Republic of the Philippines

Supreme Court
Baguio City

THIRD DIVISION

QUIRICO LOPEZ,
Petitioner,

- versus

ALTURAS GROUP OF COMPANIES and/or MARLITO UY,

Respondents.
G.R. No. 191008
Present:

CARPIO MORALES,
Chairperson, J.,
BRION,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.

Promulgated:

April 11, 2011

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:

Quirico Lopez (petitioner) was hired by respondent Alturas Group of Companies in

1997 as truck driver. Ten years later or sometime in November 2007, he was
dismissed after he was allegedly caught by respondents security guard in the act of
attempting to smuggle out of the company premises 60 kilos of scrap iron worth
P840 aboard respondents Isuzu Cargo Aluminum Van with Plate Number PHP 271
that was then assigned to him. When questioned, petitioner allegedly admitted to
the security guard that he was taking out the scrap iron consisting of lift springs out
of which he would make axes.

Petitioner, in compliance with the Show Cause Notice[1] dated December 5, 2007
issued by respondent companys Human Resource Department Manager, denied the
allegations by a handwritten explanation written in the Visayan dialect.

Finding petitioners explanation unsatisfactory, respondent company terminated his

employment by Notice of Termination[2] effective December 14, 2007 on the
grounds of loss of trust and confidence, and of violation of company rules and
regulations. In issuing the Notice, respondent company also took into account the
result of an investigation showing that petitioner had been smuggling out its cartons
which he had sold, in conspiracy with one Maritess Alaba, for his own benefit to thus
prompt it to file a criminal case for Qualified Theft[3] against him before the
Regional Trial Court (RTC) of Bohol. It had in fact earlier filed another criminal case
for Qualified Theft[4] against petitioner arising from the theft of the scrap iron.

Petitioner thereupon filed a complaint against respondent company for illegal

dismissal and underpayment of wages. He claimed that the smuggling charge
against him was fabricated to justify his illegal dismissal; that the filing of the
charge came about after he reported the loss of the original copy of his pay slip,
which report, he went on to claim, respondent company took to mean that he could
use the pay slip as evidence for filing a complaint for violation of labor laws; and
that on account of the immediately stated concern of respondent, it forced him into
executing an affidavit that if the pay slip is eventually found, it could not be used in
any proceedings between them.

By Decision[5] of June 30, 2008, the Labor Arbiter, holding that the pendency of the
criminal case involving the scrap iron did not warrant the suspension of the
proceedings before him, held that petitioners dismissal was justified, for he, a truck
driver, held a position of trust and confidence, and his act of stealing company
property was a violation of the trust reposed upon him.

Respecting the charge of underpayment of wages, the Labor Arbiter noted that on
the basis of the records, petitioner had been paid the correct wages and benefits
mandated by law.

The Labor Arbiter accordingly dismissed petitioners complaint.

On appeal, the National Labor Relations Commissions (NLRC) Fourth Division (Cebu
City) set aside the Labor Arbiters Decision by Decision[6] dated December 22, 2008,
finding that respondents evidence did not suffice to warrant the termination of
petitioners services; and that petitioners alleged admission of taking the scrap iron
was belied by his vehement denial, as even the security guard, one Gerardo Luega,
who allegedly witnessed the asportation and before whom the alleged admission
was made, did not even execute an affidavit in support thereof.

Citing Salaw v. NLRC,[7] the NLRC went on to hold that petitioner should have been
afforded, or at least advised of the right to counsel. It thus held that any evaluation
which was based only on the explanation to the show-cause letter and any so-called
investigation but without confrontation of the vital witnesses, do[es] not suffice.

Respondent companys motion for reconsideration was denied by Resolution[8] of

April 30, 2009, hence, it appealed to the Court of Appeals.

By Report[9] of December 18, 2009, the appellate court reversed the NLRC ruling. It
held that respondent company was justified in terminating petitioners employment
on the ground of loss of trust and confidence, his alleged act of smuggling out the
scrap iron having been sufficiently established through the affidavits of Patrocinio
Borja and Zalde Tare, supervisor and junior supervisor, respectively, of its
Supermarket Motorpool.

The appellate court further held that the evidence supporting the criminal charge,
found after preliminary investigation are [sic] sufficient to show prima facie guilt,
which constitutes just cause for [petitioners dismissal] based on loss of trust and
confidence; and that petitioners subsequent acquittal in the criminal case did not
automatically preclude a determination that he is guilty of acts inimical to the
employers interest resulting in loss of trust and confidence.

