Buenaflor Car Services v. David, November 7, 2016 (technical rules)

 
Assailed in this petition for review on certiorari finding respondent Cezar Durumpili David, Jr. (respondent) to have been illegally dismissed, and holding petitioner Buenaflor Car Services, Inc. (petitioner) solely liable for the monetary award. Respondent was employed as Service Manager by petitioner, doing business under the trade name “Pronto! Auto Services”. In such capacity, he was in charge of the overall day-to-day operations of petitioner, including the authority to sign checks, check voucher, and purchase orders. In the course of petitioner’s business, with respect to the purchase and delivery of automotive parts and products, it was company policy that all checks should be issued in the name of the specific supplier and not in “cash”, and that said checks are to be picked up from the petitioner’s accounting assistant, Marilyn A. Del Rosario, at the company’s office in Muntinlupa City.
 
On August 8, 2013, Chief Finance Officer Cristina S. David of petitoner’s affiliate company, Diamond IGB, Inc., received a call from the branch manager of ChinaBank, SM City Bicutan Branch, informing her that the latter had cleared several checks issued by petitioner bearing the words “OR CASH” indicated after the payee’s name. An investigation was conducted thereafter. On August 22, 2013, petitioner, through its president, Exequiel Lampa, along with Helen Lee, Human Resource Manager, confronted Del Rosario on the questioned checks. Del Rosario readily confessed that upon respondent’s instruction, she inserted the words “OR CASH” after the name of the payees when the same had been signed by all the authorized signatories. Along with respondent, Del Rosario also implicated De Guzman, Purchasing Officer, and Caranto, petitioner’s messenger/driver, who she alleged, were also under the respondent’s direct supervision and co-conspirators. Del Rosario’s confession was put into writing in two (2) separate letters both of even date. (Extrajudicial Confession) The ensuing investigation revealed that there were 27 checks with the words “OR CASH”, all signed by respondent in the total amount of P1,021,561.72. As a result, respondent, together with Del Rosario, De Guzman, and Caranto, were placed under preventive suspension for a period of 30 days and directed to submit their respective written explanations. Respondent, for his part, vehemently denied the charges against him. He claimed that he has no control over the company’s finance and billing operations, nor the authority to instruct Del Rosario to make any check alterations, without the permission and authority of either Buenaflor, vice-president of operations, or Vasay, Chief Finance Officer.
 
On September 20, 2013, respondent and his co-workers were served with their respective notices of termination after having been found guilty of violating the company’s code of conduct and behavior, particularly serious misconduct and willful breach of trust. Respondent, De Guzman, and Caranto filed a complaint for illegal dismissal with prayer for reinstatement and payment of damages and attorney’s fees against petitioners and Buenaflor. In the meantime, Lee, on behalf of petitioner, filed a criminal complaint for 27 counts of Qualified Theft through Falsification of Commercial Documents against respondent, De Guzman, Caranto and Del Rosario, supported by Buenaflor and Vasay’s affidavits attesting that the checks they signed did not bear the words “OR CASH”, and that they did not authorize its insertion after the payee’s name. Respondent, De Guzman, Caranto, and Del Rosario were indicted. LABOR ARBITER RULING: In a decision dated September 29, 2014, The Labor Arbiter ruled that respondent, De Guzman, and Caranto were illegally dismissed, and consequently, awarded backwages, separation pay and attorney’s fees.
 
The LA observed that petitioner failed to establish existence of conspiracy among respondent, De Guzman, Caranto and Del Rosario in altering the checks and that the latter’s extrajudicial confession was informally made and not supported by evidence. Petitioner appealed this decision to the NLRC. NLRC RULING: In a decision dated November 28, 2014, the NLRC affirmed with modification the LA’s decision, finding that De Guzman and Caranto have been dismissed for cause, but sustained the illegality of respondent’s termination from work. NLRC held that since De Guzman prepared the purchase orders, and Caranto encashed the checks despite knowledge of the company policy, they could not be discounted from the scheme. Having his motion for partial reconsideration denied, petitioner appealed to the Court of Appeals. COURT OF APPEALS RULING: CA found no grave abuse of discretion on the part of the NLRC in holding that respondent was illegally dismissed. CA ruled that Del Rosario’s extrajudicial confession only bound her as confessant but constitutes hearsay with respect to respondent and the other co-accused. CA noted that at the time the checks were signed by respondent, the words “OR CASH” were not yet written on thereon.
 
Issue:
Whether substantial evidence is only needed to prove the validity of the dismissal?

Held:
Yes. Substantial evidence is only needed in proving the validity of a dismissal in a labor suit. In the case at bar, Court of Appeals committed reversible error in upholding the NLRC’s ruling that respondent was illegally dismissed. SUPREME COURT RULING: The petition is meritorious.
 
Article 297 of the Labor Code, as renumbered, enumerates the just causes for termination of an employee, to wit: ART. 297. Termination by Employer. An Employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in conncetion with his work (b) Gross and habitual neglect by the employee of his duties (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (e) Other causes analogous to the foregoing. The respondent’s termination was grounded on his violation of petitioner’s code of conduct and behaviour, which was supposedly tantamount to (a) Serious Misconduct and/or (b) willful breach of trust reposed in him by his employer.
 
Petitioner’s claims was hinged on respondent’s alleged directive to petitioner’s accounting assistant, Del Rosario, to insert the word “OR CASH” in the checks payable to the suppliers. While the respondent denies these allegations, but, given his position of trust, although his statements may be true, the court observes that it is highly unlikely that respondent did not have any participation in the above-mentioned scheme to defraud petitioner. No checks would have been issued if no purchase orders were made, which the respondent must approve before the payment process can even commence. Case law states that “Labor suits require only substantial evidence to prove the validity of the dismissal.” Based on such, the court is convinced that substantial evidence exists to support petitioner’s allegations against respondent.
 
The Doctrine of Independently Relevant Statements was the basis of SC in considering the extrajudicial confessions of Del Rosario as more than mere hearsay and is highly relevant to the issue of the case. Petition Granted. Respondent is held to be validly dismissed, and thus, not entitled to backwages, separation pay, as well as attorney’s fees.