ROMULO J. FUENTEBELLA AND JOSE ANGELO LLANEZA, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, HI MARKETING CORPORATION, MAUEL H. PUEY AND RIBOLU D. TERRE, RESPONDENTS.

This is a petition for certiorari filed by
Romulo J. Fuentebella and
Jose Angelo Llaneza, former employees who were
dismissed by their employer, herein private respondent Hi Marketing Corporation
(HIMARK), seeking to set aside the decision dated December 10, 1984, promulgated
by respondent National Labor Relations Commission (NLRC) which reversed the
appealed decision of Labor Arbiter Raymundo R.
Valenzuela, dated April 29, 1983, in this labor case (NLRC-NCR Case No.
9-5828-82), thus sanctioning as lawful and valid respondent HIMARK’s act of terminating the employment of its two
employees, herein petitioners, and dismissing the latter’s complaints for
illegal dismissal, but ordering “private respondent Corporation to pay Romulo J. Fuentebella
his unpaid commission of P3,132.00 and Jose Angelo Llaneza his separation pay.”

The facts of the case are briefly as follows:

Petitioners Romulo J. Fuentebella and Jose Angelo Llaneza started as salesmen of respondent company
HIMARK, a domestic corporation, engaged, among other things, in the
promotion and sale of HOTSY, a hot water high pressure washer. 
Because of their good performance, Fuentebella
was given a raise in pay while Llaneza
was promoted to sales supervisor in the machinery department (Annex “A”,
Petition).  As salesman, Fuentebella
continued to promote and sell the said HOTSY, collect payments from customers,
and turn over said collections to HIMARK. 
On the other hand, Llaneza supervised salesmen
under him, among them Fuentebella, who reported to him
in connection with his duties and performance as salesman.

On July 22,
1982, Fuentebella presented his claim for
payment of unpaid third party commissions in the total amount of Two Thousand
Four Hundred Pesos (P2,400.00).  One of
the private respondents, Terre, as manager, recommended the approval of the
claim, and the other private respondent, Puey, as
president, approved said claim.  The next day, however, Terre
issued a memorandum to Llaneza, instructing hin to remind salesmen or representatives to secure prior
clearance from him (Terre) regarding third party commissions or TPCs and not to quote prices below the company’s selling
price, (Annex “L”, Petition).

On August 13,
1982, without preamble or cause, Terre required petitioners to submit
their resignations, allegedly upon orders of “top level
management.“ He gave no reason for the order but instructed
petitioners to see President Puey and to refrain from
continuing whatever transactions they may have entered into with the customers
in the field, pending completion of the audit in the machinery
department (Annex “B”, Petition).  Petitioners followed his
instructions and they wrote the president requesting for an
appointment with him on August 16, 1982.

The next day, or on August 14, 1982, Fuentebella collected the sum of Six Thousand Pesos (P6,000.00) from Radian International, Inc., which earlier
purchased on credit two units of HOTSY.  That date being a
Saturday, during which the office of HIMARK was already closed in the afternoon,
Fuentebella deposited the collected amount with the
Family Savings Bank, intending to remit the same to HIMARK on the next working
day, August 16, 1982.  (Annex “A”, Petition) On
August 16, 1982, however,
Fuentebella failed to withdraw the amount of P6,000.00 from the bank due to their appointment with President
Puey.  Only Llaneza, however, was allowed to see the company
President.  When Llaneza told Fuentebella that their status was
“frozen”, pending an investigation which
would be conducted by President Puey, Fuentebella submitted a
written claim to President Puey, including therein his
P6,000.00 collection as among the sales he had made for which he was claiming
unpaid commissions in the total amount of Twelve Thousand Eight Hundred Pesos
(P12,800.00).  (Annex “E”, Petition).  Then, he
informed Terre of his (Fuentebella’s) intention to
retain the collection of P6,000.00 in the bank until
his status is cleared and his unpaid commissions are
settled.

