FELIX ESMALIN, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (3RD DIVISION) AND CARE PHILIPPINES, RESPONDENTS.

Before Us is a
petition for review by certiorari^[1] of
the decision^[2]
of the National Labor Relations Commission, Third Division, declaring the
petitioner’s dismissal from private respondent, CARE Philippines, justified.

As gathered from the records, the facts of this case are as
follows:

The petitioner, Felix Esmalin has been employed by CARE
Philippines for almost six (6) years, three (3) years of which as warehouseman of the company, assigned at
Transcon Warehouse in Bacood, Sta. Mesa, Manila.  Among his duties and responsibilities were: 
to expedite dispatch of all CARE supplied commodities through monitoring
delivery orders; to dispatch and correct bag count; to coordinate with the
shipping clerk on all details concerning arriving shipments, and to make a
report on all arrivals at TRANSCON.  As found by the NLRC, Esmalin was occupying a
position of trust.^[3]

The private respondent, CARE Philippines, is a non-profit
organization whose primary purpose is to facilitate and maximize voluntary
gifts or reliefs, rehabilitation and reconstruction materials and other needed
commodities, by individuals and
organizations outside of the Philippines, to individuals and organizations in
the Philippines, designated by the donors.^[4]

In a series of
thefts involving a total of 17,731 bags of relief goods consisting of soy fortified
flour (SFF) and corn soya milk (CSM) belonging to the U.S. government and
stored at the TRANSCON Bodega of respondent Company, the alleged participation
of Esmalin, CARE OIC of said bodega, was summarized by the Tanodbayan, as
follows:

“Felix Esmalin was the CARE OIC of TRANSCON
Bodega.  He cooperated with John Dupree in retesting in MIT
laboratory and in taking samples even not at random until the original test
result of being ‘unfit for human and unfit for animal’ was changed to ‘unfit
for human but fit for animal’. 
Thereafter, Letter Orders were made by John Dupree but only to be
applied to CSM and SFF deposited in TRANSCON, Sta. Mesa bodega.  However, he caused withdrawal in favor of Oliver C. Reyes one truck of good order milk (CSM) from Pasig Warehouse
and brought them to Biñan.  As OIC
Warehouseman, he should see to it that
in every delivery of relief
goods to ASF, BAI, Alabang he must at the return of every
trip, take back a copy of the DCR and from there he could easily detect where
the goods were brought and who received them. 
But he did not comply with that duty, and his unjustified failure
facilitated the diversion, a conduct emphasizing cooperation in the execution of his role in the conspiracy.

“Esmalin reported at first a small quantity of damaged SFF and
CSM; however, with the loterance (sic) of Orlando Cabrega, who is the USAID
Program Specialist and godfather of Efren C. Reyes in marriage, and without the
benefit of inspection, check or reclassification, he jacked up the number of damaged
CSM and SFF and reported/advised same as due for donation in order not to
contaminate the good order relief goods
coming from ‘SS Thomas Nelson’.

“Such act manifest (sic) intent for gain to cooperate with the
scheme to divert good order relief goods in
big quantities and Cabrega played the leading role in that
respect.”^[5] (Underscoring supplied).

The report on the
loss of company commodities as well as the involvement of Esmalin therein was transmitted by the Criminal
Investigation Services (CIS), Armed Forces of the Philippines, on March 9, 1981
to the Tanodbayan^[6]
which in turn found a prima facie case against the suspects including
Esmalin.

On April 29, 1981, a clearance application for the preventive
suspension of Esmalin, leading
to his termination from employment was filed by CARE PHILIPPINES on the ground
that the continued presence of the former poses a serious or imminent danger to
the property of the latter.  Thus, on the
same day petitioner received from private respondent, a letter signed by its director, Mr. Henry R. Richards, the pertinent
portion of which reads:

“This is to inform you that today we are filing with the
Ministry of Labor and Employment an application for clearance to place you
under preventive suspension.

“Considering that there is an ongoing investigation being
conducted by the Criminal Investigation Service of the Philippine Constabulary
involving anomalies in the movement of CARE food commodities; because these
investigations have resulted in strong reasonable suspicion that you are party to these anomalies; considering that as
warehouseman you occupy a sensitive position in relation to the subject of this
investigation, CARE is constrained to place you under preventive suspension
pending final termination of the CIS Investigation.

