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625 Phil. 142

SECOND DIVISION

[ G.R. No. 157861, February 02, 2010 ]

BIBIANA FARMS AND MILLS, INC., PETITIONER, VS. ARTURO LADO, RESPONDENT.

D E C I S I O N

BRION, J.:

Before us is the Petition for Review on Certiorari,[1] filed by the Bibiana Farms and Mills, Inc. (petitioner), assailing the Decision[2] dated August 21, 2002 and the Resolution[3] dated January 27, 2003 of the Former Thirteenth Division of the Court of Appeals (CA) in CA-G.R. SP No. 66005 entitled "Arturo Lado v. National Labor Relations Commission (Fifth Division) and Bibiana Farms and Mills, Inc."

THE ANTECEDENTS


The facts of the case are briefly summarized below.

The petitioner is an agricultural corporation located in Katangawan, General Santos City engaged in hog and cattle raising and corn milling. Respondent Arturo Lado (Lado) started his employment with the petitioner on November 2, 1982 as Quality Controller of Feeds. When he was dismissed in 1998, Lado held the position of Warehouseman with the tasks of receiving incoming and outgoing feed ingredients; supervising the feed mill laborers; acting as empty sacks classifier and controller; and feeds ingredients classifier.

On September 7, 1998, at about 9:30 a.m., Mildred Manzo (Manzo) transacted with Rosalia Manalo (Manalo), the petitioner's cashier, for the purchase of 3,000 pieces of empty sacks. Since the price of the sacks still had to be ascertained, Manalo advised Manzo to come back in the afternoon. When Manzo returned at 4:35 p.m., Manalo quoted the price at P3.50 per sack. Manalo then gave Manzo a note containing the number and words "3,000/mix-mix" and told her to proceed to the warehouse. Manzo did and showed the note to Lado. The latter in turn showed her the bundles of empty sacks (50 pieces per bundle) available for sale. At Manzo's request, Lado loaded 68 bundles (or 3,400 pieces of empty sacks) in the dump truck for unloading at the gate after payment. Upon payment, however, Manalo only accepted the cash payment for 60 bundles (3,000 pieces) and refused to accept Manzo's personal check for the excess; thus, Manzo only paid for the original 60 bundles purchased. Instead of personally overseeing the segregation and unloading of the excess 8 bundles on being informed (through the delivery receipt and the gate pass) that only 60 bundles were paid for, Lado allegedly delegated the task. The excess 8 bundles, however, were not removed from the truck and the whole lot was unloaded at the gate. When Manalo passed by the gate on her way home, she saw the sacks "dumped outside the guardhouse." She asked for a count of the sacks as they appeared to be more than the 60 bundles that Manzo purchased.[4] She confirmed that there were 68 bundles outside the guardhouse.

On September 8, 1998, the petitioner's General Operations Manager/Production Supervisor, Peter L. Lim (Lim), issued two (2) inter-office memoranda[5] directing Lado to submit his written explanation on: (1) the release of 3,400 pieces of empty sacks when only 3,000 pieces were duly paid for and covered by receipt, and (2) the release of one-use sack when Manalo's note expressly authorized the release of mix-use sacks.

On September 9, 1998, Lado submitted to Lim an Explanation/Clarification.[6] He apologized for the incident, but stressed that the company did not lose anything. He explained that it was an honest mistake due to time constraints and that he acted without any malice or bad intention.

On September 9, 1998, Lim issued an inter-office memorandum[7] placing Lado under preventive suspension for one week or from September 10 to September 16, 1998. He also informed Lado that the company would conduct an investigation whose place, date and time would be relayed to him.

Later on the same day, Lim issued a notice informing Lado that management would conduct further investigation/inquiry on the incident at 4:00 p.m. of September 11, 1998.[8] Since Lado was under preventive suspension, the notice was sent to his residence. Lado, however, was not at home and his housemaid refused to receive the notice.[9]

On September 10, 1998, Lado submitted to Lim a detailed explanation.[10] He stated that when the buyer learned that 68 bundles were available, she expressed her intention to buy all the 68 instead of just 60 bundles. He explained that the buyer only paid for 60 bundles because her cash was only sufficient for 60 bundles and would have paid the excess by a personal check, but Manalo refused to accept payment by check.

