COCA-COLA BOTTLERS PHILS., INC., NATALE DI COSMO, RENE HORILLENO, AND BENITO A. DE LEON, PETITIONERS, VS. GOMERSENDO P. DANIEL, RESPONDENT.

Coca-Cola Bottlers Philippines versus Daniel

The Case

This is a labor case about the consequences of an illegal dismissal. Coca-Cola Bottlers Philippines and three of its officers — its president, its general manager, and its plant security officer — ask the Supreme Court to overturn a Court of Appeals decision that had ordered the reinstatement of a company guard, Gomersendo Daniel, together with full back wages. The company insists that the dismissal was valid, or at least that the guard should receive only separation pay. The case matters because it settles, in one clean statement, the twin reliefs that the law gives an illegally dismissed employee, and it polices the use of the so-called doctrine of strained relations, which employers often invoke to escape reinstatement.

Procedural History

Daniel filed a complaint for illegal suspension before the arbitration branch of the National Labor Relations Commission, and later amended it to include illegal dismissal. The labor arbiter dismissed the complaint for lack of merit. On appeal, the National Labor Relations Commission modified the arbiter's decision: it found that Daniel had been illegally dismissed, but instead of reinstatement it awarded him separation pay of 94,744 pesos, equivalent to one half month's salary for every year of service. Daniel's motion for reconsideration was denied.

Daniel then filed a petition for certiorari before the Court of Appeals, imputing grave abuse of discretion to the Commission for awarding separation pay despite a finding of illegal dismissal. The Court of Appeals granted the petition. It reversed the Commission insofar as it awarded only separation pay, and rendered a new judgment reinstating Daniel to his former position without loss of seniority rights and other privileges, and awarding him full back wages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time his compensation was withheld up to his actual reinstatement. The Court of Appeals denied the company's motion for reconsideration. Hence, this petition for review under Rule 45 of the Rules of Court.

Facts

Gomersendo Daniel was hired on November 16, 1983 as a company guard and was assigned to the Calamba plant of Coca-Cola. On February 12, 1996, a delivery van arrived at Gate 2. Daniel, then on duty, flagged it down, inspected its load, and logged its cargo, the driver's name, and the time of arrival. Later that afternoon, while the plant security and safety officer, Benito de Leon, was giving Daniel instructions, the van stopped for inspection; an agency guard, Ronilo Diel, inspected it and allowed it to leave. For allegedly allowing the van to leave without proper inspection and documentation, Daniel was charged with negligence or inefficiency. De Leon recommended termination, but the plant manager, Rene Horrilleno, rejected the recommendation, noting among other things that termination was not proportionate to the offense and that Daniel had received a scholarship granted only to employees with high performance ratings. Horrilleno likewise rejected a recommended 30-day suspension and instead placed Daniel on regular duty. After review by the company's general counsel, Coca-Cola meted Daniel a 30-day suspension from August 23 to September 21, 1996.

On October 1, 1996, Daniel filed a complaint for illegal suspension. Days later, de Leon required him to explain why no administrative action should be taken against him for allowing a hauling truck loaded with 840 cases of full goods to leave the plant on September 27, 1996 without a tarpaulin cover. Daniel explained that he had inspected the load and instructed the helper to return the tarpaulin cover. After investigation, de Leon issued a notice terminating Daniel's employment effective February 18, 1997. Daniel then amended his complaint to include illegal dismissal and impleaded de Leon and Horrilleno.

The labor arbiter dismissed the complaint. The National Labor Relations Commission found the dismissal illegal but awarded only separation pay, citing strained relations. The Court of Appeals affirmed the finding of illegal dismissal, held that the company's belated documentary evidence of prior infractions could not be admitted, and ruled that strained relations had not been proven, so reinstatement and full back wages were due.

Issues

• Whether or not a valid cause existed to justify the dismissal of Daniel.
• Whether or not Daniel is entitled to reinstatement and back wages.
• Whether or not the individual officers of the company may be held liable.

