GOVERNMENT SERVICE INSURANCE SYSTEM, PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS AND PEDRO OLASE, RESPONDENTS. PEDRO OLASE, PETITIONER, VS. GSIS AND THE COURT Of INDUSTRIAL RE…

The above-entitled cases are the separate appeals of the Government
Service Insurance System (hereinafter called the GSIS) and Pedro Olase,
respectively, from a decision of the Court of Industrial Relations in
its Case No. 896-V (2), the dispositive part of which is as follows:

IN
VIEW OF ALL THE FOREGOING, this Court finds no substartial evidence to
support respondent’s accusation that Olase committed the swindle and
that the investigation and administrative proceedings conducted by
respondent’s officials fall short of the due process as provided for
under Executive Order No. 370. The Court, therefore, orders the
respondent Government Service Insurance System, its general manager and
agents, jointly and severally to reinstate Pedro Olase to his former
position. With respect to the petitioner-movant’s claim for back wages,
it is believed that the same cannot be granted in view of the fact that
the dismissal was not motivated by malice but done in good faith.
Although there might have been a bad judgment on the part of respondent
in dismissing petitioner-movant, yet this judgment was based on its
honest belief that petitioner-movant committed the act. The court also
orders respondent, its general manager and agents, to post a copy of
this order in two conspicuous places in the premises of respondent
within a period of thirty (30) days and thereafter shall inform this
Court from time to time compliance with the same.”

Said
Court of Industrial Relations Case No. 896-V (2), originated as
follows: On June 17, 1953, the GSIS Employees Association declared a
strike for failure of the GSIS to grant its demands. Nos. 2. (adoption
of a scale of salaries with a minimum monthly of P200, to take effect
on July 1, 1953); 3. (continuance of family allowance and the lifting;
of suspension of its benefits to wives, as a consequence of marriage,
and to children born on or after July 1, 1952); 4. (free
hospitalization and medicine in case of sickness of the employee or the
immediate members of his family); 5. (50 per cent of salary payable
during hospitalization after the vacation and sick leave have expired)
; 7. (temporary emergency employees be made permanent by providing them
allocations in the annual budget beginning July 1, 1953); 8. (creation
of position of General Manager at a salary of P19,200 per annum); 9.
(fixing of salary of a General Actuarian at P15,000); etc.

Upon
failure of the System to grant the demands, a general strike took
place, and the case was certified to the Court of Industrial Relations.
The above facts are taken from our G.R. No. L-7175, entitled
“Government Service Insurance System vs. Modesto Castillo, etc.,” (98
Phil., 876; 52 Off. Gaz., [9] 4269) in which we denied a petition of
the GSIS to prohibit respondent Judge Castillo from hearing CIR Case
No. 896-V.

On June 11, 1957, the GSIS Employees Association
filed a petition, to which they gave the name of “incidental motion”,
in Court of Industrial Relations Case No. 896-V, on behalf of its
member Pedro Olase, alleging that said employee was forced to resign
from the GSIS and praying for his immediate reinstatement with pay from
June, 1, 1957, when he was ordered to desist from occupying his
position. The GSIS questioned the jurisdiction of the Court of
Industrial Relations to review the dismissal as an incident of the
original Case No. 896—V, contending that the case of the dismissal of
Olase is not an incident and can not be an incident of the pending
action in the Court of Industrial Relations.

In reply to
the above contention, it was claimed on behalf of Pedro Olase that
there was an order in said Case No. 896-V prohibiting dismissal of
employees during the pendency of the action. The GSIS argued, in reply,
that the dismissal or separation of Olase could not be an incident of
the pending action between the parties. After overruling the motion to
dismiss filed by the GSIS, the court below issued the order already
quoted above.

We find merit in the contention of tne GSIS
that the dismissal of Olase did not arise out of any of the demands
made in the strike. The order of the Court of Industrial Relations not
to dismiss any employee during the pendency of the case then under
consideration must necessarily refer to dismissals occasioned, directly
or indirectly, by the demands under consideration in the case. The
malfeasance of which Olase was charged has absolutely no connection
with the demands of the GSIS Employees Association, hence the GSIS was
not prohibited from dismissing Olase, for the said malfeasance, which
has no relation to any of the demands then pending consideration before
the Court.

