GAUDENCIO MAPALO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND METRO DRUG CORPORATION, RESPONDENTS.

Herein petitioner, Gaudencio Mapalo, is here before us in this
petition for certiorari, praying that we set aside the
decision, dated 17 June 1992, of public respondent National Labor Relations
Commission (“NLRC”) which modified the decision of the Labor Arbiter of 27
February 1987.

The contractual relationship between private respondent Metro
Drug Corporation (“Metro Drug”), as employer, and Mapalo, as its “veterinary cosmetics
salesman-collector,” formally started on 30 June 1981. Mapalo was initially assigned to the Isabela
branch of Metro Drug.^[1] He
performed his task with such zeal as to win for himself the company’s top
performer salesman award in 1982 and to be the recipient of several other
citations.^[2]

On 30 June 1983, a memorandum was sent to petitioner informing
him of his transfer to the La Union branch office of Metro Drug effective the
day following. With his sudden
transfer, he was unable to properly effect the turnover of “invoices and
accountabilities to customers” to his successor at the Isabela branch office.

On 31 December 1983, amounts reflected in unsurrendered invoices
and collection statements in the sum of P4,928.37 were charged to the account
of petitioner. On 02 February 1984, a
letter was sent by Metro Drug to petitioner notifying him of his immediate
suspension for an indefinite period for dishonesty, due to alleged uncollected
invoices totaling P7,636.90, and because of a supposed forgery of the signature
of a certain Dr. Delfin Quiblan. In
another letter, dated 21 February 1984, petitioner’s suspension, however, was
lifted effective 27 February 1984 until final decision could have been reached
by Metro Drug on the matter. In a
letter of 01 March 1984, received by petitioner on 14 March 1984, Metro Drug
ultimately terminated the services of petitioner. Metro Drug applied the P10,000.00-bond of petitioner to his
stated liability in the amount of P10,387.78, and it thereupon demanded the
balance of P387.78.

On 16 March 1984, petitioner filed a complaint for illegal
dismissal. After the submission of
position papers, the Labor Arbiter, on 27 February 1987, rendered judgment;
thus –

“WHEREFORE, in the light of all the foregoing considerations, us
(sic) hereby order the respondents to reinstate complainant without loss of
seniority rights with full backwages of basic pay and ECOLA, including 13th
month pay, if any, but not to exceed three years plus ten percent attorney’s
fees of the total of his award, if only to render meaning to the constitutional
guarantee of the workingman’s security of tenure, of affording protection to
labor, and of promoting the principle of social justice.

“Respondent is finally ordered to present proof of compliance with
this order within ten days from receipt of this decision.”

The decision was appealed by Metro Drug to the NLRC which, in a
decision, dated 17 June 1992, held petitioner’s dismissal to be valid but it
ordered Metro Drug to indemnify petitioner in the sum of P3,000.00 by way of
damages on account of said company’s failure to observe the rudiments of due
process.^[3]
Petitioner’s motion for reconsideration was denied by NLRC in its resolution of
23 June 1992.^[4]

Hence this recourse by Mapalo.

We find for petitioner.

Two requisites must concur so as to constitute a valid dismissal
from employment: (1) the dismissal must
be for any of the causes expressed in Article 282 of the Labor Code,^[5]
and (2) the employee must be given an opportunity to be heard and to defend himself.^[6]

Among the valid causes specified in Article 282 of the Labor Code
is loss of trust and confidence on an employee who is entrusted with fiducial
matters, or with the custody, handling or care and protection of the employer’s
property.^[7]
In these cases, we have recognized an employer’s authority to sever the
relationship with an employee.^[8]

There hardly can be any dispute that, being a salesman-collector
of respondent company, Mapalo holds a fiduciary position. Although loss of trust and confidence constitutes
a valid cause for termination, it must, nonetheless, rest on solid grounds that
reasonably evince an actual breach thereof by an employee. The law certainly did not intend a privation
of the employee’s legally invested security of tenure. The burden of proof lies on an employer to
first convincingly establish valid bases for that loss of trust and confidence.

Metro Drug anchors its dismissal on Mapalo’s alleged
dishonesty. On this score, the findings
of the Labor Arbiter and NLRC are openly discordant. The Labor Arbiter has said:

“Neither do we find the alleged offenses imputed against the
complainant substantiated by the respondents. The losses in Isabela and La Union branches allegedly caused by
complainant did not really exist because, in the end, the La Union Branch
manager and the respondents’ internal auditor finally gave him a ‘clean bill of
health.’ The alleged dishonesty, therefore, did not exist.”

NLRC, upon the other hand, has concluded:

“A review of the records shows that respondent had sufficient cause
to lose its trust and confidence in complainant after the latter was found to
have unsurrendered collection invoices and had failed to return in full stocks
withdrawn from a client. From complainant’s
own evidence it has likewise been shown that stocks covered by invoices billed
to client was received by said complainant.

