VICTORIA B. MABAYLAN PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, DEPARTMENT OF LABOR AND EMPLOYMENT EMPLOYEES COOPERATIVE (DOLEEC), CAROLINA D. JULVE AND ALMERANTE GALL…

Mabaylan versus National Labor Relations Commission

The Case

This is a petition for certiorari under Rule 65 filed by Victoria Mabaylan against the National Labor Relations Commission, the Department of Labor and Employment Employees Cooperative, and its officers Carolina Julve and Almerante Gallardo. Mabaylan asks the Supreme Court to set aside the NLRC decision that declared her dismissal valid and its resolution denying her motion for partial reconsideration. The case matters because it gathers in one decision the whole architecture of a valid dismissal for loss of trust and confidence, the twin notice requirement, and the Agabon doctrine of nominal damages where a just cause exists but due process was not observed.

Procedural History

Mabaylan filed a complaint for illegal dismissal before the Labor Arbiter. On 30 April 2012, the Labor Arbiter rendered a decision declaring that she was illegally dismissed and ordering the cooperative to pay her separation pay in lieu of reinstatement, backwages, and 13th month pay. The cooperative appealed to the NLRC. On 10 October 2012, the NLRC modified the Labor Arbiter's decision: it declared the dismissal valid, ordered payment only of separation pay, 13th month pay, and nominal damages of 30,000 pesos. Mabaylan moved for partial reconsideration, which the NLRC denied on 29 November 2012. She then filed this petition for certiorari before the Supreme Court, raising grave abuse of discretion amounting to lack or excess of jurisdiction.

Facts

On 8 November 2004, the cooperative engaged Mabaylan as bookkeeper and accountant, initially on an honorarium basis. Her duties included installing an accounting system, preparing monthly financial reports, assisting in the annual budget, and preparing disbursement vouchers and checks. Her honorarium rose over the years, and from December 2007 she prepared vouchers and checks describing her compensation as salaries and wages, deducted SSS contributions, and paid herself a patronage refund although she was not a member of the cooperative.

The cooperative also discovered that the financial statement for 2008 was submitted only on 9 January 2010 after several verbal reminders, and that the 2009 financial statement was delayed, preventing the computation of patronage refunds and dividends. Mabaylan was absent without permission from 1 to 5 February 2010 and submitted no explanation despite a written notice to explain.

On 9 February 2010, the Board of Directors adopted a resolution releasing her from her duties as bookkeeper and accountant. On 11 February 2010, respondent Julve issued a notice terminating her services on the ground of lack of trust and confidence effective 15 March 2010. Mabaylan claimed the dismissal was reprisal, because her husband had earlier filed an administrative complaint against Julve before the Civil Service Commission.

Issues

• Whether or not the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding that Mabaylan's dismissal was justified.
• Whether or not the NLRC committed grave abuse of discretion in not finding the private respondents liable for illegal dismissal.

Applicable Provisions

The decision applies the rule on loss of trust and confidence as a just cause, stating that the act complained of must be work-related:

But, in order to constitute a just cause for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue working for the employer.

This standard governs whether Mabaylan's position and conduct justified termination.

The decision also states the evidentiary threshold for this ground:

Loss of confidence as a ground for dismissal does not require proof beyond reasonable doubt as the law requires only that there be at least some basis to justify it.

This relaxed standard is what the NLRC applied and what the Court sustained.

On procedure, the decision lays down the twin notice requirement:

Under the twin notice requirement, the employees must be given two notices before their employment could be terminated: (1) a first notice to apprise the employees of their fault, and (2) a second notice to communicate to the employees that their employment is being terminated.

Mabaylan received neither notice, which is the basis for nominal damages.

Ruling

On the first issue, the Court held that the NLRC did not commit grave abuse of discretion. As bookkeeper and accountant, Mabaylan was a confidential employee entrusted with financial statements on which the cooperative relied for patronage refunds and dividends. Her position was reposed with trust and confidence. The NLRC found substantial basis for dismissal: her health problem, her attitude problem, and the delay in submitting the 2009 financial report. The Court stressed that loss of confidence does not require proof beyond reasonable doubt, only some basis, and that basis existed.

On the second issue, the Court held that the dismissal was for a just cause but that the cooperative failed to observe procedural due process. Mabaylan was not given a written notice to explain, and she was denied an administrative hearing. Following Agabon versus NLRC, the lack of statutory due process does not nullify a dismissal for just cause, but the employer must indemnify the employee. Hence the award of 30,000 pesos as nominal damages was proper. The Court also upheld the awards of separation pay and 13th month pay, and reminded that certiorari corrects errors of jurisdiction, not the NLRC's evaluation of evidence, and that the NLRC's factual findings are accorded respect and finality.

Doctrine

Loss of trust and confidence is a just cause for dismissal where the employee holds a position of trust and confidence, entrusted with delicate matters such as the custody, handling, or care of the employer's property, and the act complained of is work-related and shows the employee unfit to continue working. Proof beyond reasonable doubt is not required; at least some basis suffices. Where the dismissal is for a just cause but the twin notice requirement was not observed, the dismissal remains valid, but the employer is liable for nominal damages under Agabon. Certiorari does not reach the NLRC's factual findings absent a showing of capricious and whimsical action.

Disposition

The petition was dismissed; the NLRC decision and resolution were upheld, and the cooperative was ordered to pay separation pay, 13th month pay, and 30,000 pesos in nominal damages.

Remember This

Memorize this line: loss of confidence does not require proof beyond reasonable doubt, only some basis. Examiners use this case to test the confidential employee standard and the Agabon rule on nominal damages for a just dismissal without due process.