478 Phil. 830


[ G.R. No. 148105, July 22, 2004 ]




Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision[1] dated January 17, 2001 and Resolution[2] dated May 3, 2001 of the Court of Appeals in CA-G.R. SP No. 53987, entitled “Manila Electric Company vs. The Honorable National Labor Relations Commission (Second Division) and Francisco Reyno.”

The facts as borne by the records are:

On August 1, 1969, Francisco P. Reyno, petitioner, was employed by the Manila Electric Company (MERALCO), respondent, where he eventually occupied the position of Assistant Squad Leader of Squad 12[3] at the Inspection Department.  Petitioner and his team of inspectors were in charge of monitoring and inspecting electric meters installed at the premises of respondent’s customers; ensuring the accuracy of the electric consumption recorded in these meters; and reporting and apprehending violators who use insidious schemes or devices to reduce their electric consumption deliberately.

Later, respondent implemented an incentive scheme aimed at encouraging its inspectors to perform their duties zealously.  Under this incentive scheme, the inspector concerned shall be paid an additional 30-minute overtime pay for every submitted report of major violation/s committed by customers against respondent.

Sometime in July 1987, Roger Sacdalan, Senior Investigator of respondent’s Special Presidential Committee (SPC), received several complaints against Gilbert Villapa, Leader of Squad 12, about an illegal connection at the Daig Kaku Restaurant.

Acting thereon, SPC conducted an investigation wherein members of Squad 12, namely, Tadeo Santiago, Carlos Cruz, July Capundan, Danilo Teodoro and Edwin Dancel were summoned to shed light on the matter.   However, they failed to establish Villapa’s involvement in such illegal connection.  Instead, their declarations pointed to petitioner’s irregular performance of his duties.  In particular, Santiago and Cruz stated that during their field inspection of electric meters installed at two houses situated in Malibay, Pasay City, petitioner instructed them to prepare the following false reports: (1) that there was a two-line permanent jumper wire; and (2) that a wire (open potential link)[*] was tapped thereon.  Dancel and Capundan also stated that after their inspection of an electric meter at 1688 Rodriguez Street, Makati City, petitioner directed them to prepare a report indicating therein that the electric meter involved has a loose potential link,* instead of recommending a laboratory test.  Petitioner also ordered them to report the presence of only one, instead of two, shunting wire or jumper in the electric meter installed at Eleuterio Medrano’s house located on 8 J. Climaco Street, Makati City.  It turned out that Medrano is petitioner’s provincemate.  Similarly, Teodoro, another squad member, stated that he was instructed by petitioner to report only one out of two shunted terminal jaws found in the electric meter of a repair shop situated on Palawan Street, Makati City.  Teodoro also reported that during an inspection in Estrella, Pasay City, he saw petitioner tightening a potential link of the electric meter, when it should have been reported to respondent.

This prompted SPC, on September 14 and 21, 1987, to conduct clarificatory hearing.  But the hearing set on September 14, 1987 was cancelled for failure of petitioner’s counsel to appear despite notice.  When the case was called for hearing as scheduled, his counsel again failed to appear.  He then opted to proceed with the clarificatory hearing without the assistance of his counsel.

After evaluating the records on hand, the SPC found petitioner guilty of dishonesty, serious misconduct and willful breach of trust.  Respondent then sent petitioner a notice terminating his services effective November 4, 1987.

Eventually, petitioner filed with the Labor Arbiter a complaint for illegal dismissal and payment of overtime pay, premium pay for holidays and rest days, damages and attorney’s fees against respondent, docketed as NLRC NCR Case No. 00-02-01093-89.

In due course, the Labor Arbiter rendered a Decision dated August 2, 1993 dismissing petitioner’s complaint.  The Labor Arbiter held that respondent has valid reasons to terminate petitioner’s employment and that he was given the fullest opportunity to be heard, thus:
“Verily, the above facts clearly established that complainant indeed violated the company’s Code of Employee Discipline and committed serious misconduct in the performance of his duties and functions which acts are just causes for the dismissal of an employee (Art. 282 of the Labor Code).  Complainant, as inspector was precisely tasked to safeguard the interest of the company and was expected to render truthful reports of violations committed by customers of respondent company.   When complainant fabricated his reports to favor his friends and acquaintances and worse, to profit out of his irregularities, respondent MERALCO had reasons to terminate his employment.   Similarly, respondent company has ample reason to distrust complainant which is another just and valid ground for his dismissal.   (Art. 282 of the Labor Code; Filipro, Inc. vs. NLRC, G.R. Nos. L-70546, October 16, 1986 [145 SCRA 123, 131-132]).

On the third issue, we find the presence of due process prior to the dismissal of herein complainant. The facts and circumstances support this finding.

Firstly, complainant was informed of the charges against him and the nature of the irregularities he committed. (Exh. ‘7’).

