EDGARDO D. MILLARES, PETITIONER, VS. PHILIPPINE LONG DISTANCE TELEPHONE CO., INC. AND AMBROSIO HUGO, RESPONDENTS.

Millares versus Philippine Long Distance Telephone Company

The Case

This is a petition for review on certiorari brought by Edgardo Millares against the Philippine Long Distance Telephone Company and its Tondo Exchange manager, Ambrosio Hugo, arising from his dismissal from service. Millares asks the Supreme Court to reverse the finding that he was validly terminated for serious misconduct. The case matters because it gathers in one decision the working rules every labor lawyer must carry: the substantial evidence standard in dismissal cases, the treatment of a complainant's retraction, and the two-notice requirement of procedural due process.

Procedural History

Millares filed a complaint for illegal dismissal and damages with the Labor Arbiter. The Labor Arbiter ruled in his favor, holding that he was illegally dismissed and ordering the company to reinstate him and pay backwages, allowances and other benefits, tentatively computed at 263,901 pesos and 8 centavos. The individual respondent, Ambrosio Hugo, was absolved because he acted only in his official capacity.

The company appealed to the National Labor Relations Commission. The Commission reversed the Labor Arbiter, found grave misconduct, and affirmed the dismissal. Millares moved for reconsideration, but the Commission denied it. He then went up to the Court of Appeals on a petition for certiorari. The Court of Appeals affirmed the Commission, and denied his motion for reconsideration. Hence this petition for review on certiorari before the Supreme Court.

Facts

Edgardo Millares was employed by the Philippine Long Distance Telephone Company in May 1989 as a cable splicer helper. At the time of his dismissal he was a junior cable splicer at the Tondo Exchange, earning a monthly salary of 7,300 pesos.

In May 1995, Celestina Ignacio, a prospective telephone subscriber, said that Millares promised to install a telephone line at her residence for a service fee of 3,800 pesos, but failed to do so and refused to return the money. On August 8, 1995, the manager of the Tondo Exchange received her complaint. At a clarificatory hearing on August 19, 1995, Millares first denied knowing her or receiving the money, but eventually admitted the offense and promised to repay.

The company then sent him two inter-office memoranda, dated August 28 and September 6, 1995, charging him with willful violation of company rules and directing him to submit a written explanation. He refused. On September 26, 1995, he paid Celestina the 3,800 pesos, and she executed a written retraction saying she had been forced to complain when he failed to pay his loan. The company nonetheless found him guilty of extortion and serious misconduct, and dismissed him effective July 19, 1996.

Issues

• Whether or not there is substantial evidence to support the finding that Millares committed serious misconduct warranting his dismissal.
• Whether or not the Court of Appeals erred in disregarding Celestina Ignacio's retraction.
• Whether or not Millares was deprived of his right to procedural due process.

Applicable Provisions

Article 282 of the Labor Code, as amended, 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; (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 representatives; and (e) Other causes analogous to the foregoing.

This is the provision the Court applies in holding that serious misconduct and breach of trust are just causes for terminating Millares.

Ruling

On the first issue, the Court held that the finding of the Court of Appeals is supported by substantial evidence, and that this is sufficient basis for disciplinary action. The standard is met where the employer has reasonable ground to believe that the employee is responsible for the misconduct and that his participation renders him unworthy of the trust and confidence demanded by his position. The company lost its trust and confidence in Millares, and under Article 282 these are just causes for dismissal.

On the second issue, the Court held that the Court of Appeals did not err in rejecting the retraction. The minutes of the clarificatory hearing showed that Celestina retracted only after Millares paid her. The Court laid down the rule on retractions:

Retractions are frowned upon by the courts. A retraction of a testimony is exceedingly unreliable, for there is always the probability that it may later on be repudiated.

On the third issue, the Court held that Millares was accorded due process. Procedural due process requires two notices, and the Court stated the rule thus:

Procedural due process requires the employer to give the employee two notices. First is the notice apprising him of the particular acts or omissions for which his dismissal is sought. Second is the subsequent notice informing him of the employer's decision to dismiss him.

The company sent both notices, and Millares was given the opportunity to explain in writing but chose not to.

Doctrine

First, the employer in a dismissal case need only prove the just cause by substantial evidence, meaning such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Second, a retraction is exceedingly unreliable and is looked upon with disfavor, because it may be obtained through intimidation or for monetary consideration, and it does not necessarily negate the earlier declaration. Third, procedural due process in dismissal requires two notices: a notice apprising the employee of the acts or omissions charged, and a subsequent notice of the decision to dismiss. These rules tie directly to Article 282 of the Labor Code, which lists serious misconduct and breach of trust as just causes for termination.

Disposition

The petition was denied, and the decision and resolution of the Court of Appeals were affirmed, with costs against Millares.

Remember This

The single line worth memorizing is that substantial evidence, not proof beyond reasonable doubt, is the yardstick for a valid dismissal, and a retraction is exceedingly unreliable. Examiners like to use this case on the two-notice rule of procedural due process and on how a complainant's recantation is weighed in labor cases.