As scheduled, the petitioner conducted its investigation of the incident on September 11, 1998 at 4:00 p.m. Present were Lim, Manalo, Ruby Ortiz (recorder), Andy Saclot (dumptruck driver), Jerry "Bobong" Enemenzo (laborer), Jimmy Ponce (security guard), Cristituto "Cris" Gasan (laborer), and Joelito Doromal (security guard). [11]

On September 14, 1998, Lado filed a complaint for illegal suspension against the petitioner and Lim.

On September 15, 1998, Lim issued Lado a Notice of Termination, [12] dismissing him from the service effective upon receipt, for "serious misconduct, dishonesty, willful breach of trust, fraud, loss of confidence and other grounds," based on the results of the investigation and after considering his written explanations dated September 9, 1998 and September 10, 1998. Lado received the Notice of Termination on September 18, 1998. [13]

Lado filed a complaint for illegal dismissal against the petitioner and Lim. The cases for illegal suspension and illegal dismissal were consolidated.

In defense, the petitioner alleged that Lado was validly dismissed for loss of trust and confidence due to dishonesty and fraud in the release of the excess 400 empty sacks, as well as for other infractions, such as extortion from laborers under his supervision in exchange for overtime work, habitual tardiness and absenteeism. It also claimed that Lado was afforded due process when he was required to submit his written explanations on the empty-sacks incident; when he was preventively suspended and duly informed of the investigation to be conducted on September 11, 1998 (which he did not attend); and when he received the Notice of Termination on September 18, 1998.

THE COMPULSORY ARBITRATION DECISIONS


Labor Arbiter (Arbiter) Arturo P. Aponesto dismissed the complaints for lack of merit. [14] The Arbiter gave weight to the affidavits of the petitioner's witnesses regarding Lado's involvement and noted that they were not motivated by ill-will and did not testify falsely against Lado. He found that Lado committed fraud or willful breach of his employer's trust in releasing 3,400 pieces of empty sacks despite Manalo's note stating that only 3,000 pieces were to be purchased by Manzo. The Arbiter also found that Lado was afforded due process, rejecting Lado's contention that he was not notified of the investigation that led to his dismissal.

The National Labor Relations Commission (NLRC) reversed the Arbiter's decision on appeal, [15] ruling that Lado had been illegally dismissed. It found that Lado had no intention to defraud the petitioner and that the petitioner's accusation of fraud for releasing 68 bundles of empty sacks was a "product of unrestrained imagination." The NLRC ordered Lado's reinstatement with full backwages from September 10, 1998 until full reinstatement, plus 10% of the total award as attorney's fees.

The petitioner moved for reconsideration. [16] In its Resolution [17] of August 8, 2000, the NLRC granted the motion, set aside its May 29, 2000 Resolution, and reinstated the Arbiter's dismissal of Lado's complaint. The NLRC concurred with the Arbiter's view that the petitioner's witnesses were not motivated by any ill-will and did not testify falsely against Lado.

Lado moved [18] but failed [19] to secure a reconsideration of the NLRC Resolution of August 8, 2000. He then sought relief from the CA through a petition for certiorari [20] under Rule 65 of the Rules of Court, charging the NLRC with grave abuse of discretion in holding that fraudulent intent attended the release of 68 bundles of empty sacks, and in recognizing loss of trust and confidence without explaining the facts supporting this conclusion.

THE CA DECISION


In its Decision [21] of August 21, 2002, the CA set aside the NLRC Resolutions and ruled that Lado had been illegally dismissed. It found no basis for Lado's dismissal for loss of trust and confidence because the release of the excess 400 empty sacks was not made with fraudulent intent. It held that the release of the excess sacks was due to lack of communication; the loading of the 68 bundles was an anticipatory move on the part of Lado (due to Manzo's expressed intention to buy 68 bundles); and the unloading was not properly communicated and was not carried out due to time constraints.

The appellate court also found that the petitioner failed to accord Lado due process because he did not receive the notice for the investigation conducted on September 11, 1998. Neither was he properly informed of the additional charges leveled against him.

