its Senior Assistant Vice President for Human Resources Administration R. A. Sapitula, issued on February 4, 2004 a notice of dismissal[10] addressed to the petitioner. The notice cites violation of Section 7, paragraph 3 of Meralco's Company Code on Employee Discipline and Article 282 (a), (c), (d) and (e) of the Labor Code of the Philippines as bases for the dismissal. The pertinent portions of the notice read:

Administrative investigation duly conducted by Legal established that on October 3, 2003, acting on a tip that you are resorting to illegal service connection, the Company's Inspection Squad 7 team found two (2) shunting wires in an energized empty meter base installed at your residence at #17 Earth Street, Meralco Village, Batia, Bocaue, Bulacan. Your wife admitted that you were the one who installed the shunted wires on your meter base to have power because she and your two children were sick. The illegal connection enabled you to defraud the company by consuming unregistered electricity which makes you liable for violation of Section 7, par. 3 of the Company Code on Employee Discipline, defined as “(d)irectly or indirectly tampering with electric meters or metering installations of the Company or the installation of any device, with the purpose of defrauding the Company,” penalized therein with dismissal from the service.

Under Article 282 of the Labor Code of the Philippines, the termination of your employment in Meralco is justified on the following grounds: “(a) Serious misconduct x x x by the employee x x x in connection with his work; “(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or representative; “(d) Commission of a crime or offense by the employee against x x x his employer; and “(e) Other causes analogous to the foregoing.”

Based on the foregoing, Management is constrained to dismiss you for cause from the service and employ of the Company, as you are hereby so dismissed effective February 5, 2004, with forfeiture of all rights and privileges.

Aggrieved by the decision of the management, Yabut filed with the National Labor Relations Commission (NLRC) a complaint[11] for illegal dismissal and money claims against Meralco and Lopez.

The Ruling of the Labor Arbiter

On December 28, 2004, Labor Arbiter Antonio R. Macam rendered his Decision,[12] declaring the petitioner illegally dismissed from the service and hence, entitled to reinstatement plus backwages and attorney's fees. The dispositive portion of his decision reads:

WHEREFORE, premises all considered, judgment is hereby rendered, as follows:
  1. Declaring the dismissal of complainant as illegal;
  2. Ordering respondents to reinstate complainant to his former position without loss of seniority rights and privileges, immediately upon receipt of this decision, either physically or in the payroll, at the option of the respondent;
  3. Ordering the respondents to pay complainant his full  backwages from date of dismissal up to actual   reinstatement, partially computed as follows:

    Backwages   =   [P]240,420.00
    13th Mo. Pay =        24,042.00
                 Total    [P]264,462.00

  4. Ordering respondents to pay complainant attorney's  fees equivalent to 10% of his monetary award.

All other claims are dismissed for lack of merit.


The labor arbiter observed that there was no clear and direct evidence to prove that Yabut performed the shunting of his metering installation.  Furthermore, the act imputed upon Yabut was not related to the performance of his duties as a Meralco employee, but as a customer of the company's electric business. Finally, it was ruled that Meralco failed to observe the twin requirements of due process in termination cases. The records are bereft of any evidence showing that the petitioner was apprised of the particular acts or omissions for which his dismissal was then sought.

Unsatisfied, the respondents appealed from the decision of the labor arbiter to the NLRC.[14]

The Ruling of the NLRC

On March 31, 2006, the NLRC rendered its Resolution[15] dismissing the herein respondents' appeal for lack of merit. Subsequently, the NLRC denied for lack of merit the respondents’ motion for reconsideration via a Resolution[16] dated August 28, 2006. This prompted the respondents to file a petition for certiorari with the CA.

The Ruling of the CA 

On August 10, 2009, the CA rendered the now assailed Decision[17] reversing the rulings of the NLRC. In finding the petitioner's dismissal lawful, the appellate court attributed unto Yabut authorship of the meter tampering and illegal use of electricity – acts which it regarded as serious misconduct. The Court observed:

The Court notes that the meter base is located inside respondent Yabut's premises. Manila Electric Company vs. Court of Appeals said –

“x x x Metro Concast should bear the responsibility for the tampering of the facilities within its compound, which was totally under its supervision and control. Being within its control, any resultant breach in the integrity of the equipment is indeed attributable to it.”[18] (citation omitted)

The court also ruled that the petitioner's right to due process was not violated, as he was served the required notices and given sufficient opportunity to be heard. In view of these, the CA annulled and set aside the NLRC's resolutions via its decision, the dispositive portion of which reads:

WHEREFORE, the petition is granted.  The resolutions dated March 31, 2006 and August 28, 2006 are annulled and set aside.


Yabut's motion for reconsideration was denied by the CA via a Resolution dated November 26, 2009.[20] Hence, the present petition.

The Issue

The issue for this Court's determination is: Whether or not the CA committed an error of law in annulling and setting aside the resolutions of the NLRC that declared the herein petitioner illegally dismissed by the respondents.

