Philippine Supreme Court Jurisprudence > Year 2010 > August 2010 Decisions > [G.R. No. 171630 : August 08, 2010] CENTURY CANNING CORPORATION, RICARDO T. PO, JR. AND AMANCIO C. RONQUILLO, PETITIONERS, VS. VICENTE RANDY R. RAMIL, RESPONDENT.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the Decision^[1] and Resolution^[2] of the Court of Appeals (CA) in CA-G.R. SP. No. 86939, dated December 1, 2005 and February 17, 2006, respectively.

The antecedents are as follows:

Petitioner Century Canning Corporation, a company engaged in canned food manufacturing, employed respondent Vicente Randy Ramil in August 1993  as technical specialist. Prior to his dismissal on May 20, 1999, his job included, among others, the preparation of the purchase requisition (PR) forms and capital expenditure (CAPEX) forms, as well as the coordination with the purchasing department regarding technical inquiries on needed products and services of petitioner's different departments.

On March 3, 1999, respondent prepared a CAPEX form for external fax modems and terminal server, per order of Technical Operations Manager Jaime Garcia, Jr. and endorsed it to Marivic Villanueva, Secretary of Executive Vice-President Ricardo T. Po, for the latter's signature. The CAPEX form, however, did not have the complete details^[3] and some required signatures.^[4] The following day, March 4, 1999, with the form apparently signed by Po, respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main Office. Paz processed the paper and found that some details in the CAPEX form were left blank. She also doubted the genuineness of the signature of Po, as appearing in the form. Paz then transmitted the CAPEX form to Purchasing Manager Virgie Garcia and informed her of the questionable signature of Po. Consequently, the request for the equipment was put on hold due to Po's forged signature. However, due to the urgency of purchasing badly needed equipment, respondent was ordered to make another CAPEX form, which was immediately transmitted to the Purchasing Department.

Suspecting him to have committed forgery, respondent was asked to explain in writing the events surrounding the incident. He vehemently denied any participation in the alleged forgery. Respondent was, thereafter, suspended on April 21, 1999. Subsequently, he received a Notice of Termination from Armando C. Ronquillo, on May 20, 1999, for loss of trust and confidence.

Due to the foregoing, respondent, on May 24, 1999, filed a Complaint for illegal dismissal, non-payment of overtime pay, separation pay, moral and exemplary damages and attorney's fees against petitioner and its officers before the Labor Arbiter (LA), and was docketed as NLRC-NCR Case No. 00-05-05894-99.^[5]

LA Potenciano S. Canizares rendered a Decision^[6] dated December 6, 1999 dismissing the complaint for lack of merit. Aggrieved by the LA's finding, respondent appealed to the National Labor Relations Commission (NLRC). Upon recommendation of LA Cristeta D. Tamayo, who reviewed the case, the NLRC First Division, in its Decision^[7] dated August 26, 2002, set aside the ruling of LA Canizares. The NLRC declared respondent's dismissal to be illegal and directed petitioner to reinstate respondent with full backwages and seniority rights and privileges. It found that petitioner failed to show clear and convincing evidence that respondent was responsible for the forgery of the signature of Po in the CAPEX form.

Petitioner filed a motion for reconsideration. To respondent's surprise and dismay, the NLRC reversed itself and rendered a new Decision^[8] dated October 20, 2003, upholding LA Canizares' dismissal of his complaint. Respondent filed a motion for reconsideration, which was denied by the NLRC.

Frustrated by this turn of events, respondent filed a petition for certiorari with the CA. The CA, in its Decision dated December 1, 2005, rendered judgment in favor of respondent and  reinstated the earlier decision of the NLRC, dated August 26, 2002. It ordered petitioner to reinstate respondent, without loss of seniority rights and privileges, and to pay respondent full backwages from the time his employment was terminated on May 20, 1999 up to the time of the finality of its decision.  The CA, likewise, remanded the case to the LA for the computation of backwages of the respondent.

Petitioner filed a motion for reconsideration, which the CA denied in a Resolution dated February 17, 2006. Hence, the instant petition assigning the following errors:

I

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISREGARDING THE UNANIMOUS FINDINGS OF THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION SUSTAINING THE LEGALITY OF PRIVATE RESPONDENT'S TERMINATION FROM HIS EMPLOYMENT.

II

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT PETITIONER CORPORATION FAILED TO SATISFY THE BURDEN OF PROVING THAT THE DISMISSAL OF PRIVATE RESPONDENT WAS FOR A VALID OR AUTHORIZED CAUSE.