Accordingly, the CA ordered Lado's reinstatement with full backwages from September 10, 1998 until he is actually reinstated, plus 10% attorney's fees and the costs of suit.

The petitioner came to us through the present petition after it failed to secure a reconsideration of the CA Decision. [22]

THE PETITION


The petitioner submits that Lado was validly dismissed since his separation from the service was based on the release to the buyer under fraudulent circumstances of more than the empty sacks paid for and authorized. It insists that since Lado's position involved trust and confidence in the care and custody of the petitioner's properties, his actions in Manzo's purchase of the empty sacks led to the conclusion that he intended to defraud the company. The petitioner stresses that Lado's dismissal satisfied the requirements of due process since he was given the opportunity to explain his side through the two (2) show-cause letters, the formal notice of preventive suspension, and the notice of employment termination.

THE CASE FOR THE RESPONDENT


Lado, on the other hand, contends that the petitioner raised no new matters to merit the Court's favorable consideration, and that the arguments and evidence presented by both parties were duly considered and evaluated by the CA. He submits that the petitioner failed to prove his supposed fraudulent intent and likewise failed to afford him due process when he was not informed by the two (2) inter-office memoranda that his infractions would cost him his job of more than 16 years.

THE ISSUES


The core issue focuses on loss of trust and confidence. In the context of the Rule 65 petition before the CA, the issue is whether the CA correctly found that the NLRC committed grave abuse of discretion in ruling that Lado was legally dismissed for loss of trust and confidence.

THE COURT'S RULING


We find the petition meritorious.

At the outset, we clarify that we are generally precluded in a Rule 45 petition from reviewing factual findings of the CA; we are not triers of facts. However, the conflicting factual findings of the Arbiter and the NLRC, on one hand, and the CA, on the other, compel us to depart from this general rule, and to wade into the consideration of the presented evidence. [23]

Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold, consisting of substantive and procedural aspects. Not only must the dismissal be for a just or authorized cause; the basic requirements of procedural due process - notice and hearing - must likewise be observed before an employee may be dismissed. Without the concurrence of the two, the termination is illegal in the eyes of the law, for employment is a property right that the holder cannot be deprived of without due process. [24] The burden of proof rests on the employer to show that the employee's dismissal has met these due process requirements. The case of the employer must stand or fall on its own merits and not on the weakness of the employee's defense. [25]

On the just cause issue

Lado's notice of termination of employment, contained in the petitioner's memorandum of September 15, 1998,[26] stated that Lado was separated from the service due to serious misconduct, dishonesty, willful breach of trust, fraud, loss of confidence and other grounds. In the assailed CA decision, the CA held that based on the evidence presented, the petitioner failed to discharge the burden of proof that Lado's dismissal was for a valid and authorized cause. An excerpt from the challenged decision declared:

On the supposed fraudulent intent which became the basis for lack of trust and confidence, fraud as a just cause for terminating an employee's services, particularly for lack of trust and loss of confidence, being defined as any act, omission or concealment which involves a breach of legal duty, trust or confidence justly reposed and is injurious to another, implies willfulness or wrongful intent.

In fact, under Article 283 (c) of the Labor Code, the breach of trust must be willful and a breach is willful, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly and inadvertently (Atlas Consolidated Mining Development Corp. v. National Labor Relations Commission, 290 SCRA 479).

In this case at bar, the release of the excess 400 empty sacks by herein petitioner could not and cannot be considered with fraudulent intent considering that it was not willful although done intentionally and knowingly but with justifiable reason x x x.

We do not agree that the evidence presented did not support the conclusion that a valid cause for dismissal existed.

Lado was no ordinary rank-and-file employee. As warehouseman, his duties involved the handling of incoming and outgoing feed ingredients, classifying feed ingredients, classifying and controlling feeds empty sacks, and supervising feed mill laborers. He had, as the Arbiter noted, access to company property. As early as November 17, 1982 or fifteen (15) days into his employment by the company, the petitioner's then operations manager, Froilan G. Tecson, issued Lado a memorandum[27] directing him to devise means to immediately check the full sacks sent to the stations and the empties being returned, and to take extra care of their accounting and inventory, down to the last sack. In short, the petitioner tasked Lado with the close monitoring and handling of company property, especially the outflow of full sacks of feeds destined for the stations and the return of empty sacks, to avoid or minimize losses.

