ATLAS FARMS, INC., petitioner, vs.

  NATIONAL LABOR RELATIONS

COMMISSION, JAIME O. DELA PEA and MARCIAL I.
ABION, respondents.
[G.R. No. 142244. November 18, 2002]

FACTS:

Private respondent Jaime O. dela Pea was employed as a veterinary aide by

petitioner, Atlas Farms, Inc. He was among several employees terminated and
was re-hired by petitioner and given the additional job of feedmill operator,
where he train selected workers to operate the feedmill.

The farm manager of petitioner suddenly issued a formal notice directing him
to explain within 24 hours why disciplinary action should not be taken against
him for violating company rules and regulations. Pea was allegedly caught
urinating and defecating on company premises not intended for the purpose. 
Pea refused, however, to receive the formal notice. He never bothered to
explain, either verbally or in writing Thus, a notice of termination with payment
of his monetary benefits was sent to him. He duly acknowledged receipt of his
separation pay.

In the case of co-respondent Marcial I. Abion, the latter was a

carpenter/mason and a maintenance man whose. Allegedly, he caused the
clogging of the fishpond drainage resulting in damages worth several hundred
thousand pesos when he improperly disposed of the cut grass and other waste
materials into the ponds drainage system. Petitioner also sent a written notice to
Abion, requiring him to explain what happened, otherwise, disciplinary action
would be taken against him. Like Pea, Marcial refused to receive the notice and
give an explanation. Consequently, the company terminated his services. He
acknowledged receipt of a written notice of dismissal, with his separation pay.

Pea and Abion filed separate complaints for illegal dismissal that were later
consolidated. Both claimed that their termination from service was due to
petitioners suspicion that they were the leaders in a plan to form a union to
compete and replace the existing management-dominated union.

The labor arbiter dismissed their complaints on the ground that the
grievance machinery in the collective bargaining agreement (CBA) had not yet
been exhausted. Private respondents availed of the grievance process, but later
on refiled the case before the NLRC in Region IV. They alleged lack of sympathy
on petitioners part to engage in conciliation proceedings.
 Their cases were consolidated in the NLRC. At the initial mandatory
conference, petitioner filed a motion to dismiss, on the ground of lack of
jurisdiction, alleging private respondents themselves admitted that they were
members of the employees union with which petitioner had an existing CBA. This
being the case, according to petitioner, jurisdiction over the case belonged to the
grievance machinery and thereafter the voluntary arbitrator, as provided in the
CBA.

The labor arbiter dismissed the complaint for lack of merit, finding that the
case was one of illegal dismissal and did not involve the interpretation or
implementation of any CBA provision. He stated that Article 217 (Now art. 224)
of the Labor Code was inapplicable to the case. Further, the labor arbiter found
that although both complainants did not substantiate their claims of illegal
dismissal, there was proof that private respondents voluntarily accepted their
separation pay and petitioners financial assistance.

Thus, private respondents brought the case to the NLRC, which reversed the
labor arbiters decision. Dissatisfied with the NLRC ruling, petitioner went to the
Court of Appeals by way of a petition for review on certiorari under Rule 65,
seeking reinstatement of the labor arbiters decision. The appellate court denied
the petition and affirmed the NLRC resolution.

ISSUE:

1) whether private respondents were legally and validly dismissed;

2) whether the labor arbiter and the NLRC had jurisdiction to decide
complaints for illegal dismissal; and

3) whether petitioner is liable for costs of the suit.

HELD:

1. The burden of proving that the dismissal of private respondents was legal
and valid falls upon petitioner. The NLRC found that petitioner failed to
substantiate its claim that both private respondents committed certain
acts that violated company rules and regulations, hence there is no
factual basis to say that private respondents dismissal was in
order. There is no compelling reason to deviate from the NLRC ruling that
their dismissal was illegal, absent a showing that it reached its conclusion
arbitrarily. Moreover, factual findings of agencies exercising quasi-judicial
 functions are accorded not only respect but even finality, aside from the
consideration here that this Court is not a trier of facts.  

2. Anent the second issue, Article 217 (now art. 224) of the Labor Code
provides that labor arbiters have original and exclusive jurisdiction over
termination disputes. A possible exception is provided in Article 261 (now
art. 274) of the Labor Code. The instant case is a termination dispute
falling under the original and exclusive jurisdiction of the Labor Arbiter,
and does not specifically involve the application, implementation or
enforcement of company personnel policies contemplated in Policy
Instruction No. 56.Consequently, Policy Instruction No. 56 does not apply
in the case at bar.