Even, though, however, Olase could not file his
petition for reinstatement as an incidental motion in the pending case,
his petition for reinstatement is still cognizable by the Court of
Industrial Relations as he is seeking reinstatement. Prisco vs. CIR (108 Phil., 134). The appeal of the GSIS is, therefore without merit.

With respect to the dismissal of Pedro Olase, the Court of Industrial Relations found the following:

“1. That there was no strong and substantial evidence that Olas©
participated and perpetrated the alleged fraud against Julian Caguite.
The supposed swindle took place in 1953.'”

*          *          *          *          *          *          *

“7.
That the evidence further shows that all the investigations conducted
by respondent, through its investigating officers, were all taken
ex-parte, without due notice to Pedro Olase to appear and the
testimonies taken therein were taken in Olase’s absence.

“From
the beginning, Olase had requested respondent to give him the
opportunity to confront, his accusers but these requests remained
unheeded. Even the recommendation of Ybardolaza, the only investigator
who was able to take the separate individual testimonies of Olase and
Caguite doubted the guilt of Olase, so that he had to recommend that a
confrontation be made, but this was not followed. Another striking
factor was that the report of Ybardolaza was prepared only after the
retraction and subsequent reiteration of the charge by Caguite. This,
in effect, created doubt as to the guilt of Olase in the very mind of
one assigned to investigate the case. The Board of Trustees of
respondent System likewise had its doubts when it passed a resolution
requesting the General Manager to allow the Special Board of Inquiry to
conduct a reihvestigation to allow Olase to be heard but this was never
acted upon.”

“9. Respondent in finding Olase guilty of
tine charge premised in the repeated allegations of Julian Caguite did
not constitute substantial compliance of due process, since such
allegations were taken ex-parte and uncorroborated on any single
material point and, therefore, doubtful, self-serving and improbable.”
(Nos. 1, 7 and 9, pp. 20, 24 and 26, Annex “5”.)

Olase
appeals from the denial to him of back wages, disputing the finding of
the respondent court that the dismissal was made in good faith. During
the first stage dn the administrative proceedings, Olase was given
opportunity to answer, but the investigation that was conducted after
the retraction of the offended party, one by the surname of Caguite,
appears to have been made in the absence of Olase. The members of the
Board proceeded to Tayabas to investigate Caguite, who had made a
retraction, and it was then that Caguite explained that he was paid
P300 in order to make the retraction.

Olase accused the GSIS
of acting in bad faith. The court below held that the suspension by the
GSIS was made in good faith. We find this conclusion to be correct. As
a matter of fact, the proceedings were only defective in one respect,
that is, the fact that Olase was not present at the time the Board of
Inquiry of the GSIS examined Caguite with respect to latter’s
retraction, at which time Caguite reiterated that he made the
retraction upon payment to him of P300.00. At this questioning of
Caguite, Olase was not present, and neither does it appear that he was
given the opportunity to disprove the explanation given by Caguite of
his retraction.

We find that the denial of back wages is
due to a conviction arrived at by the investigator, after a full
consideration of all the facts disclosed at the’investigation, that
Olase was in part responsible for a customer being mulcted of a big
portion of the value of his check. Only a technicality, i.e., lack of
opportunity on the part of Olase to refute the charge that Caguite made
the retraction because he was paid P300, was the ground why the
respondent court ordered reinstatement, this without back wages. On our
part, we find that the order denying back wages does not constitute
abuse of discretion on the part of the respondent court.

Wherefore,
in G. R. No. L-17186 the petition of the GSIS is dismissed and the
order appealed from is affirmed, and in G. R. No. L-17363 the petition
is also dismissed and the order appealed from also affirmed. Without
costs.

Bengzon, C. J, Padilla, Bautista Angelo, Concepcion, Reyes, J, B. L., Paredes, Dizon, and De Leon, JJ., concur.