The petitioner asserts that he was dismissed from employment without a valid cause, and that due process prior to his termination was not observed by the respondents.

This Court's Ruling

After study, this Court finds the petition devoid of merit.

The dismissal of the petitioner was
founded on just causes under Article
282 of the Labor Code of the Philippines.

Article 279 of the Labor Code of the Philippines provides that “(i)n cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. x x x” The just causes are enumerated in Article 282, which provides:

Article 282. Termination by employer. -  An employer may terminate an employment for any of the following causes:

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

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

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

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

(e) Other causes analogous to the foregoing.

The requirement for a just cause was satisfied in this case. We note that the petitioner's employment was terminated by the herein respondents for violation of Section 7, par. 3 of Meralco's Company Code on Employee Discipline, and for the existence of just cause under Article 282 (a), (c), (d) and (e) of the Labor Code.

The petitioner's violation of the company rules was evident. While he denies any involvement in the installation of the shunting wires which Meralco discovered, it is significant that said SIN 708668501 is registered under his name, and its meter base is situated within the premises of his property. Said meter registered electric consumption during the time his electric service was officially disconnected by Meralco. It was the petitioner and his family who could have benefited from the illegal connection, being the residents of the area covered by the service. His claim that he failed to know or even notice the shunted wires fails to persuade as we consider the meter located in the front of his house, the nature of his work as branch field representative, his long-time employment with Meralco and his familiarity with illegal connections of this kind.

The logical conclusion that may be deduced from these attending circumstances is that the petitioner was a party, or at the very least, one who agreed to the installation of the shunted wires, and who also benefited from the illegal connection at the expense of his employer-company. In sustaining the CA's findings, we consider the rule that in administrative and quasi-judicial proceedings, as in proceedings before the NLRC which had original jurisdiction over the complaint for illegal dismissal, the quantum of proof necessary is substantial evidence or such relevant evidence as a reasonable mind may accept as adequate to support a conclusion.[21]

Significantly, “(t)ampering with electric meters or metering installations of the Company or the installation of any device, with the purpose of defrauding the Company” is classified as an act of dishonesty from Meralco employees, expressly prohibited under company rules. It is reasonable that its commission is classified as a severe act of dishonesty, punishable by dismissal even on its first commission, given the nature and gravity of the offense and the fact that it is a grave wrong directed against their employer.

To reiterate, Article 282 (a) provides that an employer may terminate an employment because of an employee's serious misconduct, a cause that was present in this case in view of the petitioner's violation of his employer's code of conduct. Misconduct is defined as the “transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.” For serious misconduct to justify dismissal, the following requisites must be present: (a) it must be serious; (b) it must relate to the performance of the employee's duties; and (c) it must show that the employee has become unfit to continue working for the employer.[22]

In reviewing the CA’s Decision, we again consider the petitioner's duties and powers as a Meralco employee. And we conclude that he committed a serious misconduct. Installation of shunting wires is without doubt a serious wrong as it demonstrates an act that is willful or deliberate, pursued solely to wrongfully obtain electric power through unlawful means. The act clearly relates to the petitioner's performance of his duties given his position as branch field representative who is equipped with knowledge on meter operations, and who has the duty to test electric meters and handle customers' violations of contract. Instead of protecting the company’s interest, the petitioner himself used his knowledge to illegally obtain electric power from Meralco. His involvement in this incident deems him no longer fit to continue performing his functions for respondent-company.

While the installation of the shunted wires benefited the herein petitioner as a customer of Meralco, his act cannot be fully severed from his status as the respondent's employee. As correctly observed by the CA, “(i)t is an offense against the Company Code of Employee Discipline. As a field representative, he is knowledgeable on the mechanics of meter and metering installation.”[23]

The dismissal is also justified as the act imputed upon the petitioner qualifies as “fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative” under Article 282 (c) of the Labor Code. While the petitioner contests this ground by denying that his position is one of trust and confidence, it is undisputed that at the time of his dismissal, he was holding a supervisory position after he rose from the ranks since commencement of his employment with Meralco. As a supervisor with duty and power that included testing of service meters and investigation of violations of contract of customers, his position can be treated as one of trust and confidence, requiring a high degree of honesty as compared with ordinary rank-and-file employees. This Court declared in The Coca-Cola Export Corporation v. Gacayan:[24]

Law and jurisprudence have long recognized the right of employers to dismiss 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. Loss of confidence as a just cause for termination of employment is premised from 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. But, in order to constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer.[25] (citations omitted)

In this case, the acts complained of were clearly work-related because they related to matters the petitioner handled as branch field representative.  Taking into account the results of its investigations, Meralco cannot be expected to trust Yabut to properly perform his functions and to meet the demands of his job. His dishonesty, involvement in theft and tampering of electric meters clearly prejudice respondent Meralco, since he failed to perform the duties which he was expected to perform.