Secondly, there was investigation conducted and complainant participated in the process.   In fact, his request for postponement of the investigation was granted and was reset to September 21, 1987 instead of September 14, 1987.    Complainant’s testimony before Mr. Sacdalan confirmed that he was given the full opportunity to explain his side.   He (complainant) was able to raise his own version on every incident alluded to in the declaration against him and refute point by point the testimonies of members of Squad 12 (Exh. 7-C).   These facts only prove that complainant was informed or he was able to examine the declarations of witnesses against him.

Furthermore, complainant’s request for re-investigation was favorably acted upon by respondent wherein he was able to submit statements of three customers of the company (Exh. ‘11’ and ‘12’).

Based on the foregoing facts, it is abundantly clear that complainant was accorded the fullest opportunity to be heard.

x x x

WHEREFORE, PREMISES CONSIDERED, let the instant case be, as it is hereby ordered dismissed for lack of merit.

On appeal by petitioner, the National Labor Relations Commission (NLRC) First Division promulgated a Decision dated August 18, 1994 reversing the Arbiter’s Decision and ordering respondent to reinstate petitioner to his former position and pay him backwages, thus:
“WHEREFORE, the appealed decision is hereby set aside.  Finding that the dismissal of complainant is not supported by any just cause, respondent is hereby directed to reinstate complainant to the position he held at the time of his dismissal, without loss of seniority rights and benefits, and to pay him backwages computed from the time his wages were withheld up to the time he is actually reinstated.

Respondent then filed a motion for reconsideration.   On January 11, 1995, the NLRC First Division rendered a Decision reconsidering its earlier Decision and dismissing petitioner’s complaint for lack of merit, thus:
“WHEREFORE, our August 18, 1994 decision is reconsidered and set aside.  The August 2, 1993 decision of Labor Arbiter Numeriano D. Villena is upheld and the complaint below (for illegal dismissal and related claims) is hereby dismissed for lack of merit.

This time, it was petitioner who filed a motion for reconsideration.  Meantime, he also filed a motion to inhibit the members of the First Division.  Subsequently, the case was re-raffled to the NLRC Second Division.

On April 22, 1999, the NLRC Second Division promulgated a Decision affirming with modification the Decision dated August 18, 1994 of the First Division in the sense that respondent is ordered to reinstate petitioner to his former position without backwages, thus:
“WHEREFORE, in view of the above, we hereby set aside our decision promulgated on January 11, 1995 and reinstate our earlier decision of August 18, 1994 finding complainant’s dismissal to be illegal.  Correspondingly, we hereby order respondent to reinstate complainant to his former position without backwages.

As a consequence, respondent, on July 27, 1999, filed with the Court of Appeals a petition for certiorari (with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction) assailing the Decision dated April 22, 1999 rendered by the NLRC.

On January 17, 2001, the Court of Appeals promulgated a Decision affirming the Decision dated January 11, 1995 of the NLRC First Division sustaining the validity of petitioner’s dismissal from the service.   The Appellate Court ratiocinated as follows:
“The petition is impressed with merit.

x x x

In the case at bar, we uphold the Labor Arbiter when he stated that on the basis of the facts of the case ‘it is abundantly clear that complainant was accorded the fullest opportunity to be heard.’

As to the issue of whether or not there is just cause to terminate private respondent, x x x:

x x x

In this case, petitioner dismissed private respondent for serious    misconduct and willful breach of trust. As correctly observed by the First Division:
‘Undoubtedly, on both charges of falsely reporting major violation of customers to earn thirty (30) minute overtime pay for every reported major violation, and of falsifying a report to favor a customer, the record is full of substantial evidence establishing complainant’s guilt thereon.’
x x x

Private respondent was not a mere rank-and-file employee; he was an Assistant Leader of Squad 12 of petitioner’s Inspection Division.   As such, he was principally tasked with the duty of inspecting electric meters together with a team of inspectors for the purpose of ensuring the accurate recording of electric consumption and to apprehend customers who attempt to reduce their recorded electric consumption through the use of insidious schemes or devices. The members of the squad are required to report said violations committed by the customers. All reports have to be checked by the squad leader or assistant squad leader before they are submitted to the area coordinator. Given these duties, the position of an inspector is imbued with a high degree of honesty. Considering that private respondent was occupying the position of assistant squad leader, the degree of honesty required of private respondent is likewise of a degree higher than that demanded of an ordinary inspector.

On several occasions, private respondent instructed his squad members to prepare reports indicating therein a violation where there is none, or one favoring a customer. These infractions are sufficient causes to erode the trust and confidence petitioner reposed on private respondent.   Since petitioner has ample reason to distrust him, we cannot deny its authority to dismiss him.

x x x

WHEREFORE, premises considered, the Decision of  public respondent NLRC (Second Division) is hereby REVERSED and the Decision dated January 11, 1995 of the First Division is REINSTATED.

Petitioner filed a motion for reconsideration, but was denied by the Appellate Court in a Resolution dated May 3, 2001.

