SEGUNDINO ROYO, GERMAN ROYO AND CIPRIANO ROYO, PETITIONERS, VS. THE HON. NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, STANDARD ALCOHOL, INC., AND RAMON CHUANICO, RESPON…

Royo versus Standard Alcohol

The Case

This is a petition for certiorari brought by Segundino Royo, German Royo, and Cipriano Royo against the National Labor Relations Commission, Standard Alcohol, Incorporated, and Ramon Chuanico. The petitioners were employees of the company who were suspended and then dismissed after mauling a co-employee inside the company premises. The case matters because it cleanly separates two questions that examiners love to combine: whether the dismissal was for a just cause, and whether the employer observed due process. The Court holds that there was a just cause, but that the employer nonetheless failed in procedure, and pays a modest indemnity for that failure.

Procedural History

The petitioners first filed a complaint for illegal suspension, for violation of the thirteenth month pay law, and for service incentive leave pay. After more than thirty days passed without their being allowed to return, they amended their position and charged illegal dismissal. The Labor Arbiter ruled in their favor, finding illegal dismissal, and ordered separation pay, service incentive leave pay, and proportionate thirteenth month pay. The company appealed to the National Labor Relations Commission, which reversed in part: it found serious misconduct and deleted the separation pay, while retaining the incentive leave and thirteenth month pay. The petitioners then came to the Supreme Court by petition for certiorari.

Facts

Three relatives worked for Standard Alcohol. Segundino Royo was hired as a truck driver in October 1978. German Royo had been caretaker of the company compound since August 1960. Cipriano Royo was hired as a repacker and handyman in September 1971.

On the morning of February 28, 1990, a co-employee named Mario Alvarez was loading cargo on a company truck when German Royo called him into the office. Inside, Segundino Royo grabbed him by the arm and pulled him to a chair, accusing him of reporting the petitioners to management for theft of company property. When Alvarez answered that it was true, he was slapped, then boxed, and the brothers took turns boxing and kicking him until he collapsed. Cipriano Royo tried to hit him with a piece of wood as he fled, and only the intervention of another employee saved him. Alvarez was treated at a hospital and a medical certificate was issued.

That afternoon the company issued a memorandum suspending the three petitioners and absolutely prohibiting them from entering the company premises, citing commission of a crime on company premises, dishonesty and disorderly conduct, and stealing company property. Criminal charges for slight physical injuries were later filed, and the petitioners were convicted. On March 5, 1990, the company sent the petitioners a notice to attend a conference and investigation on March 6, where they could confront Alvarez and present their side. The petitioners did not attend, and they were dismissed.

Issues

• Whether or not the petitioners were illegally dismissed, considering that the suspension did not fix a period and barred them from the premises.
• Whether or not the mauling of a co-employee inside company premises constitutes serious misconduct, a just cause for dismissal.
• Whether or not the employer observed the due process requirements for dismissal.

Applicable Provisions

Article 282, paragraph (a) of the Labor Code, as cited by the Commission, provides the just cause relied upon:

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.

This is the provision under which the Court upholds the dismissal.

Section 3 of Rule XIV of the Omnibus Rules Implementing the Labor Code, on preventive suspension, provides:

Preventive suspension. The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers.

This authorizes the initial suspension but conditions it on a genuine threat.

Section 4 of the same Rule, on the period of suspension, provides:

Period of suspension. No preventive suspension shall last longer than 30 days. The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension he pays the wages and other benefits due to the worker. In such case, the worker shall not be bound to reimburse the amount paid to him during the extension if the employer decides, after completion of the hearing, to dismiss the worker.

This is the provision the company violated, because the suspension became indefinite.

Ruling

On the first issue, the Court held that the petitioners were not dismissed on March 1, 1990. Although the suspension notice fixed no period, five days later the company set an investigation and asked the petitioners to attend. By inviting them back, the company clearly lifted the ban. The Court called it petulance for the petitioners to refuse to come simply because they had earlier been barred, and held that if they were not heard, it was because they spurned the opportunity. The immediate concern of securing the premises, which held highly inflammable products, explained the suspension.

On the second issue, the Court held that there was a just and valid cause for dismissal. The petitioners beat up a co-employee and were convicted of slight physical injuries. The mauling was not a purely private matter, because it was prompted by the victim's report of anomalies to management, and it disturbed the peace of the company and breached its discipline. Fighting within company premises is a just cause for terminating employment.

On the third issue, the Court nonetheless held that the company should have given the petitioners notice of dismissal. Because no such notice was given, the suspension became indefinite and exceeded the thirty-day limit in the implementing rules. For this violation, the company must indemnify each petitioner in the amount of 1,000 pesos.

Doctrine

First, serious misconduct under Article 282, paragraph (a) of the Labor Code includes fighting inside company premises, even if the quarrel began as a private matter, where it disturbs the peace of the workplace and breaches company discipline. Second, a preventive suspension must not exceed thirty days; beyond that the employer must reinstate the worker or extend the suspension while paying wages and benefits. Third, the absence of a notice of dismissal renders a suspension indefinite and violates the implementing rules, for which the employer is liable for an indemnity of 1,000 pesos per employee. Fourth, an employee who refuses a genuine opportunity to be heard cannot later claim denial of due process.

Disposition

The petition was denied and the decision of the National Labor Relations Commission was affirmed, with the modification that the company was ordered to indemnify each petitioner in the amount of 1,000 pesos.

Remember This

Memorize this line: fighting inside company premises is serious misconduct and a just cause for dismissal, but an indefinite suspension without notice of dismissal violates the thirty-day rule and earns the employee a 1,000-peso indemnity. Examiners use this case to test the distinction between just cause and due process, and to test whether you know that a valid cause does not excuse a procedural lapse.