On August 24, 1982, the company Comptroller, Antonio
R. Reyes required them to surrender the provisional receipts booklets issued to
them (Annex “E”, Petition) but because in his four (4) years of service, this
was the first time that this happened, Llaneza wrote
said Comptroller to inquire whether this was in connection with Terre’s
instructions, and if so, he would trace said provisional receipts and make the
necessary report, if it would still be required (Annex “G”, Petition) No further
request, however, was made for the return of the said booklets, nor was there
any demand for the remittance of the collection withheld by Fuentebella.  (p. 29, Rollo)

On August 25,
1982, petitioners wrote President Puey,
inquiring about the result of the investigation.  Petitioners
also asked for personal confrontation to enable them to air their
grievances against Terre.  Terre and Comptroller Reyes were
furnished copies of the said letter (copy of which was attached as Annex “H-1”,
Petition) but neither of them replied thereto.  Instead,
Comptroller Reyes sent a note to each of the petitioners, for them to have a
conference with him (Annexes “H-2”-and “H-3”, Petition)

On August 31, 1982, Fuentebella and Llaneza met with
Comptroller Reyes, who offered them the company’s proposition “of one month
salary for every year of service, plus accrued or unpaid commissions on sales
made by them to date, in exchange for their respective resignations and return
of P6,000.00 collected by Fuentebella and not turned over to the company together with
the provisional receipts booklets issued to them.” Petitioners, however,
declined to accept the offer and instead insisted on an investigation of the
matter.  They also requested to be allowed to discuss the same with
President Puey.  (copy of Reyes’ Affidavit, attached as Annex “J”,
Petition)

Despite the help of Reyes in trying to arrange for a meeting
between the petitioners and President Puey, Fuentebella and Llaneza received
their letters of termination of service dated August 31, 1982 and September 1, 1982, respectively. 
(Annexes “I” and “I-1”, Petition)

On September 4,
1982, Fuentebella wrote Terre,
questioning his August 31,
1982 letter of termination. (Annex “L-2”, Petition) While President
Puey, Reyes and the company’s counsels, Dy and Tagalo, were furnished
copies thereof, none of them replied to the said letter.

On September 7, 1982, petitioners filed NLRC NCR Case
No. 9-5828-82 for illegal dismissal, unpaid wages, commissions and damages,
alleging that they were dismissed from employment without being heard or
informed beforehand of the cause or reason for their dismissal; that Terre’s
motive in requiring them to resign was due to Fuentebella’s refusal to share with Terre his (Fuentebella’s) third party commissions or TPC’s; and that since Fuentebella
was using Llaneza’s provisional receipts booklet,
Terre concluded that Fuentebella
was sharing instead his TPCs with Llaneza.  (p. 126, Rollo)

Respondents, on the other hand, denied the illegal dismissal
charge, and claimed that Fuentebella and Llaneza were discharged from their employment due to
dishonesty, fraud and breach of trust reposed upon them by their
employer.  They pointed out:  that Fuentebella’s act of misaappropriating for himself his collection of P6,000.00 by
depositing said amount to his own savings account and his refusal to remit the
same to HIMARK, despite several demands, as well as Llaneza’s defiance of a lawful order of his superior to
surrender his provisional receipts booklet, are acts clearly
inimical to the interest of HIMARK; that as a result
of Fuentebella’s dishonesty, a complaint for Estafa was filed against him; and that Fuentebella is entitled only to P3,152.00 his salesman’s
commission, but not to TPCs, which are payable only to
non-employees.

On April 29, 1983, the Labor Arbiter rendered a decision, finding
petitioners’ termination illegal, and ordered respondents to reinstate them with
full backwages and accrued benefits, and to pay Fuentebella his commission in the amount of P12,800.00 but
deducting therefrom the P6,000.00 collection which
Fuentebella purposely withheld.  (Labor
Arbiter’s Decision, p. 35, Rollo)

Respondents appealed to the National Labor Relations
Commission (NLRC).  On December 10, 1984, the NLRC reversed
the appealed decision, and ordered respondents to pay Fuentebella’s commission amounting to P3,152.00, and to pay Llaneza his
separation pay.  (NLRC Decision, p. 47, Rollo)

Petitioners filed a Motion for Reconsideration, but same was
denied.