III

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT FOR LOSS OF TRUST AND CONFIDENCE TO BE A VALID GROUND FOR AN EMPLOYEE'S DISMISSAL, IT MUST BE SUBSTANTIAL AND NOT ARBITRARY, AND MUST BE FOUNDED ON CLEARLY ESTABLISHED FACTS, OVERLOOKING THE RULE THAT THE MERE EXISTENCE OF A BASIS FOR BELIEVING THAT SUCH EMPLOYEE HAS BREACHED THE TRUST AND CONFIDENCE OF HIS EMPLOYER SUFFICES FOR HIS DISMISSAL.

IV

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT ASIDE FROM HIS INVOLVEMENT IN THE FORGERY OF THE CAPITAL EXPENDITURE (CAPEX) FORMS, PRIVATE RESPONDENT'S PAST VIOLATIONS OR ADMITTED INFRACTIONS OF COMPANY RULES AND REGULATIONS ARE MORE THAN SUFFICIENT GROUNDS TO JUSTIFY THE TERMINATION OF HIS EMPLOYMENT WITH PETITIONER CORPORATION.

Petitioner's main allegation is that there are factual and legal grounds constituting substantial proof that respondent was clearly involved in the forgery of the CAPEX form, i.e., respondent is the forger of the signature of Po, as he is the custodian and the one who prepared the CAPEX form; the forged signature was already existing when he submitted the same for processing; he has the motive to forge the signature; respondent has the propensity to deviate from the Standard Operating Procedure as shown by the fact that the CAPEX form, with the forged signature of Po, is not complete in details and lacks the required signatures; also, in February 1999, respondent ordered 8 units of External Fax Modem without the required CAPEX form and a PR form.

Petitioner insists that the mere existence of a basis for believing that respondent employee has breached the trust and confidence of his employer suffices for his dismissal. Finally, petitioner maintains that aside from respondent's involvement in the forgery of the CAPEX form, his past violations of company rules and regulations are more than sufficient grounds to justify his termination from employment.

In his Comment, respondent alleged that petitioner failed to present clear and convincing evidence to prove his participation in the charge of forgery nor any damage to the petitioner.

Anent the first issue raised, petitioner faults the CA in disregarding the unanimous findings of the LA and the NLRC sustaining the legality of respondent's termination from his employment. The rule is that high respect is accorded to the findings of fact of quasi-judicial agencies, more so in the case at bar where both the LA and the NLRC share the same findings. The rule is not, however, without exceptions one of which is when the findings of fact of the labor officials on which the conclusion was based are not supported by substantial evidence.  The same holds true when it is perceived that far too much is concluded, inferred or deduced from bare facts adduced in evidence.^[9]

In the case at bar, the NLRC's findings of fact upon which its conclusion was based are not supported by substantial evidence, that is, the amount of relevant evidence, which a reasonable mind might accept as adequate to justify a conclusion.^[10]

As correctly found by the CA:

x x x The record of the case is bereft of evidence that would clearly establish Ramil's involvement in the forgery. They did not even submit any affidavit of witness^[11] or present any during the hearing to substantiate their claim against Ramil.^[12]

Respondent alleged in his position paper that after preparing the CAPEX form on March 3, 1999, he endorsed it to Marivic Villanueva for the signature of the Executive Vice-President Ricardo T. Po. The next day, March 4, 1999, respondent received the CAPEX form containing the signature of Po. Petitioner never controverted these allegations in the proceedings before the NLRC and the CA despite its opportunity to do so. Petitioner's belated allegations in its reply filed before this Court that  Marivic Villanueva denied having seen the CAPEX form cannot be given credit. Points of law, theories, issues and arguments not brought to the attention of the lower court, administrative agency or quasi-judicial body need not be considered by a reviewing court, as they cannot be raised for the first time at that late stage.^[13] When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below, he will not be permitted to change the same on appeal, because to permit him to do so would be unfair to the adverse party.^[14]

Thus, if respondent retrieved the form on March 4, 1999 with the signature of Po, it can be correctly inferred that he is not the forger. Had the CAPEX form been returned to respondent without Po's signature, Villanueva or any officer of the petitioner's company could have readily noticed the lack of signature, and could have easily attested that the form was unsigned when it was released to respondent.

Further, as correctly found by the NLRC in its original decision dated August 26, 2002, if respondent was the one who forged the signature of Po in the CAPEX form, there was no need for him to endorse the same to Villanueva and transmit it the next day. He could have easily forged the signature of Po on the same day that he prepared the CAPEX form and submitted it on the very same day to petitioner's main office without passing through any officer of petitioner.

Accordingly, for want of substantial basis, in fact or in law, factual findings of an administrative agency, such as the NLRC, cannot be given the stamp of finality and conclusiveness normally accorded to it, as even decisions of administrative agencies which are declared "final" by law are not exempt from judicial review when so warranted.^[15] Contrary to petitioner's assertion, therefore, this Court sees no error on the part of the CA when it made a new determination of the case and, upon this, reversed the ruling of the NLRC.