The Court, after closely examining the records, is inclined to
agree with the Labor Arbiter. The
delays in the settlement of petitioner’s accountabilities is understandable due
to his abrupt transfer from private respondent’s Isabela branch to La Union
branch office, i.e., just a day following the notice to him of his change of
assignment. It should come to no
surprise, therefore, if petitioner has been unable to clear within a span of 24
hours his outstanding accounts and collectibles. On record, nevertheless, are certifications issued on 21 June
1984 and 29 January 1985 by the La Union branch manager, Mr. Perfecto Santos,
and the Internal Auditor, Carlito Fajardo, respectively, clearing petitioner of
any liability to the company. The
collectibles in both the Isabela and La Union branches, in any case, have all
apparently been fully settled by customers concerned. The NLRC itself, in its decision, has expressed agreement with
the Labor Arbiter’s finding that no actual damage or prejudice has been
suffered by Metro Drug. In fine, Metro
Drug has failed to establish such sufficient legal basis for its loss of
confidence in Magpalo as to warrant his dismissal.

No less than consequential has been the failure of private
respondent to observe the requirements of due process. The law mandates that an employer must
furnish the worker sought to be dismissed with two written notices before
termination of employment can be legally carried out: (1) due notice which apprises the employee of the particular acts
or omissions by reason of which his dismissal is sought; and (2) the notice
after due hearing, which informs the employee of the employer’s decision to
dismiss him.^[9]
The Labor Arbiter and the NLRC have concurrently expressed that, indeed, Mapalo
has been deprived of his right to due process. Metro Drug has precipitately suspended him on 02 February 1984 for an
indefinite period. The suspension may
have been lifted on 21 February 1984 but it became no more than a mere gesture
for, in a letter, dated 01 March 1984, Metro Drug ultimately severed Mapalo’s
employment effective 15 March 1994. In
both instances of suspension and termination, there has virtually been an
absence of opportunity on the part of Mapalo to controvert the grounds relied
upon by Metro Drug.

With our finding that Magpalo has been illegally dismissed, an
award of three (3) years backwages, without qualification and deduction,^[10]
is, consequently, proper. In addition
to backwages, an illegally dismissed employee is entitled to (1) either
reinstatement, if viable, or separation pay if reinstatement is not viable.^[11]
In the case at bench, the strained relationship of the private parties hereto
renders no longer feasible, in our view, the continued working relationship
between them; we, accordingly, see the rationale for awarding instead to
petitioner separation pay equivalent to one-half (1/2) month’s pay for every
year of service, in lieu of reinstatement.^[12] The
amount of such separation pay is to be computed based on the period from 30
June 1981 (start of employment) to 15 March 1987 (three years from date of
illegal dismissal).^[13]

WHEREFORE, the petition is GRANTED. The decisions of both the National Labor
Relations Commission and the Labor Arbiter are SET ASIDE, and a new one is
entered ORDERING private respondent to pay to petitioner separation pay
equivalent to one-half (1/2) month’s pay for every year of service, computed
from 30 June 1981 to 15 March 1987, and a sum equivalent to three (3) years of
backwages without deduction and qualification. No costs.

SO ORDERED.

Feliciano, (Chairman), Bidin, Romero, and Melo, JJ., concur.

^[1]
Rollo, 29.

^[2]
Some of these awards are the following: (a) Quota Buster for November 1982; (b) Lipovitan Special Bonus Prize
“Trip to Japan,” in 1982 from Taisho Pharmaceutical Company; (c) Cash Incentive
Award of P500.00 from Abbot Laboratories (Phil.); (d) Commendation for
achieving 116% in his assigned target sales for 1983.

^[3]
Appendix “A”, Petition, Rollo, 28-37.

^[4]
Appendix “C”, Ibid., ibid., 48-50.

^[5]
Art. 282. 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 connection 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 representative; and

(e) Other causes analogous to the foregoing.

^[6]
See Sec. 2 and Sec. 5, Rule XIV, Book
4, Implementing Rules; Imperial Textile Mills, Inc. v. NLRC, 217 SCRA
237; Estiva vs. NLRC, G.R. No. 95145, 05 August 1993.

^[7]
Panday v. NLRC, 209 SCRA 122;
San Miguel Corporation v. NLRC, 211 SCRA 353.

^[8]
Top Form Manufacturing Co., Inc. v.
NLRC, 216 SCRA 313; Imperial Textile Mills, Inc. v. NLRC, 217 SCRA 237.

^[9]
Pepsi-Cola Bottling Co. v. NLRC,
210 SCRA 277.

^[10]
Maranaw Hotels and Resorts Corporation v.
Court of Appeals, 215 SCRA 501.

NOTE: Petitioner Mapalo was
dismissed on 15 March 1984; Republic Act No. 6715, granting full backwages,
became effective only on 21 March 1989.

^[11]
Torillo v. Leogardo, Jr., 197
SCRA 471.

^[12]
Santos v. NLRC, 154 SCRA 166.

^[13]
The amount of separation pay includes
allowances regularly paid by the employer: Santos v. NLRC, supra., note 12; Manila Midtown Commercial
Corporation v. Nuwhrain, 159 SCRA 212; Soriano v. NLRC, 155 SCRA
124; Century Textile Mills, Inc. v. NLRC, 161 SCRA 528; Hydro Resources
Contractors Corporation v. Pagalilawan, 172 SCRA 399.