Alilem Credit Cooperative, Inc. v. Salvador M. Bandiola, Jr.
**Facts:**
1. **Employment and Allegations:**
– **Respondent Employment**: Salvador M. Bandiola, Jr. was employed as a bookkeeper by Alilem Credit Cooperative, Inc. (later known as Alilem Multipurpose Cooperative, Inc.).
– **Accusation**: The Board of Directors received a letter from Napoleon Gao-ay alleging immoral conduct by Bandiola involving an illicit relationship with Thelma G. Palma, Napoleon’s sister.
2. **Preliminary Investigation:**
– **Reported Evidence**:
1. Melanie Gao-ay witnessed respondent engage in intimacy with Thelma in December 1996.
2. Rosita Tegon’s statement observed interactions between Thelma and respondent in May 1997.
3. Emma Gao-ay Lubrin (Thelma’s sister) and Napoleon claimed Thelma admitted to the affair.
3. **Ad Hoc Committee Investigation:**
– Additional testimonies from:
1. Agustina Boteras (witnessed confrontation with Thelma).
2. Milagros Villacorte (saw respondent with Thelma at a hospital).
3. Julienne Marie L. Dalangey’s certification about a seminar where respondent introduced a woman as his wife, who was not his actual wife.
4. **Respondent’s Defense:**
– **Denial**: Respondent denied the accusations and attributed them to jealousy from cooperative members.
– **Thelma’s Affidavit**: Denied the allegations of an affair.
5. **Board Decision and Subsequent Actions:**
– **Termination Notice**: On July 10, 1997, the Board informed Bandiola of a prima facie case against him.
– **Hearing Request Denied**: Respondent’s request for postponement was denied, and the hearing proceeded without his lawyer.
– **Dismissal**: Effective July 31, 1997, Bandiola was terminated.
6. **Legal Procedures:**
– **Complaint for Illegal Dismissal**: Bandiola filed with the NLRC.
– **Labor Arbiter Decision**: Dismissed the complaint, siding with the cooperative’s evidence and finding due process followed.
– **NLRC Appeal**: Overturned the LA’s decision, ruled the Personnel Policy questionable, and found procedural violations.
– **CA Decision**: Identified misconduct but did not see it as sufficient for termination outside job performance.
– **Petition to Supreme Court**: Cooperative filed petition challenging CA decision.
**Issues:**
1. **Validity of Personnel Policy:**
– Whether the cooperative’s Personnel Policy, which includes extramarital affairs as grounds for dismissal, was valid.
2. **Due Process:**
– Whether procedural due process was observed in respondent’s termination.
3. **Misconduct as Ground for Termination:**
– Whether engaging in extramarital affairs constitutes serious misconduct justifying termination even if unrelated to job duties.
**Court’s Decision:**
1. **Personnel Policy Validity:**
– SC ruled that the old and new Personnel Policy grounds were substantively similar. Extramarital conduct can bring discredit to the cooperative, making Bandiola’s dismissal valid.
2. **Due Process Observed:**
– SC found that adequate procedural due process was followed. Respondent was provided opportunities to explain and defend himself, including potential assistance by counsel.
3. **Conduct as Grounds for Termination:**
– SC recognized that respondent’s behavior, even if personal, brought discredit to the cooperative as supported by witness testimonies and member petitions. Therefore, termination was justified.
**Doctrine:**
1. **Employer’s Management Prerogative:**
– Employers have the right to implement reasonable rules and regulations, and violations can be grounds for termination if made known to employees.
2. **Due Process in Dismissal:**
– Two written notices are required for lawful termination: one specifying charges and another informing the decision after considering the employee’s explanation.
**Class Notes:**
– **Key Elements/Concepts:**
– Employer’s managerial prerogative.
– Procedural due process in termination.
– “Serious misconduct” and its applicability in employment law.
– Grounds for termination under Personnel Policies must be valid and known risks.
– **Relevant Legal Statutes:**
– **Article 282 of the Labor Code**: Establishes grounds for termination.
– **Due Process Requirements**: Written notices and opportunity to be heard.
**Historical Background:**
– **Context**: This case comes at a time where labor rights and organizational reputations are critically balanced. It highlights evolving considerations of employer prerogatives against employee personal conduct and procedural safeguards in employment disputes in the Philippines.
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