“You are therefore relieved of your duties and
responsibilities as warehouseman effective immediately.”^[7]

The reason for the clearance application to suspend and terminate
Esmalin was loss of trust and confidence.^[8]

On May 4, 1981, petitioner Esmalin opposed the clearance applied
for by private respondents to place him under preventive suspension, stating
that he is not a threat to the life and property of his employers and
co-employees; nor is he a threat to the normal operations of the company,
considering that his job is ministerial and that the on­going investigation
conducted on the reported anomalies has no bearing upon him. 

In an Order dated October
22, 1981, the Ministry of Labor, through Director Francisco Estrella denied the
clearance for preventive suspension sought by CARE Philippines and ordered the
latter to immediately reinstate Esmalin to his former position with full back
wages less his salary for two (2) months during which period he was considered
to be under disciplinary suspension.^[9]

Private respondent appealed^[10]
the Order of Director Estrella to
the Ministry of Labor on December 14, 1981. 
The appeal was dismissed for lack of merit^[11]
on May 24, 1982.

Not satisfied, CARE Philippines filed a Motion for Reconsideration
and Opposition to the Motion for the Issuance of the Writ of Execution^[12]
dated June 16, 1982.  On September 23, 1982, Deputy Minister of Labor,
Vicente Leogardo, Jr., issued an Order^[13] setting aside the Order of May 24, 1982 and
remanding the case to the National Labor Relations Commission, Regional
Arbitration Branch for compulsory arbitration.

The Labor Arbiter conducted a hearing and the parties agreed to
submit their respective position papers and
documentary evidence, after which the case was deemed submitted for decision.  On April 8, 1983, Labor Arbiter, Manuel B.
Lorenzo, rendered a decision^[14] in favor of petitioner, the pertinent
portion of which reads:

“In the case at bar, there is no showing that complainant had
cooperated and conspired with the several accused charged before the Tanodbayan
and consequently with the Sandiganbayan. 
True to the incorruptible saying ‘that the innocent is as bold as a lion
while the wicked fleeth even no one pursueth’. 
(sic) The complainant had shown his boldness by pursuing relentlessly his bid for justice because it was
very clear that complainant, Felix Esmalin is not involved in the
irregularities.

“In view of the foregoing, this Office cannot close his (sic)
eyes from the glaring evidence of the complainant’s innocence, hence, we hold
that request for clearance to terminate is DENIED and respondent is hereby
ordered to reinstate the complainant, Felix Esmalin immediately with full backwages and other benefits attached to his
former position without loss of seniority rights and privileges.

“SO ORDERED.”

CARE Philippines appealed the decision of the Labor Arbiter to
the National Labor Relations Commission (NLRC). 
On February 14, 1984, the NLRC promulgated its decision^[15] setting aside the decision of the Labor
Arbiter and declaring the dismissal of petitioner, Felix Esmalin,
justified.  The ratiocination of the NLRC
is stated in its decision, the pertinent portion of which reads:

“We find complainant’s dismissal proper.  It cannot be denied that Esmalin was
occupying a position of trust in respondent company.  As warehouseman, he had access to the property of his employer.  The latter therefore had every reason to
expect from him at all times
utmost fidelity and diligence in dealing with its property.  So that, with the finding by the CIS and the
Tanodbayan that Esmalin was involved in
a series of thefts of company property, and his
subsequent indictment therefor, one
cannot say that there was no
justifiable cause for the company’s loss of trust and confidence in complainant.  In the instant case, the complainant,
occupying a position of trust, has been charged in the Sandiganbayan on two
counts for theft of company property worth hundreds of thousands of pesos, and
the evidence against him appears to be strong. 
His guilt beyond reasonable doubt or innocence that maybe found later by
the Sandiganbayan cannot be the determinative gauge in the final adjudication
of the instant case.  It is enough that
sufficient substantial evidence has been established, as this Commission has
found, that complainant violated the trust and confidence reposed in him by his
employers, that a justified dismissal can be pronounced.  We cannot, therefore, in conscience compel
the respondent company to take him back for We cannot guarantee his good
behavior in the future.”

Felix Esmalin filed
a Motion for Reconsideration of the above decision, but it was denied. 
Hence the instant petition for review by certiorari* wherein petitioner sets forth the following
issues:

“1. Whether or not public
respondent committed grave abuse of
discretion in finding that petitioner’s dismissal was justified;

“2. Whether or
not public respondent decided a question of substance in a way not in
accordance with law and applicable decisions of the Supreme Court;

“3.  Whether or not petitioner was denied “due
process of law“ when he was arbitrarily relieved of
his employment on April 29, 1981.”^[16]

all of which may be synthesized into one single issue, that is, whether or not
Esmalin’s dismissal is justified.