Nowhere in the record of the case does it appear that Lado denied the issuance of the memo. He was therefore aware of his duties and understood or should have understood why the memo had been issued - to make him, as warehouseman, extra careful in the handling, monitoring and safekeeping of the company property under his charge. In other words, Lado held a position of trust and confidence. It was this trust that he had to uphold in the afternoon of September 11, 1998 when Manzo purchased the company's empty sacks.

Manzo, the purchaser, transacted with Manalo, the petitioner's cashier, who quoted the price of empty sacks at P3.50 per piece. Manzo only ordered 3,000 empty sacks; to verify their availability, she proceeded to Lado's warehouse bearing Manalo's note on which was written "3,000/mix-mix." Manzo showed the note to Lado. Versions of what exactly happened after Lado saw the note vary because the testimonies of Lado and Manalo on the sequence of events, although not necessarily contradictory, differed in emphasis.[28]

In his affidavit dated January 19, 1999 which he submitted in the compulsory arbitration proceedings and which was quoted by the CA,[29] Lado stated that Manzo showed him the note from Manalo, at which point he showed her the empty sacks available for sale; after inspecting the empty sacks, Manzo went back to the business office and on her return, she requested the counting and loading of 68 bundles of empty sacks at 50 pieces per bundle which she intended to buy; after loading, the sacks were transported first to the business office, for Manzo to get a gate pass after paying the sacks she purchased, and then to the gate where the bundled sacks would be unloaded; Manzo came back and told him that she only bought 60 bundles; he told her to leave the excess 8 sacks behind, and went to the gate to advise the guard to segregate and place the extra bundles inside the compound.

On the other hand, Manalo, in her affidavit dated February 23, 1999[30] (also cited by the CA), deposed that Lado, without waiting for the delivery receipt and gate pass, in contravention of the usual office procedure, immediately loaded the empty sacks into the dump truck; Manzo returned to the office and paid Manalo P10,500.00 in cash for the 60 bundles for which she gave Manzo the delivery receipt and the gate pass for the 60 bundles; after office hours at around 5:05 p.m., while she was leaving the company compound in a service vehicle, she noticed the empty sacks dumped just outside the guardhouse; the bundles appeared to be more than the 60 bundles or 3,000 pieces purchased by Manzo who was the only purchaser of empty sacks that day; apprehensive, she ordered the guards on duty to count the bundles and discovered, after the count, that there was an excess of 8 bundles or 400 pieces; the dump truck driver (Andy Saclot) who unloaded the empty sacks outside the company guardhouse told her that 68 bundles were loaded on the dump truck pursuant to Lado's instructions.

On the basis principally of Lado's role in the empty sacks transaction, the labor tribunals adjudged Lado's dismissal to be for a just cause. The Arbiter found Lado to have committed fraud or willful breach of trust reposed in him by his employer. The Arbiter also found that Lado's employment with the petitioner is far from exemplary because of tardiness and absences from work without leave of absence in the past, as well as exaction of money from laborers in exchange for overtime work.

After considering the parties' submission, we are convinced that Lado's acts that almost led to the loss of 400 empty sacks, constituted not only a violation of company rules and regulations, but also a serious infraction resulting in his employer's loss of trust and confidence in him. His act of loading 68 bundles of empty sacks, despite the authority to deliver only 60 bundles, was not just in anticipation of the possible purchase by Manzo of the entire lot of empty sacks as the CA opined; it was part of a scheme to transport the entire lot, a part of which was unpaid, out of company premises. This is the only conclusion that we can draw when Lado had all the 68 bundles loaded into the truck after Manzo presented to him Manalo's note clearly stating "3,000 mix-mix." This note clearly indicated that Manzo and Manalo agreed that Manzo was only buying 3,000 pieces of empty sacks. Yet, Lado disregarded this note on the justification that Manzo expressed the desire to purchase the entire lot shown to her. Lado, in fact, was subsequently presented with the receipt and gate pass for only 3,000 empty sacks, yet again failed to act on this clear evidence of the purchase and the overloading that he had made.