Considering the foregoing, this Court agrees that there were just causes for the petitioner's dismissal. We emphasize that dismissal of a dishonest employee is to the best interest not only of the management but also of labor. As a measure of self-protection against acts inimical to its interest, a company has the right to dismiss its erring employees. An employer cannot be compelled to continue employing an employee guilty of acts inimical to the employer’s interest, justifying loss of confidence in him.[26]

The requirements of procedural
due process were satisfied.

On the matter of procedural due process, it is well-settled that notice and hearing constitute the essential elements of due process in the dismissal of employees. The employer must furnish the employee with two written notices before termination of employment can be legally effected. The first apprises the employee of the particular acts or omissions for which dismissal is sought. The second informs the employee of the employer's decision to dismiss him.  With regard to the requirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held.[27]

These requirements were satisfied in this case. The first required notice was dated November 3, 2003, sufficiently notifying the petitioner of the particular acts being imputed against him, as well as the applicable law and the company rules considered to have been violated. Notably, in his sworn statement dated November 17, 2003, the petitioner admitted receiving Meralco's notice of investigation dated November 3, 2003, to wit:

  1. T. Natanggap mo ba yong notice ng investigation na may petsang November 3, 2003 na personally na ipinadala namin sa iyo sa bahay mo na may numerong 17 Earth St., Meralco Village 8, Batia, Bocaue, Bulacan?

    S. Opo.

  2. T. Ipinapakita ko sa iyo ang isang notice ng investigation na may petsang November 3, 2003 na naka-addressed (sic) sa isang Mr. Norman C. Yabut ng 17 Earth Street, Meralco Village 8, Batia, Bocaue, Bulacan at ang may lagda ay si Atty. J.R.T. Albarico, head ng Investigation-Litigation ng Meralco.  Dito sa nasabing notice ay may nakalagay sa ibaba na received by Salvacio (sic) M. Yabut na may kanyang pirma, at nakalagay din ang date na 11/03/03 at ang nakalagay sa relationship ay wife.  Ano ang masasabi mo tungkol sa bagay na ito.

    S. Ito po yong notice ng investigation na aking natanggap at ang nakatanggap nito ay ang aking misis na si Maria Salvacion Yabut.[28]

On November 17, 2003, Meralco conducted a hearing on the charges against the petitioner. During said time, the petitioner was accorded the right to air his side and present his defenses on the charges against him. Significantly, a high-ranking officer of the supervisory union of Meralco assisted him during the said investigation. His sworn statement[29] that forms part of the case records even listed the matters that were raised during the investigation.

Finally, Meralco served a notice of dismissal dated February 4, 2004 upon the petitioner. Such notice notified the latter of the company's decision to dismiss him from employment on the grounds clearly discussed therein.

WHEREFORE, in view of the foregoing, the petition for review on certiorari is hereby DENIED. The assailed Decision dated August 10, 2009 and Resolution dated November 26, 2009 of the CA in CA-G.R. SP No. 96789 are hereby AFFIRMED.


Carpio, (Chairperson), Perez, Sereno, and Reyes, JJ.* concur.

* Additional Member in lieu of Associate Justice Arturo D. Brion per Special Order No. 1174 dated January 9, 2012.

[1] Penned by Associate Justice Sixto C. Marella, Jr., with  Associate Justices Magdangal M. De Leon and Japar B. Dimaampao., concurring; rollo, pp. 25-42.

[2] Id. at 44.

[3] Id. at 137.

[4] Id. at 138.

[5 ]Id.

[6] Id. at 154.

[7] Id. at 140-144.

[8] Id. at 163-165.

[9] Id. at 164-165.

[10] Id. at 166.

[11] Id. at 100-111.

[12] Id. at 85-98.

[13] Id. at 98.

[14] Id. at 208-213.

[15] Id. at 68-82.

[16] Id. at 83-84.

[17] Supra note 1.

[18] Id. at 35.

[19] Id. at 41.

[20] Supra note 2.

[21] Antiquina v. Magsaysay Maritime Corporation, G.R. No. 168922, April 13, 2011.

[22] Nagkakaisang Lakas ng Manggagawa sa Keihin v. Keihin Philippines Corporation, G.R. No. 171115, August 9, 2010, 627 SCRA 179, 188, citing Austria v. NLRC, 371 Phil 340, 360 (1999). See also Philippine Aeolus Automotive United Corporation v. NLRC, 387 Phil 250, 261 (2000).

[23] Rollo, p. 37.

[24] G.R. No. 149433, June 22, 2011.

[25] Etcuban, Jr. v. Sulpicio Lines, Inc., 489 Phil 483, 496 (2005).

[26] Ocean Terminal Services, Inc., et al. v. NLRC, et al., 274 Phil 779, 784 (1991). (citations omitted)

[27] Asian Terminals, Inc. v. Sallao, G.R. No. 166211, July 14, 2008, 558 SCRA 251, 259, citing Metropolitan Bank and Trust Company v. Barrientos, 516 Phil 655 (2006).

[28] Rollo, p. 143.

[29] Id.

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