Petitioner, in this present petition for review on certiorari, contends that the Court of Appeals seriously erred (1) in not considering that he was deprived of his right to cross-examine Carlos Cruz, Danilo Teodoro and Edwin Dancel before the Labor Arbiter; and (2) in disregarding the ruling of the NLRC Second Division in its Decision dated April 22, 1999 that he was illegally dismissed.

On the first assigned error, let it be stressed that the proceedings before the Labor Arbiter are non-litigious in nature.  Section 6, Rule V of the NLRC Rules of Procedure, as amended by Resolution No. 01-02, Series of 2002, provides:
“SECTION 6. NATURE OF PROCEEDINGS. – The proceedings before a Labor Arbiter shall be non-litigious in nature.   Subject to the requirements of due process, the technicalities of law and procedure and the rules obtaining in the court of law shall not strictly apply thereto.   The Labor Arbiter may avail himself of all reasonable means to ascertain the facts of the controversy speedily, including ocular inspection and examination of well-informed persons.”
Clearly, the Appellate Court, in rejecting petitioner’s claim that he was deprived of his right to cross-examine the three witnesses, did not err as it was not required to apply strictly the Rules of Evidence.[4]   At any rate, respondent had valid reasons why it did not present those three witnesses during the proceedings before the Labor Arbiter, thus:
“x x x. For the information of the Honorable Commission, Carlos Cruz was not presented during the trial because he met an untimely death in the course thereof. On the other hand, Edwin Dancel resigned from the Company and then migrated to the United States. With respect to Danilo Teodoro, he availed of the benefits under the Special Separation Program of the company and since then, his whereabouts remained unknown. x x x.”[5]
This case is analogous to Philippine Airlines, Inc. vs. Tongson[6]  where we emphasized the principle that technical rules of evidence are invariably relaxed when applied to proceedings before the Labor Arbiter and the NLRC, thus:
“In fact, the hearing before these agencies does not connote full adversarial proceedings.  What is required, among others, is that every litigant is given reasonable opportunity to appear and defend his right, introduce witnesses and relevant evidence in his favor.”
Relative to the second assigned error, we find that there is substantial evidence to support the finding of the Court of Appeals that petitioner’s dismissal from the service is valid.  Well-entrenched is the rule that substantial proof, and not clear and convincing evidence or proof beyond reasonable doubt, is sufficient as basis for the imposition of any disciplinary action upon the employee.  The standard of substantial evidence is satisfied where the employer, as in this case, has reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders him unworthy of trust and confidence demanded by his position.[7] That petitioner violated respondent MERALCO’s Code of Employee Discipline and committed serious misconduct in the performance of his duties have been proved by the affidavits of petitioner’s own subordinates in Squad 12 of which he was the Assistant Squad Leader.  Moreover, respondent had lost his trust and confidence in petitioner.  Under Article 282 of the Labor Code, as amended, these are just causes for his dismissal from the service.

Petitioner, in insisting that his employment should not be terminated, invokes his 19 years of service in respondent company.  In Central Pangasinan Electric Cooperative, Inc. vs. Macaraeg,[8] we held that “the longer an employee stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company.” On a similar note, our ruling in United South Dockhandlers, Inc. vs. NLRC[9] is quite explicit, thus:
“An employee’s length of service with the company even aggravates his offense.  He should have been more loyal to petitioner company from which he has derived his family bread and butter for seventeen (17) years.”
WHEREFORE, the petition is DENIED.  The assailed Decision dated January 17, 2001 and Resolution dated May 3, 2001 of the Court of Appeals in CA-G.R. SP No. 53987 are hereby AFFIRMED.


Panganiban, (Chairman), and Carpio-Morales, JJ., concur.
Corona, J., on leave.

[1] Annex “A” of the Petition for Review, Rollo at 39-47.

[2] Annex “B”, id. at 48.

[3] A team of inspectors composed of Gilbert Villapa as Squad Leader, petitioner as Assistant Squad Leader, and Tadeo Santiago, Carlos Cruz, July Capundan, Danilo Teodoro and Edwin Dancel as members.

[*] An open or loose potential link refers to loose terminal screw/s in the electric meter, thereby indicating an illegal connection or meter tampering.

[4] In Rabago vs. NLRC (200 SCRA 158, 164-165 [1991]), we held:
“x x x.  The argument that the affidavit is hearsay because the affiants were not presented for cross-examination 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.  x x x”
[5] See Annex “F” of the Petition for Review, Rollo at 86.

[6] G.R. No. 153157, October 13, 2003 at 12.

[7] Philippine Airlines, Inc. vs. Tongson, ibid. at 12-13, citing Consolidated Food Corporation vs. NLRC, 315 SCRA 129 (1999).

[8] G.R. No. 145800, January 22, 2003, 395 SCRA 720, 728, citing Citibank, N.A. vs. Gatchalian, 240 SCRA 212 (1995).

[9] G.R. No. 119935, February 3, 1997, 267 SCRA 401, 407, citing Cosmopolitan Funeral Homes, Inc. vs. Maalat, 187 SCRA 108 (1990).

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