On the assumption that Manzo indeed expressed the desire to purchase all of the 68 bundles, Lado should have asked Manzo to go back to Manalo to have the purchase transaction adjusted and to secure a receipt and gate pass from Manalo expressly indicating that she paid for the 68 bundles of empty sacks. Despite the absence of any clearance or instructions from Manalo, Lado had the 68 bundles loaded. Subsequently, despite the receipt and gate pass for only 60 bundles, Lado failed to ensure that the excess were unloaded. At the very least, this is negligence and mishandling of the grossest kind of property under his care.

Lado's excuses that he had asked Manzo to leave the extra 400 sacks at the gate when Manzo told him that she only paid for 3,000 pieces and that he went to the gate to tell the guard to segregate the 8 bundles and to place them inside the compound are critical points that can exculpate Lado from liability. Unfortunately, they lack corroboration. The stark reality is that the entire lot was dumped unsegregated outside the company guardhouse and was ready for pick up. Had Manalo not chanced upon the bundles of sacks on her way out of company premises, the entire lot would have been loaded without hindrance on Manzo's truck. That the entire 68 bundles were all dumped outside the guardhouse, cleared for release and ready for pick up, belied Lado's claim that he had ordered a segregation and unloading of the unpaid portion of the lot.

Interestingly, when Manalo confronted Lado on the excess empty sacks when the delivery receipt was for only 3,000 pieces, Lado could only try to convince Manalo to allow the excess to be paid by Manzo's check. Although Lado denied this company claim, the weight of the other evidence leads us to disbelieve this denial. At that point, Lado had been caught red-handed in a scheme to spirit off unpaid company sacks. There was really no excuse he could offer Manalo, given the written authorizations for the release of only 3,000 empty sacks; thus he could only plead that the excess be paid for by check. To be sure, the failure of the guard to heed his unloading orders and the purported time constraint could have been given as justifications. That no such excuse was then given only leads to the inference that, right then and there, the guards would have denied the alleged unloading instructions; thus, the lame offer to pay by check was the only way out given.

Based on these considerations, we can only conclude that Lado has become unfit to remain in employment with the petitioner. When he disregarded Manalo's note, Lado violated company procedures, laying the company open to the possibility of loss. This is already serious misconduct for which he should be held accountable. When he failed to unload despite the clear obligation to do so, he consummated his end of the deal that would have led to the loss of company property and thereby violated his fiduciary duty as custodian of company property.

In. Fungo v. Lourdes School of Mandaluyong,[31] we restated the guidelines for the application of loss of trust and confidence as a just cause for dismissal of an employee from the service, thus:

x x x a) loss of confidence should not be simulated; b) it should not be used as subterfuge for causes which are improper, illegal or unjustified; c) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and d) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.

We find these guidelines complied with in the present case. To reiterate, Lado held a position of trust and confidence and was given access to and authority over company property with clear tasks and guidelines laid down very early in his employment.[32] Like any business entity, the petitioner has every right to protect itself from actual threats to the viability of its operations. Lado, given what happened on September 7, 1998, not only violated the company's trust and confidence; he had become a threat to the viability of company operations and to rule that he should be reinstated would be oppressive to the petitioner. The law, in protecting the rights of the employee, authorizes neither the oppression nor the self-destruction of the employer.[33]

On the issue of due process

The CA held that the respondent was denied due process when he failed to adduce evidence in his behalf during the investigation conducted on September 11, 1998 because he was not duly notified.

We find this to be a gross error on the part of the CA.

The records disclose that notice of the investigation was duly sent to the respondent's home address on September 9, 1998, but the respondent's housemaid repeatedly refused to receive the notice, [34] after which she was told to inform the respondent of the scheduled investigation on September 11, 1998. We note in this regard that service of the notice was made at the place where the respondent would expectedly receive it. Loreto Jeronan, one of the petitioner's drivers, executed an Affidavit [35] about the service and we have no reason to doubt the truthfulness of his statements; no evidence on record shows that Jeronan, motivated by ill-will, intended to testify falsely against the respondent. Thus, we have to accept his evidence as trustworthy and reliable.