Before going into the merits of this case, an important point to
consider is the finality of the assailed order of the Director of Labor dated
October 22, 1981 which was the subject of review by the National Labor
Relations Commission whose decision is now before this Court.

The records show that despite reconsideration of the Order of
Deputy Minister of Labor Vicente Leogardo, Jr. dated May 24, 1982 which
affirmed the Order of the Director, National
Capital Region dated October 22, 1981 and dismissed respondent’s appeal
relative thereto, the findings of the Office of the Minister on the
untimeliness of the filing of the appeal memorandum are still as follows:  [1] that the Order of the Regional Director
appealed from was received and signed by counseI of record on October 31, 1981
and by respondent itself on November 5, 1981; [2] that from November 5, 1981,
respondent was given ten (10) working days within which to appeal the said
Order; [3] that before the expiration of said period, respondent filed an
urgent motion for extension of time to file appeal memorandum on November 16, 1981 praying for 15 days from
November 18, 1981 within which to file an appeal memorandum and another
extension from December 4, 1981 to December 13, 1981; and [4] that since
December 13, 1981 falls on Sunday, respondent’s appeal memorandum was filed on
December 14, 1981, which allegedly is within the reglementary period.^[17]

It is well established that a motion for reconsideration and/or
an appeal from a decision, award or order of the Labor Arbiter must be filed
within ten (10) working days from receipt of such decision, award or order,
pursuant to the Labor Code.^[18]
In implementation thereof, Section 6, Rule VIII of the Revised Rules of the
NLRC provides:  “No extention of period.  No motion or request for extension of the
period within which to perfect an appeal
shall be entertained.”
Hence, the Revised Rules of the
National Labor Relations Commission are clear and explicit and leave no room
for interpretation, that the subject
Order of the Director of Labor
appealed to the Deputy Minister of Labor has already become final and executory
and can no longer be subject to appeal.^[19] Accordingly, the decision of the National
Labor Relations is null and void for lack of jurisdiction and for the same
reason, not within the jurisdiction of this Court to review.

However, even on the merits, a careful review of the records
failed to yield a cogent reason to disturb the assailed Order of Director Estrella
dated October 22, 1981.

The bone of contention in this case is the alleged participation
of Esmalin, as conspirator in the theft of a large number of relief goods
belonging to the U.S. and intended for delivery to Alabang Stock Farm, Bureau
of Animal Industry, Alabang, Rizal, which were in fact diverted and delivered
to Biñan,
Laguna.

CARE submits that as warehouseman, Esmalin has full knowledge of the irregularity and
the fact that the incident took
place, only shows that he connived with the other indictees and expected profit
from the transaction if
disposed, which in fact was so disposed. 
CARE also pointed out that Esmalin was physically present as
warehouseman-representative when the goods subject of the CIS investigation
were taken out of the Transcon Bodega, yet he allowed goods of
excellent condition to be mixed with alleged damaged commodities.^[20]

On the other hand, Esmalin taking exception to aforesaid charges, maintained that the PC-CIS
investigation itself clearly shows that withdrawals from the Transcon bodega
were covered with the letter-orders from the American officers of CARE and gate
passes prepared by Transcon warehouseman/supervisors.  He insists that said withdrawals were
witnessed by CARE and Transcon officers. 
In fact, there were three (3) letter-orders submitted covering the
delivery of the disputed goods and 35 gate passes thereof.  For this reason, he contends that if there
was any “switching of food
commodities” it was not of his own making. 
According to him, it was a co-employee Mrs. Adelina Caday who, upon
instruction by a superior, prepared the authorization and D-3 and were the same
documents presented to him for his signature.

Briefly stated, the Regional Director’s findings and conclusions read:

“Based on the foregoing set of facts, we find that Esmalin’s
involvement in the irregularity cited as ground for dismissal has not been
clearly and satisfactorily established. 
Even the report of the CIS on
the incident happened through the presentation and flow of papers and documents.  Esmalin had only ministerial participation in
them.  These papers, which are usually
letter-orders and gate passes are not prepared by Esmalin; certainly, he is not
to account for the impropriety of its contents, nor can stop the flow of
goods.  He therefore, had no direct hand
in the switching much more in the flow of CARE commodities.  Therefore, as the participation of Esmalin in the irregularity is not
sufficiently established, the clearance application, perforce cannot be
sustained.  However, for affixing his
signature on a document which he should have studied carefully and which he did
not, he should be meted some kind of penalty. 
His suspension for two (2) months appears to be appropriate.”^[21]