As to the second issue, the law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution.^[16]

The termination letter^[17] addressed to respondent, dated May 20, 1999, provides that:

We also conducted inquiries from persons concerned to get more information in (sic) this forgery. Some of your statements do not jibe with theirs. x x x

However, this information which petitioner allegedly obtained from the "persons concerned" was not backed-up by any affidavit or proof. Petitioner did not even bother to name these resource persons.

Petitioner based respondent's dismissal on its unsubstantiated suspicions and conclusion that since respondent was the custodian and the one who prepared the CAPEX forms, he had the motive to commit the forgery. However, as correctly found by the NLRC in its original Decision, respondent would not be benefited by the purchase of the subject equipment. The equipment would be for the use of petitioner company.

With respect to the third issue, while We have previously held that employers are allowed a wider latitude of discretion in terminating the services of employees who perform functions which by their nature require the employers' full trust and confidence and the mere existence of basis for believing that the employee has breached the trust of the employer is sufficient,^[18] this does not mean that the said basis may be arbitrary and unfounded.

The right of an employer to dismiss an employee on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause.^[19]Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust^[20] and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established, but proof beyond reasonable doubt is not necessary.^[21] It must rest on substantial grounds and not on the employer's arbitrariness, whim, caprice or suspicion; otherwise, the employee would eternally remain at the mercy of the employer.^[22]

The case of Philippine Airlines, Inc. v. Tongson,^[23] cited by the petitioner, is not applicable to the present case. In that case, PAL dismissed Tongson from service on the ground of corruption, extortion and bribery in the processing of PAL's passengers' travel documents. We upheld the validity of Tongson's dismissal because PAL's overwhelming documentary evidence reflects an unbroken chain which naturally leads to one fair and reasonable conclusion, that at the very least, respondent was involved in extorting money from PAL's passengers. We further said that even if there is no direct evidence to prove that the employees actually committed the offense, substantial proof based on documentary evidence is sufficient to warrant their dismissal from employment.

In the case at bar, there is neither direct evidence nor substantial documentary evidence pointing to respondent as the one liable for the forgery of the signature of Po.

The cited case of Deles Jr. v. National Labor Relations Commission^[24] is also inapplicable. Therein dismissed employee, Deles Jr., himself admitted during the company investigation that he tampered with the company's sensitive equipment (the JTF Gravitometer No. 5). Thus, there existed sufficient basis for the finding that therein employee breached the trust and confidence of his employer.

As for the final issue raised, petitioner's reliance on respondent's previous tardiness in reporting for work as a ground for his dismissal is likewise not meritorious. The correct rule has always been that such previous offense may be used as valid justification for dismissal from work only if the infractions are related to the subsequent offense upon which the basis of termination is decreed.^[25] His previous offenses were entirely separate and distinct from his latest alleged infraction of forgery. Hence, the same could no longer be utilized as an added justification for his dismissal.

Besides, respondent had already been sanctioned for his prior infractions. To consider these offenses as justification for his dismissal would be penalizing respondent twice for the same offense.^[26]

Respondent's illegal dismissal carries the legal consequences defined under Article 279 of the Labor Code, that is, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to the payment of his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement.^[27]

However, the Court finds that it would be best to award separation pay instead of reinstatement, in view of the strained relations between petitioner and respondent. Respondent was dismissed due to loss of trust and confidence and it would be impractical to reinstate an employee whom the employer does not trust, and whose task is to handle and prepare delicate documents.

Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On the one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other hand, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.^[28]

In view of the foregoing, respondent is entitled to the payment of full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the date of his dismissal on May 20, 1999 up to the finality of this decision, and separation pay in lieu of reinstatement equivalent to one month salary for every year of service, computed from the time of his engagement by petitioner on August 1993 up to the finality of the decision.^[29]

The awards of separation pay and backwages are not mutually exclusive and both may be given to the respondent. In Nissan North Edsa Balintawak, Quezon City v. Serrano, Jr.,^[30] the Court held that:

The normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and, secondly, the payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement. The statutory intent on this matter is clearly discernible. Reinstatement restores the employee who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante dismissal, while the grant of backwages allows the same employee to recover from the employer that which he had lost by way of wages as a result of his dismissal. These twin remedies --reinstatement and payment of backwages -- make the dismissed employee whole who can then look forward to continued employment. Thus, do these two remedies give meaning and substance to the constitutional right of labor to security of tenure. The two forms of relief are distinct and separate, one from the other. Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other. x x x As the term suggests, separation pay is the amount that an employee receives at the time of his severance from the service and x x x is designed to provide the employee with "the wherewithal during the period that he is looking for another employment." In the instant case, the grant of separation pay was a substitute for immediate and continued re-employment with the private respondent Bank. The grant of separation pay did not redress the injury that is intended to be relieved by the second remedy of backwages, that is, the loss of earnings that would have accrued to the dismissed employee during the period between dismissal and reinstatement. Put a little differently, payment of backwages is a form of relief that restores the income that was lost by reason of unlawful dismissal; separation pay, in contrast, is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. x x x The grant of separation pay was a proper substitute only for reinstatement; it could not be an adequate substitute both for reinstatement and for backwages. (Emphasis supplied.)^[31]

