CARLITO GALVEZ, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION – SIXTH DIVISION, PHILIPPINE PLAZA HOLDINGS, INC. AND ALEX GORAN, RESPONDENTS.

Galvez versus National Labor Relations Commission

The Case

This is a petition for certiorari brought by Carlito Galvez, a licensed personal trainer dismissed by Sofitel Philippine Plaza Holdings after six female on-the-job trainees accused him of lewd and indecent conduct. Galvez asks the Supreme Court to reverse the National Labor Relations Commission, which affirmed the Labor Arbiter's finding that his dismissal was for just cause and that his monetary claims lacked basis. The case matters for two reasons: it fixes the content of the first notice under the two-notice rule, and it illustrates the prospective application of a new judicial doctrine.

Procedural History

Galvez filed a complaint for illegal dismissal and for non-payment of overtime pay, holiday pay, incentive leave pay, vacation and sick leave pay, emergency cost of living allowance, thirteenth month pay, backwages, and attorney's fees. The Labor Arbiter dismissed the complaint for utter lack of legal and factual basis and denied the monetary demands. Galvez appealed to the National Labor Relations Commission, Sixth Division, which denied the appeal and affirmed the Labor Arbiter's decision. His motion for reconsideration was likewise denied. Galvez then came to the Supreme Court on a petition for certiorari, alleging grave abuse of discretion amounting to lack or excess of jurisdiction.

Facts

Sofitel Philippine Plaza Holdings owns and operates the Sofitel Hotel, a five-star resort hotel in Pasay City, represented by its general manager Alex Goran. Galvez was hired as a licensed personal trainer for the hotel's fitness center at a monthly salary of 30,000 pesos inclusive of tips, and he became a member of the union NUWHRAIN.

In April 2012 the hotel accepted several on-the-job trainees, six of them female, assigned to the fitness center under Galvez's area of responsibility. The six students later complained to management that Galvez had exhibited lewd, immoral, and indecent conduct toward them on several occasions. On 29 May 2012 the hotel issued a notice to explain why no disciplinary action should be taken against him for conduct unbecoming, and placed him under preventive suspension for fifteen days. Galvez denied the charges and claimed they were prompted by his strictness toward students who displayed boorish behavior at work.

On 8 June 2012 an administrative hearing was held, attended by Galvez, the six complaining students, and representatives of management and the union, at which the students reiterated their claims of sexual harassment. On 11 June 2012 the hotel issued a termination notice. Hence the complaint.

Issues

• Whether or not Galvez was illegally dismissed because the first notice did not state that he could be dismissed if the charges were proven true.
• Whether or not the controversy should first have been referred to the grievance machinery, specifically the Committee on Decorum for Sexual Harassment.
• Whether or not Galvez is entitled to his monetary claims, including overtime pay, incentive leave pay, vacation and sick leave pay, emergency cost of living allowance, thirteenth month pay, holiday pay, backwages, and attorney's fees.

Applicable Provisions

Article 95 of the Labor Code, on service incentive leave, provides:

Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

The Court used it to hold that the benefit does not apply to employees already enjoying vacation leave with pay of at least five days, which the hotel's employees do under their collective bargaining agreement.

Ruling

On the first issue, the Court held that there was no grave abuse of discretion. At the time the Labor Arbiter and the Commission decided, the Court had already held in Esguerra versus Valle Verde Country Club that there is no requirement that the intention to terminate be included in the first notice; it is enough that the employee is properly apprised of the charges so he can prepare his defenses, and the intention to terminate need only be stated in the second notice. The Court explained that a judicial interpretation becomes part of the law as of the date the law was originally passed, subject to the qualification that when a doctrine is overruled and a different view adopted, the new doctrine applies prospectively and does not apply to parties who relied on the old doctrine in good faith. That qualification does not apply here, because when the first notice was sent Galvez had not yet been terminated and had not yet filed any case, so he could not have relied on the earlier Maquiling ruling.

On the second issue, the Court held that referral to the grievance machinery would only duplicate the hearing already conducted and attended by union members. The procedure for dismissal need not be observed to the letter, but must follow the natural sequence of notice, hearing, and judgment. Due process was substantially complied with, since Galvez was duly notified and given ample opportunity to be heard and to rebut the charges. The Court also rejected his claim that he and the union members were absent from the hearing merely because no signatures appeared beside their names in the minutes.

On the third issue, the Court found no cogent reason to disturb the findings below. Galvez failed to prove that he was required or permitted to work beyond his regular hours, and could not present a single written authorization for overtime, which the hotel required. There was no proof of offsetting overtime against undertime, the memo he cited being blank and unsigned. He was not entitled to emergency cost of living allowance because he was not a minimum wage earner, earning 431 pesos per day against the 404 pesos per day minimum. He was not entitled to service incentive leave pay because he already enjoyed vacation leave with pay of at least five days. The hotel proved payment of the monetary value of unused vacations and sick leaves, thirteenth month pay, and holiday pay, the last denominated as overtime pay in his payslips. Absent grave abuse of discretion, the factual findings of quasi-judicial agencies supported by substantial evidence are accorded respect and finality.

Doctrine

• The first notice under the two-notice rule need not state that the employee will be dismissed if the charges are proven; it is enough that he is apprised of the charges so he can prepare his defense. The intention to terminate is stated in the second notice.
• A judicial interpretation forms part of the law from the date the law was originally passed; a new or reversed doctrine applies prospectively and does not prejudice parties who relied on the old doctrine in good faith.
• Procedural due process in dismissal requires the natural sequence of notice, hearing, and judgment, and is satisfied by substantial compliance; it does not demand inflexible procedures in every situation.
• Referral to the grievance machinery may be dispensed with where it would merely duplicate a hearing already conducted.
• Factual findings of quasi-judicial agencies with acquired expertise are accorded respect and finality when supported by substantial evidence.

Disposition

The petition was denied for lack of merit, and the Commission's decision and resolution were affirmed; Galvez lost.

Remember This

The one line to memorize: the first notice charges, the second notice dismisses, and a new doctrine applies prospectively to protect only those who relied on the old one in good faith. Examiners use this case on the content of the two-notice rule and on the prospective application of overruled doctrines.