Records show, however, that private respondents sought without

success to avail of the grievance procedure in their CBA. However, it is
worth pointing out that Private respondents went to the NLRC only after
the labor arbiter dismissed their original complaint for illegal
dismissal. Under these circumstances private respondents had to find
another avenue for redress.  It was petitioner who failed to show proof
that it took steps to convene the grievance machinery after the labor
arbiter first dismissed the complaints for illegal dismissal and directed the
parties to avail of the grievance procedure under Article VII of the existing
CBA. They could not now be faulted for attempting to find an impartial
forum, after petitioner failed to listen to them and after the intercession of
the labor arbiter proved futile. The NLRC had aptly concluded in part that
private respondents had already exhausted the remedies under the
grievance procedure. It erred only in finding that their cause of action was
ripe for arbitration.

Pursuant to Article 260 (now Art. 273) of the Labor Code, the
parties to a CBA shall name or designate their respective representatives
to the grievance machinery and if the grievance is unsettled in that level,
it shall automatically be referred to the voluntary arbitrators designated in
advance by the parties to a CBA. Consequently only disputes involving the
union and the company shall be referred to the grievance machinery or
voluntary arbitrators. In these termination cases of private respondents,
the union had no participation, it having failed to object to the dismissal of
the employees concerned by the petitioner. It is obvious that arbitration
without the unions active participation on behalf of the dismissed
employees would be pointless, or even prejudicial to their cause.

Coming to the merits of the petition, the NLRC found that petitioner
did not comply with the requirements of a valid dismissal. For a dismissal
to be valid, the employer must show that: (1) the employee was accorded
due process, and (2) the dismissal must be for any of the valid causes
provided for by law. No evidence was shown that private respondents
refused, as alleged, to receive the notices requiring them to show cause
why no disciplinary action should be taken against them. Without proof of
notice, private respondents who were subsequently dismissed without
hearing were also deprived of a chance to air their side at the level of the
grievance machinery. Given the fact of dismissal, it can be said that the
cases were effectively removed from the jurisdiction of the voluntary
arbitrator, thus placing them within the jurisdiction of the labor
arbiter. Where the dispute is just in the interpretation, implementation or
enforcement stage, it may be referred to the grievance machinery set up
in the CBA, or brought to voluntary arbitration. But, where there was
already actual termination, with alleged violation of the employees rights,
it is already cognizable by the labor arbiter.

In sum, we conclude that the labor arbiter and then the NLRC had
jurisdiction over the cases involving private respondents dismissal, and no
error was committed by the appellate court in upholding their assumption
of jurisdiction.

As a consequence of their illegal dismissal, private respondents are

entitled to reinstatement to their former positions. But since reinstatement
is no longer feasible because petitioner had already closed its shop,
separation pay in lieu of reinstatement shall be awarded. A terminated
employees receipt of his separation pay and other monetary benefits does
not preclude reinstatement or full benefits under the law, should
reinstatement be no longer possible. Acceptance of those benefits would
not amount to estoppel.
 VIRGILIO S. CARIÑO petitioner,  vs. NATIONAL LABOR RELATIONS
COMMISSION, HARRISON INDUSTRIAL CORPORATION and HARRISON
INDUSTRIAL WORKERS' UNION, respondents.
G.R. No. 91086 May 8, 1990

FACTS:

Petitioner Cariño was the former President of private respondent Harrison

Industrial Workers' Union ("Union"). Because he was widely believed to have
grossly mismanaged Union affairs, the other officers of the Union formed an
investigating committee and several times invited petitioner Cariño to answer the
complaints and charges against him.

1. Conspiring with the company during the negotiation of the CBA, resulting in,
among other things, Article 22 entitled "Retirement" which provided for
retirement pay of one (1) day's basic salary for every year of service.
2. Paying attorney's fees to Atty. Federico Leynes, Union counsel, out of Union
funds without obtaining corresponding receipts therefor.
3. Unilaterally increasing the membership dues by an additional P17.00 per
member in order to pay increased attorney's fees.
4. Concealing the CBA, failure to present and to explain the provisions of the
same prior to ratification by the union membership.
5. Refusal to turn over the custody and management of Union funds to the Union
treasurer.

Petitioner Cariño, however, failed to respond to the calls or invitations

made by the investigating committee. Finally, the investigation committee caged
a general membership meeting where the charges against petitioner were
presented and discussed and the Union decided to file a petition for special
election of its officers.

A petition for special election of officers was filed by the Union with the
Bureau of Labor Relations, Department of Labor and Employment. Several
hearings were field at the BLR always with due notice to petitioner Cariño
petitioner, however, failed to appear even once.

A general Union membership meeting was then held for the impeachment
of Cariño. The general membership found Cariño guilty of the above-mentioned
charges and decided to expel him from the Union and to recommend his
termination from employment. Accordingly, they informed private respondent
Harrison Industrial Corporation ("Company") of the expulsion of petitioner Cariño
from the Union and demanded application of the Union Security Clause of the
then existing Collective Bargaining Agreement (CBA). Petitioner Cariño received a
letter of termination from the Company, effective the next day.