Albeit the appellate court found that petitioners dismissal was for a just cause, it
held that due process was not observed when respondent company failed to give
him a chance to defend his side in a proper hearing. Following Agabon v. NLRC,[10]
the appellate court thus ordered respondent to pay nominal damages of P30,000.

Thus the appellate court disposed:

WHEREFORE, in view of the foregoing, the Decision of the NLRC dated December
22, 2008 is hereby MODIFIED. Private respondents dismissal from employment is
upheld on the ground of loss of trust and confidence, a just cause for termination.
However, for failure to comply fully with the procedural due process, petitioner is
ORDERED to pay private respondent the amount of P30,000.00 as nominal
damages.[11] (underscoring supplied)

Hence, the present petition for review on certiorari.

Dismissals have two facets: the legality of the act of dismissal, which constitutes
substantive due process, and the legality of the manner of dismissal which
constitutes procedural due process.[12]

As to substantive due process, the Court finds that respondent companys loss of
trust and confidence arising from petitioners smuggling out of the scrap iron,
conpounded by his past acts of unauthorized selling cartons belonging to
respondent company, constituted just cause for terminating his services.

Loss of trust and confidence as a ground for dismissal of employees covers

employees occupying a position of trust who are proven to have breached the trust
and confidence reposed on them. Apropos is Cruz v. Court of Appeals[13] which
explains the basis and quantum of evidence of loss of trust and confidence, viz:

In addition, the language of Article 282(c) of the Labor Code states that the loss of
trust and confidence must be based on willful breach of the trust reposed in the
employee by his employer. Such breach is willful if it is done intentionally,
knowingly, and purposely, without justifiable excuse, as distinguished from an act
done carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it must be
based on substantial evidence and not on the employers whims or caprices or
suspicions otherwise, the employee would eternally remain at the mercy of the
employer. Loss of confidence must not be indiscriminately used as a shield by the
employer against a claim that the dismissal of an employee was arbitrary. And, in
order to constitute a just cause for dismissal, the act complained of must be workrelated and shows that the employee concerned is unfit to continue working for the
employer. In addition, loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned holds a position
of responsibility, trust and confidence or that the employee concerned is entrusted
with confidence with respect to delicate matters, such as the handling or care and
protection of the property and assets of the employer. The betrayal of this trust is
the essence of the offense for which an employee is penalized. (emphasis and
underscoring supplied)

Petitioner, a driver assigned with a specific vehicle, was entrusted with the
transportation of respondent companys goods and property, and consequently with
its handling and protection, hence, even if he did not occupy a managerial position,
he can be said to be holding a position of responsibility. As to his actprincipal ground
for his dismissal his attempt to smuggle out the scrap iron belonging to respondent
company, the same is undoubtedly work-related.

Respondent companys charge against petitioner was amply proven by substantial

evidence consisting of the affidavits of various employees of respondent. Contrary
to the NLRCs observation, the security guard who apprehended petitioner, Gerardo
Luega, actually executed a statement[14] relative to the smuggling out of scrap
iron, which was attached to, and served as basis for the filing of, the corresponding
complaint for Qualified Theft. Petitioners claim that he was framed up after he
allegedly lost his pay slip to draw respondent company to suspect that he might file
a labor complaint for underpayment does not inspire credence.

It is, however, with respect to the appellate courts finding that petitioner was not
afforded procedural due process that the Court deviates from. Procedural due
process has been defined as giving an opportunity to be heard before judgment is
rendered.[15] In termination cases, Perez v. Philippine Telegraph and Telephone
Company,[16] illuminates on the correct proceedings to be followed therein in order
to comply with the due process requirement:

The above rulings are a clear recognition that the employer may provide an
employee with ample opportunity to be heard and defend himself with the
assistance of a representative or counsel in ways other than a formal hearing. The
employee can be fully afforded a chance to respond to the charges against him,
adduce his evidence or rebut the evidence against him through a wide array of
methods, verbal or written.