In fact, even after compulsory arbitration in the National Labor Relations Commission, Regional
Arbitration Branch, the findings
in favor of Esmalin remained
unaltered.  Labor Arbiter Manuel B.
Lorenzo gave stress on the
glaring evidence of the petitioner’s innocence and arrived at the same
conclusion, to deny the request for clearance to terminate and grant full back
wages and other benefits to Esmalin. 
More importantly, in a resolution dated August 17, 1984, the
Sandiganbayan, First Division, acquitted Esmalin of the accusations filed
against him.^[22]

In addition, in a letter
dated April 29, 1981, and signed by Director Henry R. Richards of CARE
Philippines, informing
petitioner Esmalin that he shall be placed under preventive suspension pending
the final termination of the CIS investigation, CARE
alleged that it conducted its own investigation as early as July 1980, one (1) year before petitioner was placed under preventive
suspension.  But on February 24, 1981 or
sixty-four (64) days before petitioner’s suspension, the same Director Richards
sent Esmalin a memorandum^[23] increasing his salary to P1,285.00 per month
effective January 1, 1981, in recognition of his continued good work and
efforts in behalf of CARE.

If indeed, petitioner was under formal investigation with regards to his alleged participation in
the anomaly, then the action of CARE Philippines in giving petitioner a merit
increase is undoubtedly inconsistent with the said investigation.

Undisputedly, CARE Philippines did not conduct its own
investigation on the petitioner
but relied only on the CIS
investigation which is in contravention of the ruling set forth in the case of
De Leon vs. NLRC, 100 SCRA 691 [1980], wherein this Court held:

“The act of respondents in dismissing petitioner without first
conducting a formal investigation is arbitrary and unwarranted.  The right of an employer to dismiss an
employee differs from and should not be confused with the manner in which such
right is exercised.  It must not be
oppressive and abusive since it
affects one’s person and
property.”

While it is true that
suspension is different from dismissal
and that it is only in cases of
dismissal wherein a formal investigation and a prior clearance from the
Ministry of Labor is required, it can be discerned from the records of the case
as well as from the actions taken
by CARE Philippines, that indeed they sought not only the suspension of
petitioner Esmalin but also his dismissal.

This can be gleaned from the memorandum submitted to Us by
private respondent, which mentioned “an application for Clearance for the termination of the employment of the petitioner with the Ministry of Labor”.^[24] Furthermore, although the letter dated April
29, 1981 speaks of “preventive suspension”, its tenor clearly
indicates dismissal.  The pertinent
portion of the same reads:

“You are therefore relieved of your duties and responsibilities as Warehouseman effective
immediately.

“Please arrange with the Accounting Office for a proper
computation of any amounts due you from CARE by way of unpaid salaries as of this date, and for a proper turnover of records and documents in your custody, including
your CARE identification card.”

In addition, said letter refers to an
enclosure which is the “Clearance to Dismiss Employee”.^[25]

Thus, the letter preventively suspending petitioner is in reality
a dismissal, considering that on the same day, private respondent filed with the Ministry of Labor an application for clearance to dismiss the petitioner.

The Rules and Regulations implementing the Labor Code of the Philippines or P.D. 442^[26]
then enforced,*
clearly states that no employer may dismiss an employee without a prior clearance secured from the Ministry of
Labor.  A dismissal without said
clearance shall be conclusively presumed a termination without a
just cause.

According to the case of Bachiller vs. NLRC, 98 SCRA 393 [1980]:

“Dismissal of an employee without
requisite prior clearance from the Ministry of Labor is equivalent to arbitrary dismissal.”

Verily, it is the prerogative
of management to employ the
services of a person and likewise to discharge him.  But this is not without limitations and
restrictions.  The dismissal of an
employee must be done with just cause and without abuse of discretion.  It must NOT be done in an arbitrary and
despotic manner.  To hold otherwise would
render nugatory the security of tenure clause enshrined in the Constitution.