Applicable Provisions

Article 279 of the Labor Code, as amended, provides:

Article 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

This is the substantive law that entitles an illegally dismissed employee to both reinstatement and full back wages, and it is the provision the Court applies to Daniel.

The company's own Code of Discipline, Section 12(a) of Rule 005-85, provides:

Section 12(a). Other acts of negligence or inefficiency in the performance of duties or in the care, custody and/or use of Company property, funds and/or equipment; or blatant disregard of or deviation from established control and other policies and procedures including but not limited to the care, custody and/or use of Company property, funds or equipment, similar or analogous acts or omissions, whether committed within a calendar year or not; analogous cases: Each act or omission constitutes one offense: First offense 6 day suspension; Second offense 15 day suspension; Third offense 30 day suspension; Fourth offense DISCHARGE.

This rule fixes the penalties for negligence, and the Court uses it to test whether dismissal was proportionate to the offenses actually proven.

Ruling

On the first issue, the Court held that there was no valid cause for dismissal. The Court acknowledged that Daniel had indeed breached company rules in the September 27, 1996 incident by allowing the truck to leave without a tarpaulin cover, and that the February 12, 1996 incident justified the 30-day suspension. But the alleged six prior infractions were never proven by substantial evidence; they rested on bare, self-serving assertions. Under the company's own Code of Discipline, dismissal is the fourth offense, and only two acts of negligence were indubitably proven, neither causing substantial damage or loss. The Court stressed Daniel's thirteen years of service, his scholarship grant given only to high performance employees, the minor character of his infractions, and the absence of bad faith or malice. Procedural due process, the Court added, was complied with, because Daniel received a notice of investigation, was heard, and was notified of his termination.

On the second issue, the Court held that Daniel was entitled to reinstatement and full back wages, not merely separation pay. Article 279 grants both reliefs, and the grant of one does not preclude the other. The doctrine of strained relations, which allows separation pay in lieu of reinstatement, requires substantial evidence that the relationship was indeed strained as a necessary consequence of the litigation. Here, the Court found no such evidence. The antagonism existed only between Daniel and de Leon, who had since left the company for a rival firm, and the company itself would not be greatly prejudiced by the reinstatement. The Court warned that the principle of strained relations should not be used so indiscriminately as to bar the reinstatement of illegally dismissed workers, especially when they themselves have not shown any aversion to returning to work.

On the third issue, the Court held that the individual officers could not be held solidarily liable with the corporation, absent any showing that they acted in bad faith or with malice, since the only reason they were impleaded was that they were officers or agents of the company.

Doctrine

An illegally dismissed employee is entitled to both reinstatement without loss of seniority rights and other privileges, and full back wages inclusive of allowances and other benefits or their monetary equivalent, computed from the time compensation was withheld up to actual reinstatement. These are twin reliefs granted by substantive law, and the grant of one does not preclude the other.

Separation pay in lieu of reinstatement is allowed under the doctrine of strained relations, but only upon substantial evidence that the relationship was strained as a necessary consequence of the litigation. The doctrine must not be used indiscriminately to defeat reinstatement, since some degree of antipathy normally arises from any litigation.

In dismissal cases, the employer bears the burden of proving prior infractions by substantial evidence, and the penalty imposed must be commensurate to the gravity of the offense, considering the employee's length of service and the number of violations. Corporate officers are not solidarily liable with the corporation absent a showing of bad faith or malice.

Disposition

The petition was denied for lack of merit, and the Court of Appeals decision reinstating Daniel and awarding him full back wages was affirmed.

Remember This

Memorize the twin reliefs: reinstatement without loss of seniority rights and full back wages, both mandated by Article 279, with separation pay allowed only upon substantial proof of strained relations. Examiners use this case to test the doctrine of strained relations and the employer's burden of proving prior infractions by substantial evidence.