ANONAS CONSTRUCTION AND INDUSTRIAL SUPPLY CORPORATION, AND ELISEO F. LIBUNAO, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION AND LARRY NAFUAR, RESPONDENTS.

Anonas Construction and Industrial Supply Corporation versus National Labor Relations Commission

The Case

This is a labor case about a delivery man who was suspended and then told, in effect, that he could no longer return to work. Anonas Construction and Industrial Supply Corporation and its head, Eliseo Libunao, are the petitioners. They ask the Supreme Court to overturn the finding that they illegally dismissed their employee, Larry Nafuar. The case matters because it gathers in one place the rules every reviewee must know: the limited scope of a petition for certiorari against the National Labor Relations Commission, the deference owed to factual findings supported by substantial evidence, the distinction between suspension and termination, and the twin requirements of a valid dismissal, namely a just or authorized cause and due process.

Procedural History

Larry Nafuar filed a complaint for illegal dismissal against the company and Libunao. The Labor Arbiter rendered a decision on March 4, 2002, finding the dismissal illegal and ordering the petitioners, jointly and solidarily, to pay backwages of 101,848 pesos and 76 centavos, separation pay of 26,061 pesos and 36 centavos, and holiday pay of 2,505 pesos and 90 centavos, for a total of 130,313 pesos and 60 centavos. Other claims were dismissed for lack of merit.

The petitioners appealed to the National Labor Relations Commission, which affirmed the Labor Arbiter in full in a resolution dated December 27, 2002. Instead of filing a motion for reconsideration, the petitioners went straight to the Court of Appeals on a petition for certiorari under Rule 65. On June 11, 2004, the Court of Appeals dismissed the petition and affirmed the Commission. The petitioners then came to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

Anonas Construction and Industrial Supply Corporation is a domestic corporation engaged in the construction business, headed by Eliseo Libunao. In April 1994, the company engaged Larry Nafuar, who began as a delivery man and was later given additional tasks of collecting payments and selling, checking, and dispatching industrial materials to clients.

On November 24, 2000, Nafuar failed to report for duty without informing the company why. The next day, management through Libunao warned him that absence without leave would be penalized with three days of suspension. On January 2, 2001, he again did not report for work. On January 3, 2001, the company sent him a memorandum informing him of a three-day suspension for absence without leave. On January 6, 2001, the company issued another memorandum requiring him to explain in writing within 48 hours why he refused to explain his earlier failure to report for work and why he refused to acknowledge receipt of the January 3 memorandum. That same day, he called his employer to ask whether he could still report to the office, and was told that his employment had already been terminated.

On January 10, 2001, Nafuar filed his complaint for illegal dismissal. The Labor Arbiter found that the memoranda carried no proof of receipt by Nafuar, that no affidavit from the person who supposedly handed them over was presented, and that the employer failed to send the written notice required in cases of abandonment. The Commission and the Court of Appeals agreed.

Issues

• Whether or not Larry Nafuar was illegally dismissed from employment.
• Whether or not the Court of Appeals erred in affirming the findings of the National Labor Relations Commission despite the petitioners' claim that those findings were speculative and that the case intruded on management's authority to discipline employees.

Applicable Provisions

Article 282 of the Labor Code, on termination by the employer, 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 representative; and (e) Other causes analogous to the foregoing.

This is the just-cause side of a valid dismissal, and the petitioners invoked insubordination, grave misconduct, and abandonment under it.

Article 277 of the Labor Code, on miscellaneous provisions, provides:

Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment.

This is the due-process side, and the Court found it was not observed.

Ruling

On the first issue, the Court held that Nafuar was illegally dismissed. The petitioners argued that he was merely suspended when he filed his complaint, so there was no dismissal for the Labor Arbiter to take cognizance of. The Court rejected this. By adopting the Court of Appeals' narration as their own statement of facts, the petitioners effectively admitted that the suspension was simply a precursor of an intended dismissal on the ground of abandonment. The company also refused Nafuar's request to return to work after the suspension. The Court stressed that for a dismissal to be valid it must be for a just cause or an authorized cause, and the requirements of due process must be observed. The illegality of the act of dismissal is discharge without just or authorized cause; the illegality in the manner of dismissal is dismissal without due process. The petitioners failed to substantiate insubordination, grave misconduct, and abandonment with sufficient evidence, and Nafuar was terminated without due process.

The Court also drew the line between suspension and termination. Suspension is a disciplinary measure imposed for violation of a reasonable rule of conduct made known to the employee. But like termination, it must rest on a valid or just cause, the employee must be apprised of the alleged violation and given a chance to explain, and where the employee denies the charge, the burden of proving a valid ground rests on the employer.

On the second issue, the Court held that the Court of Appeals committed no reversible error. Factual findings of labor administrative officials supported by substantial evidence are accorded great respect and finality, absent a showing that they arbitrarily disregarded or misapprehended evidence. The Supreme Court is not a trier of facts. Review of the Commission's decisions by certiorari under Rule 65 is confined to lack or excess of jurisdiction and grave abuse of discretion, except where the findings are not supported by substantial evidence. As to management prerogative, the Court did not question the employer's right to issue regulations and impose sanctions, but here the petitioners failed to duly apprise Nafuar of his infractions.

Doctrine

• A dismissal is valid only if it rests on a just cause under Article 282 or an authorized cause, and the requirements of due process under Article 277 are observed. Discharge without cause is illegal; dismissal without due process is also illegal.
• Suspension is not termination. Both require a valid or just cause, notice to the employee, and an opportunity to explain; where the charge is denied, the burden of proof lies on the employer.
• Factual findings of labor tribunals supported by substantial evidence are binding on the Supreme Court, which is not a trier of facts.
• A petition for certiorari under Rule 65 against the National Labor Relations Commission is confined to jurisdiction and grave abuse of discretion, and the Court of Appeals does not reweigh evidence.

Disposition

The Supreme Court denied the petition for lack of merit, affirmed the decision of the Court of Appeals, and ordered costs against the petitioners.

Remember This

Memorize the line: suspension is not termination, and both demand a just cause, notice, hearing, and proof borne by the employer. Examiners use this case to test the scope of Rule 65 review of labor rulings, the substantial evidence rule, and the distinction between illegal dismissal and dismissal without due process.