The essence of due process is the opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law. [36] The respondent was given the opportunity to be heard when a proper notice of investigation was sent to him, although the notice did not reach him for reasons outside the petitioner's control. He was not also totally unheard on the matter as he was able to explain his side through the two (2) explanation letters he submitted. These letters are clear indications that he intimately knew of the matter for which he was being investigated. If he was denied due process at all, the denial was with respect to the charges of extortion, tardiness and absenteeism, which are grounds invoked separately from loss of trust and confidence and which were not serious considerations in the dismissal that followed. We need not therefore consider these grounds as material to the present case.

All told, we find that the CA gravely abused its discretion when it grossly misread the evidence before it; the appellate court should have dismissed Lado for a just cause determined after observance of due process.

WHEREFORE, we hereby REVERSE and SET ASIDE the Decision dated August 21, 2002 of the Court of Appeals in CA-G.R. SP No. 66005. Accordingly, the complaints for illegal suspension and illegal dismissal are hereby DISMISSED for lack of merit.

SO ORDERED.

Carpio (Chairperson), Corona*, Del Castillo, and Perez, JJ., concur.



* Designated additional Member of the Second Division vice Associate Justice Roberto A. Abad, per Special Order No. 812 dated January 4, 2010.

[1] Filed under Rule 45 of the Rules of Court.

[2] Penned by Associate Justice Mercedes Gozo-Dadole (retired), with Associate Justice Salvador J. Valdez (deceased) and Associate Justice Amelita G. Tolentino, concurring; rollo, pp. 20-32.

[3] Id. at 34.

[4] Id. at 59-60; complainant's Position Paper dated January 19, 1999; see also Manalo's affidavit to respondent's Position Paper dated February 23, 1999.

[5] Id. at 49-50.

[6] Id. at 51.

[7] Id. at 53.

[8] Id. at 97.

[9] Id.

[10] Id. at 52.

[11] Id. at 87-91.

[12] Id. at 54.

[13] Id.

[14] Decision dated May 11, 1999; id. at 120-129.

[15] Resolution of May 29, 2000; id. at 157-165.

[16] Id. at 166-173.

[17] Id. at 177-180.

[18] Id. at 181-183.

[19] Id. at 184.

[20] Id. at 185-201.

[21] Supra note 2.

[22] Per Resolution dated January 27, 2003; supra note 3.

[23] Cadiz v. Court of Appeals, G.R. No. 153784, October 25, 2005, 474 SCRA 232, 241; Fujitsu Computer Products Corporation of the Philippines v. Court of Appeals, G.R. No. 158232, March 31, 2005, 454 SCRA 737, 758.

[24] Bughaw, Jr. v. Treasure Island Industrial Corporation, G.R. No. 173151, March 28, 2008, 550 SCRA 307, 317-318.

[25] De Jesus v. National Labor Relations Commission, G.R. No. 151158, August 17, 2007, 530 SCRA 489, 495; PCL Shipping Philippines, Inc. v. National Labor Relations Commission, G.R. No. 153031, December 14, 2006, 511 SCRA 44, 57.

[26] Supra note 12.

[27] Rollo, p. 62; Position Paper for the Respondents, p. 2, paragraph 1.

[28] Id. at 21; CA Decision, p. 2, paragraph 1.

[29] Id. at 21; CA Decision, p. 2, paragraph 2.

[30] Id. at p. 22; CA Decision, p. 3.

[31] G.R. No. 152531, July 27, 2007, 528 SCRA 248.

[32] Supra note 28.

[33] Colgate Palmolive Philippine, Inc. v. Ople, No. L-73681, June 30, 1988, 163 SCRA 323.

[34] Rollo, p. 97.

[35] Id. at 86.

[36] Uniwide Sales Warehouse Club v. National Labor Relations Commission, G.R. No.154503, February 29, 2008, 547 SCRA 220, 243; Eastern Overseas Employment Center, Inc. v. Bea, G.R. No. 143023, November 29, 2005, 476 SCRA 384, 392.

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