After receiving the first notice apprising him of the charges against him, the
employee may submit a written explanation (which may be in the form of a letter,
memorandum, affidavit or position paper) and offer evidence in support thereof, like
relevant company records (such as his 201 file and daily time records) and the
sworn statements of his witnesses. For this purpose, he may prepare his explanation
personally or with the assistance of a representative or counsel. He may also ask
the employer to provide him copy of records material to his defense. His written
explanation may also include a request that a formal hearing or conference be held.
In such a case, the conduct of a formal hearing or conference becomes mandatory,
just as it is where there exist substantial evidentiary disputes or where company
rules or practice requires an actual hearing as part of employment pretermination
procedure. (emphasis and underscoring supplied)

Petitioner was given the opportunity to explain his side when he was informed of the
charge against him and required to submit his written explanation with which he
complied. That there might have been no hearing is of no moment, for as Autobus
Workers Union v. NLRC[17] holds:

This Court has held that there is no violation of due process even if no hearing was
conducted, where the party was given a chance to explain his side of the
controversy. What is frowned upon is the denial of the opportunity to be heard.
(emphasis supplied)

Parenthetically, the Court finds that it was error for the NLRC to opine that petitioner
should have been afforded counsel or advised of the right to counsel. The right to
counsel and the assistance of one in investigations involving termination cases is
neither indispensable nor mandatory, except when the employee himself requests
for one or that he manifests that he wants a formal hearing on the charges against
him. In petitioners case, there is no showing that he requested for a formal hearing
to be conducted or that he be assisted by counsel. Verily, since he was furnished a
second notice informing him of his dismissal and the grounds therefor, the twinnotice requirement had been complied with to call for a deletion of the appellate
courts award of nominal damages to petitioner.

As for the subsequent dismissal of the criminal cases[18] filed against petitioner,
criminal and labor proceedings are distinct and separate from each other. Each
requires a different quantum of proof, arising though they are from the same set of
facts or circumstances. As Vergara v. NLRC[19] holds:

An employees acquittal in a criminal case does not automatically preclude a

determination that he has been guilty of acts inimical to the employers interest
resulting in loss of trust and confidence. Corollarily, the ground for the dismissal of
an employee does not require proof beyond reasonable doubt; as noted earlier, the
quantum of proof required is merely substantial evidence. More importantly, the
trial court acquitted petitioner not because he did not commit the offense, but
merely because of the failure of the prosecution to prove his guilt beyond
reasonable doubt.. In other words, while the evidence presented against petitioner
did not satisfy the quantum of proof required for conviction in a criminal case, it
substantially proved his culpability which warranted his dismissal from employment.
(emphasis supplied)

WHEREFORE, the petition is DENIED. The Report dated December 18, 2009 of the
Court of Appeals dismissing petitioners complaint is AFFIRMED with MODIFICATION
in that the award of nominal damages in the amount of P30,000 is DELETED.

Costs against petitioner.

SO ORDERED.
CONCHITA CARPIO MORALES
Associate Justice

WE CONCUR:

ARTURO D. BRION
Associate Justice

LUCAS P. BERSAMIN
Associate Justice

MARTIN S. VILLARAMA, JR.

Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

CONCHITA CARPIO MORALES

Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, I certify that the conclusions in the above decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

RENATO C. CORONA

Chief Justice

[1] Records, p. 24.

[2] Id. at 25.
[3] Id. at 82.
[4] Id. at 88.
[5] Records, pp. 122-126. Penned by Labor Arbiter Fructuoso Villarin, IV.
[6] Records, pp. 219-221. Penned by Presiding Commissioner Violeta Ortiz-Bantug
and concurred in by Commissioners Oscar S. Uy and Aurelio D. Menzon.
[7] G.R. No. 90786, September 27, 1991, 202 SCRA 7.
[8] Records, pp. 280-281. Penned by Presiding Commissioner Violeta Ortiz-Bantug
and concurred in by Commissioners Oscar S. Uy and Aurelio D. Menzon.
[9] Rollo, pp. 325-333. Penned by Associate Justice Amy C. Lazaro-Javier and
concurred in by Associate Justices Rodil V. Zalameda and Agnes Reyes-Carpio.
[10] G.R. No. 158693, November 17, 2004, 442 SCRA 573,
[11] CA rollo, p. 315.
[12] Tirazona v. Court of Appeals, G.R. No. 169712, March 14, 2008.
[13] G.R. No. 148544, July 12, 2006.
[14] Philtread Tire and Rubber Corp. v.Vicente, G.R. No. 142759, 10 November 2004,
441 SCRA 574, 581.
[15] Cruz v. Coca-Cola Bottlers Phils., Inc., G.R. No. 165586, 15 June 2005, 460 SCRA
340, 351.
[16] G.R. No. 152048, April 7, 2009.
[17] 353 Phil. 419.
[18] Vide Resolution dated June 12, 2008 re I.S. Case No. 2008-97 for Qualified Theft
of the Cartons, records, pp. 149-152.
[19] G.R. No. 117196, December 5, 1997.