The case is, therefore, remanded to the Labor Arbiter for the purpose of computing the proper monetary award due to the respondent.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 86939, dated December 1, 2005 and February 17, 2006, respectively, are AFFIRMED with MODIFICATION that the order of reinstatement is deleted, and in lieu thereof, Petitioner Century Canning Corporation is DIRECTED to pay respondent separation pay.

The case is REMANDED to the Labor Arbiter for the purpose of computing respondent's full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the date of his dismissal on May 20, 1999 up to the finality of the decision, and separation pay in lieu of reinstatement equivalent to one month salary for every year of service, computed from the time of his engagement by petitioner on August 1993 up to the finality of this decision.

SO ORDERED.

Carpio, (Chairperson), Nachura, Abad, and Mendoza, JJ., concur.

Endnotes:

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^[1]  Penned by Associate Justice Santiago Javier Ranada (now retired), with Associate Justice Roberto A. Barrios (now deceased) and Associate Justice Mario L. Guariña III, concurring; rollo, pp. 34-40.

^[2]  Id. at 41.

^[3]  Starting Date, Estimated Completion Date, Budgeted CAPEX amount, Managers/Functional Unit Head's Comment and Justification Summary.

^[4]  Cost and Budget Manager/Functional Unit Head, Management Information Service Manager and Recommending Approving Officer.

^[5]  Records, p. 2.

^[6]  Id. at 64-68.

^[7]  Id. at 78-89.

^[8]  Id. at 96-105.

^[9]  Felix v. National Labor Relations Commission, 485 Phil. 140, 153 (2004).

^[10]  Revised Rules on Evidence, Rule 133, Sec. 5.

^[11]  Like Purchasing Officer Lorena Paz, Exec. VP Mr. Ricardo T. Po, his secretary Marivic Villanueva, and a certain technician named "Boyet" mentioned in the private respondents pleadings (the petitioner in this case).

^[12]  Rollo, p. 38.

^[13]  Jacot v. Dal, G.R. No.179848, November 27, 2008, 572 SCRA 295, 311.

^[14]  Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (formerly Southern Energy Quezon, Inc.), G.R. No. 159593, October 12, 2006, 504 SCRA 484, 495, citing Carantes v. Court of Appeals, 76 SCRA 514, 521 (1977).

^[15]  Vicente v. Court of Appeals, G.R. No. 175988, August 24, 2007, 531 SCRA 240, 247-248.

^[16]  Times Transportation Co., Inc. v. National Labor Relations Commission, G.R. Nos. 148500-01, November 29, 2006, 508 SCRA 435, 443.

^[17]  Records, pp. 29-30.

^[18]  Atlas Fertilizer Corporation v. National Labor Relations Commission, G.R. No. 120030, June 17, 1997, 273 SCRA 549, 558.

^[19] Pepsi-Cola Products Phils., Inc. v. NLRC, 374 Phil. 196, 205 (1999).

^[20] Labor Code, Article 282. Termination by employer. - An employer may terminate an employment for any of the following causes:

x x x x

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

^[21] Abel v. Philex Mining Corporation, G.R. No. 178976, July 31, 2009, 594 SCRA 683, 684.

^[22]  Felix v. National Labor Relations Commission, supra note 9, at 160.

^[23]  459 Phil. 742. (2003).

^[24]  384 Phil. 271 (2000).

^[25]  Salas v. Aboitiz One, Inc., G.R. No. 178236, June 27, 2008, 556 SCRA 374, 390.

^[26]  Id.

^[27]  Coca-Cola Bottlers Phils. Inc. v. Agito, G.R. No. 179546, February 13, 2009, 579 SCRA 445, 471.

^[28]  Coca-Cola Bottlers Phils. Inc. v. Daniel, G.R. No. 156893, June 21, 2005, 460 SCRA 494, 512.

^[29]  Eastern Telecommunications Phils., Inc. v. Diamse, G.R. No. 169299, June 16, 2006, 491 SCRA 239, 251.

^[30]  G.R. No. 162538, June 4, 2009, 588 SCRA 238, 247-248.

^[31]  Id. at 247-248, citing Santos v. NLRC, 154 SCRA 166, 171-173.