MARIO GUTIERREZ, PETITIONER, VS. SINGER SEWING MACHINE COMPANY AND LEONARDO CONSUNJI, RESPONDENTS.

Gutierrez versus Singer Sewing Machine Company

The Case

This is a labor case about the limits of an employer's disciplinary power. Mario Gutierrez, a regular employee of Singer Sewing Machine Company, was dismissed after two incidents: watching a video during office hours and posting a sign on an office door. He filed a complaint for illegal dismissal. The case matters because it asks whether the penalty of dismissal fits the offense, and it gives us the Court's teaching on the twin requirements of due process and on the rule that the penalty must be proportionate to the infraction.

Procedural History

Gutierrez filed a complaint for illegal dismissal with claims for damages before the Labor Arbiter. Labor Arbiter Renato Bugarin dismissed the complaint for lack of merit, finding that Gutierrez was dismissed for valid and just cause. Gutierrez appealed to the National Labor Relations Commission, Second Division, which reversed the Labor Arbiter and declared the respondents guilty of illegal dismissal, ordering reinstatement with backwages, or separation pay if reinstatement was no longer feasible. Singer's motion for reconsideration was denied. Singer then filed a petition for certiorari with the Supreme Court, which referred the petition to the Court of Appeals. The Court of Appeals granted the petition, set aside the decision and resolution of the National Labor Relations Commission, and dismissed the complaint, thereby reinstating the Labor Arbiter's ruling. Gutierrez then came to the Supreme Court through a petition for review on certiorari.

Facts

Mario Gutierrez was hired by Singer Sewing Machine Company as an Audit Assistant on a contractual basis in 1993. He became an Accounts Checker on probationary status on February 8, 1994. He acquired regular status as Asset Auditor on March 1, 1995, receiving a monthly salary of 4,455 pesos.

On August 1, 1996, at around 3:15 in the afternoon, the Personnel Supervisor caught Gutierrez and three other Asset Auditors watching a video tape inside the Asset and Legal Department Office. She reminded them that it was no longer break time, but they ignored her and continued watching. The following day, August 2, 1996, the Administration Manager noticed a sign posted at the door of the same office which read, in the local language, that urinating there was prohibited. Gutierrez admitted placing the sign. When asked what it meant, he said it meant no urinating there. When asked why he placed it, he answered, "It is my pleasure." He was asked to remove the sign but refused.

Gutierrez later explained that he only admitted posting the sign to take the cudgels for a co-employee, and that the use of the video equipment was upon the orders of their supervisor, who wanted to test the quality of the video players. That supervisor issued a memo requiring Gutierrez to explain, and later wrote that the case did not deserve too much time and effort as he considered it a minor offense. Still, the Asset Manager issued a memo citing violations of company rules on use of company time and materials for personal use, and on acts of vandalism such as unauthorized posting of signs. These were classified as fourth degree offenses with the sanction of dismissal. Gutierrez was directed to explain in writing, but he insisted his verbal explanation was enough and submitted none. On September 9, 1996, he was dismissed. His request for reconsideration was denied, so he filed the complaint for illegal dismissal.

Issues

• Whether or not the Court of Appeals erred in procedural and evidentiary matters, such as its alleged reliance on mere affidavits of the respondents' employees and its shifting of the burden of proof to the petitioner, in violation of due process.
• Whether or not the Court of Appeals erred in reversing the National Labor Relations Commission, which had declared the respondents guilty of illegal dismissal.

Applicable Provisions

Paragraph (a) of Article 282 of the Labor Code, on serious misconduct or willful disobedience, provides:

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 just cause the Labor Arbiter invoked, and the Court measures whether the acts charged truly rise to this level.

Paragraph (e) of the same Article 282, on analogous causes, provides:

An employer may terminate an employment for any of the following causes: (e) Other causes analogous to the foregoing.

The Labor Arbiter used this provision to characterize Gutierrez's conduct, and the Court tests whether the analogy holds.

Ruling

On the first issue, the Court held that procedural due process was not violated. Singer complied with the two-notice requirement: first, a notice of the intention to dismiss, indicating the acts complained against; and second, a notice of the decision to dismiss. In between, Gutierrez was given an opportunity to answer and rebut the charges. The Court stressed that the requirements of due process are satisfied where the parties are afforded a fair and reasonable opportunity to explain their respective sides. Gutierrez was given until August 30, 1996 to explain in writing, but he chose to rely on his verbal explanation. As the Court of Appeals observed, the right to due process is not violated where a person is not heard because he has chosen not to give his side; if one has the right to speak and chooses to be silent, he cannot complain of being unduly silenced.

On the second issue, the Court disagreed with the Court of Appeals and agreed with the National Labor Relations Commission that the dismissal was unjustified and illegal. The posting of the sign did not fall squarely within the cited rule on vandalism, because that rule prohibited unauthorized posting in the bulletin board, while the sign was posted on an office door. Even assuming the infractions were committed, they were minor violations that did not merit the supreme penalty of dismissal. The Court reiterated the need for restraint in dismissing workers, since a job may be the only lifeline on which the worker and his family depend. The penalty must be commensurate with the act, conduct, or omission imputed to the employee. The Court quoted its earlier ruling:

But while he may be guilty of violation of company rules, we find the penalty of dismissal imposed upon him by respondent too harsh and unreasonable.

The Court concluded that the penalty of dismissal was unjustified, much too harsh, and quite disproportionate to the alleged infractions.

Doctrine

First, procedural due process in dismissal requires the two-notice rule: a notice of the intention to dismiss stating the acts or omissions complained against, and a notice of the decision to dismiss, with an opportunity to answer and rebut in between. Second, the requirements of due process are satisfied where the parties are afforded a fair and reasonable opportunity to explain their sides; an employee who chooses silence cannot later claim he was denied the right to be heard. Third, the penalty imposed on an erring employee must be proportionate to the offense, taking into account its nature and surrounding circumstances. Fourth, to be lawful, the cause for termination must be a serious and grave malfeasance to justify the deprivation of a means of livelihood, in keeping with the social justice mandate of the Constitution, which leans over backwards in favor of the working class and mandates that every doubt be resolved in their favor.

Disposition

The petition was granted. The decision of the Court of Appeals was reversed and set aside, and the decision of the National Labor Relations Commission, Second Division, was reinstated, with costs against the respondents.

Remember This

The single line worth memorizing: the penalty of dismissal must be commensurate with the offense, and a minor infraction does not merit the supreme penalty of termination. Examiners like to use this case on the two-notice rule and on the proportionality of penalties in illegal dismissal.