The right to labor is a constitutional as well as a statutory
right.  Every man has a natural right to
the fruits of his own industry.  A man
who has been employed to undertake certain labor and has put into it his time
and effort is entitled to be protected. 
“The right of a person to his labor is deemed to be property within
the meaning of constitutional guarantees. 
That is his means of livelihood. 
He cannot be deprived of his labor or work without due process of law.”^[27]

Dismissal of an employee must be done without abuse of
discretion.  The right of an employer to
freely select or discharge his employees is regulated by the State, because the
preservation of the lives of the
citizens is a basic duty of the State, more vital than the preservation of
corporate profit.  The protection to
labor and social justice provisions of the Constitution and the labor laws and rules and regulations are interpreted in
favor of the exercise of labor rights.^[28]

From the records of the case,
it can be discerned that reinstatement is no longer viable in view of
the strained relations between
petitioner-employee and private respondent-employer.  This is very evident from the vehement and
consistent stand of CARE Philippines in refusing to accept back petitioner
Esmalin.  Instead, petitioner should be
awarded separation pay as an alternative for reinstatement.

In the case of City Trust Corporation vs. NLRC, 157 SCRA 87
[1988], WE said:

“However, in this case, there is no doubt that the
relationship of employer to employee is so strained and ruptured as to preclude
a harmonious working relationship should reinstatement of private respondent be
decreed.  Instead, private respondent should be afforded the right
to separation pay so that he can be spared the agony of having to work anew
with petitioner under an atmosphere of antipathy and antagonism and the
petitioner does not have to endure the continued services of private respondent
in whom it has lost confidence.”

This principle was formulated
in Balaquezon EWTU v. Zamora (97 SCRA 5) and subsequently reiterated
in Asiaworld Publishing Inc. v. Ople (152 SCRA
219, G.R. No. 56398, July 23, 1987) and Bautista vs. Inciong, (158 SCRA
665 [1988]), wherein it was stated that: 
“a monetary award is to be paid
to the employee as an alternative to reinstatement which can no longer be effected in view of
the long passage of time or because of the realities of the situation.”

WHEREFORE, in view of the foregoing, the decision appealed
from is hereby set aside, and the decision of the Director of Labor is hereby
affirmed with the modification that in lieu
of reinstatement, petitioner shall be given separation pay equivalent to one-half month pay for every year of service.  No costs.

SO ORDERED.

Bidin and Cortes, JJ., concur.

Gutierrez, Jr., in the result.

Feliciano, J., on leave.

^[1] Rollo,
p. 3.

^[2] Rollo, pp. 117-124; promulgated on February 14, 1984 by the NLRC, Third
Division, composed of Guillermo C. Medina, Presiding Commissioner; Gabriel M.
Gatchalian and Miguel B. Varela, Commissioners.

^[3] Rollo,
pp. 117-118.

^[4]
CARE means Committee on Aid for Relief Everywhere, a recognized outlet of
relief goods administered by the U.S. Aid for
International Development (USAID).

^[5] Rollo, pp.128-129.

^[6] Rollo, pp. 106-107.

^[7] Rollo, p. 39.

^[8] Rollo, p. 107.

^[9] Rollo, p. 71.

^[10] Rollo, pp. 72-74.

^[11] Rollo, pp. 75-76.

^[12] Rollo, pp. 77-79.

^[13] Rollo, pp. 153-155.

^[14] Rollo, pp. 100-103.

^[15] Rollo, pp. 117-124.

* should be
petition for certiorari

^[16] Rollo, pp. 291-292.

^[17] Rollo, pp. 153-154.

^[18] Insular Life Assurance Co. Ltd. v.
NLRC, 156 SCRA 741 (1987).

^[19] Rizal Empire Insurance Group v. NLRC,
150 SCRA 568, 569 (1987).

^[20] Rollo, p. 68.

^[21] Rollo, p. 75.

^[22] Rollo, p. 334.

^[23] Rollo,
p. 6.

^[24] Rollo, p. 219.

^[25] Rollo, p. 39.

^[26]
Rule XIV:  Section 1.  Requirement for shutdown or dismissal.  – No employer may shut down his establishment
or dismiss any of his employees with at least one year of service during the
last two years, whether the service is broken or continuous, without prior
clearance issued therefore in accordance with this Rule.  x x x

Section 2.  Shutdown or dismissal without clearance.  – Any shutdown or dismissal without prior clearance shall be conclusively
presumed to be a termination of employment without a just cause. 
x x x (Foz, Labor Code of
the Philippines, 1981 Edition).

* Amended on
September 4, 1981 by Rules Implementing BP 130, Rule XIV , Termination of
Employment.

^[27] Philippine Movie Pictures Workers’
Association vs. Premiere Productions, Inc., 92 Phil. 844 cited in de
Leon, Textbook on the New Philippine Constitution 1983 Ed.

^[28] Euro-Linea, Philippines, Inc. v. NLRC, 156
SCRA 78 (1987).