Petitioner Cariño, now represented by Atty. Leynes, the former lawyer of

the Union, filed a complaint for illegal dismissal with the Labor Arbiter.

The Labor Arbiter held that there was no just cause for the dismissal of
petitioner Cariño, none of the causes for suspension or dismissal of Union
members enumerated in the Union's Constitution and By-Laws being applicable
to petitioner's situation. The Labor Arbiter also held that the manner of
petitioner's dismissal had been in disregard of the requirements of notice and
hearing laid down in the Labor Code. The Labor Arbiter ordered petitioner's
reinstatement with full backwages and payment of attorney's fees, the monetary
liability to be borne solidarily by the Company and the Union.

The Company and the Union went on appeal before the public respondent
National Labor Relations Commission (NLRC).

The NLRC held Cariño's silence as "tantamount to [an] admission of guilt"

and as constituting the ultimate cause for his dismissal. However, the NLRC
agreed with the Labor Arbiter's finding that the manner of petitioner Cariño's
dismissal was inconsistent with the requirements of due process. The NLRC
accordingly found the Company and the Union solidarily liable, "by way of
penalty and financial assistance", to petitioner Cariño for payment of separation
pay, at the rate of one-half (1/2) month's salary for each year of service.

In the instant Petition for Certiorari, petitioner Cariño basically seeks

reinstatement of the Decision of the Labor Arbiter.

ISSUE:

1. Whether or not NLRC erred in taking cognizance of the Union's admittedly

late appeal.

2. Whether or not petitioner Cariño had been deprived of  procedural due

process on the union level in view of alleged failure to comply with the
required procedure, governing impeachment and recall proceedings set
out in Article XVI, Section 2, of the Constitution of the Union.

3. Whether or not the company acted in bad faith in dismissing the petitioner
workers without giving them an opportunity to present their side in their
controversy with their own union.
HELD:

1. In the instant case, the NLRC could take cognizance of the late appeal of
the Union, considering that the lawfulness of petitioner Cariño's dismissal
by the Company could be determined only after ascertaining, among other
things, the validity of the Union's act of expelling Cariño from its
membership. In other words, the Company having seasonably appealed
the Labor Arbiter's Decision and the Company's and the Union's liability
being closely intertwined the NLRC could properly take account of the
Union's appeal even though not seasonably filed.

2. The NLRC in effect held that there had been just cause for petitioner
Cariño's dismissal. The Court considers that the NLRC was correct in so
holding.

It is true that the impeachment of Cariño had not been initiated by

a formal petition or resolution signed by at least thirty percent (30%) of
an the bona fide members of the Union. A general meeting had, however,
been called to take up the charges against petitioner Carino who had been
given multiple opportunities to defend himself before the investigating
committee of the Union officers and before the general Union members as
well as before the Bureau of Labor Relations. Petitioner Cariño, however,
chose to disregard all calls for him to appear and defend himself. At the
general membership meeting, therefore, petitioner Cariño was impeached
and ordered recalled by unanimous  vote of the membership. Under these
circumstances, failure to comply literally with step (a) of Article XVI
Section 2 of the Union's Constitution must be regarded as non-material:
the prescribed impeachment and recall proceeding had been more than
substantially complied with.

3. The Court stressed the requirement of good faith on the part of the
company in dismissing the complainant and in effect held that precipitate
action in dismissing the complainant is indication of lack of good faith. The
Company had failed to accord to petitioner Cariño the latter's right to
procedural due process. The right of an employee to be informed of the
charges against him and to reasonable opportunity to present his side in a
controversy with either the Company or his own Union, is not wiped away
by a Union Security Clause or a Union Shop Clause in a CBA. An employee
is entitled to be protected not only from a company which disregards his
rights but also from his own Union the leadership of which could yield to
the temptation of swift and arbitrary expulsion from membership and
hence dismissal from his job.
 The Court does not believe, however, that the grant of separation
pay to petitioner Cariño was an appropriate response (there having been
just cause for the dismissal) to the failure of the Company to accord him
his full measure of due process. Since petitioner Cariño had clearly
disdained answering the charges preferred against him within the Union,
there was no reason to suppose that if the Company had held formal
proceedings before dismissing him, he would have appeared in a
Company investigation and pleaded his defenses, if he had any, against
the charges against him. There was no indication that the Company had in
fact conspired with the Union to bring about the expulsion and dismissal
of petitioner Cariño indeed, the Union membership believed it was Cariño
who had conspired with the company in the course of negotiating the
CBA. Considering all the circumstances of this case, and considering
especially the nature of the charges brought against petitioner Cariño
before his own Union, the Court believes that a penalty of P5,000 payable
to petitioner Carino should be quite adequate, the penalty to be borne by
the Company and the Union solidarily. The Court also considers that
because the charges raised against petitioner and unanswered by him
have marked overtones of dishonesty, this is not a case where "financial
(humanitarian) assistance" to the dismissed employee is warranted.