In this petition, the principal issue raised is
whether or not the NLRC gravely abused its discretion
in setting aside the labor arbiter’s decision.

The petition is impressed with merit.

As may be gleaned from the narration of facts above, from August
13, 1982, the day Terre gave petitioners the verbal instruction to submit their
resignations, up to August 31, 1982 and September 1, 1982, when Fuentebella and Llaneza
respectively received their walking papers, Terre and Reyes merely gave both
petitioners the runaround, and never afforded petitioners the opportunity to
know the charges against them, and to be heard in their defense. 
Even President Puey, after promising Llaneza on August 16, 1982, that he would investigate the
matter of Terre’s verbal resignation instruction within 24 to 48 hours, never
conducted a formal investigation of the charges, if any, against
the petitioner.  The close dates of the issuance of the termination
letters and the actuations of Terre and President Puey, demonstrate that the management of HIMARK was already
dead set on dismissing the petitioners, without according them their right to
due process.

As correctly found by the labor arbiter, the proximate cause of
petitioners’ dismissal was the matter of sharing the TPCs.  The evidence clearly shows that when
Terre became the general manager of the administrative and machinery department
of the company in January, 1982, with both Fuentebella
and Llaneza under his direct supervision,
he wanted Fuentebella to share with him (Terre)
the additional income he (Fuentebella) was earning in
big amounts by way of third party commissions (TPCs) from the sales the latter was
making.  That this is so is bolstered by Fuentebellal’s unrebutted
explanation that:

“xxx before there was no more need to seek clearance from the
manager regarding TPC and the net price of the units but Mr. Terre issued a
memorandum on July 23, 1982 compelling us to secure clearance from him regarding
TPC and the selling of the unit below the net price to make sure that he
gets a share from the TPC, because Your Honor, we do not account for
the TPC that was given to us in full.” (tsn., p. 21, February 18,
1983).”

Fuentebella further explained that Terre
asked him to give him (Terre) also one-half (½) share of the TPC, for Terre
believed it was too big an amount for him and also for allowing
them to sell below the net price.  (tsn., pp. 22-23,
supra) There being no misdemeanors or infractions shown to have been
committed by petitioners between January, 1982, when Terre became their manager,
and August 13, 1982, when Terre told them to submit their resignations, We are
convinced that their refusal to comply with Terre’s demand was the reason for
asking them to resign.

While Terre contends that TPCs are given
only to non-employees, therefore, it would be illogical for him to demand a
share of the same from the petitioners, such
contention is belied by Fuentebella’s
claim for his commission on July 22,
1982 (Exh. “E”, Petition) which Terre
himself recommended for approval, and which Nicolas O. Katigbak, the then Company’s Officer-In-Charge, approved for
payment, despite the fact that the bulk of said commission was comprised of
TPCs.  The same holds true with respect
to the claim on March 1, 1982
of Llaneza for his commission (Exh. “E-1”, Petition) consisting solely of TPCs and so with another claim of Fuentebella on May
13, 1982 (Exh. “E-5”) where out of P1,400.00 commission, P500.00 was for TPC.

With this finding that Fuentebella
is entitled to his unpaid commissions in the total amount of P12,800.00 (which is more than double the amount of the
P6,000.00 collection withheld by Fuentebella after he
learned that his position was floating), We are inclined to believe
that Fuentebella acted for self-protection, and the
filing of a criminal case against him was for leverage purposes. 
Moreover, when Fuentebella submitted a formal
written demand to President Puey on August 16, 1982,
for payment of accrued commissions, he reported the 6,000.00
collection.  Management did not make any demand, verbal or written,
for Fuentebella to remit the said collection. 
The first and only time such a demand was made was on
September 3, 1982, when Fuentebella received his termination letter, dated August 31, 1982.  Until a
demand is made by HIMARK, and a refusal thereto is made by Fuentebella, the withholding of said amount cannot legally
be considered to have ripened into a felony.

In the case of Llaneza, despite
his letter-query to Reyes regarding the latter’s directive to surrender the said
provisional receipts booklets, no further request was made for the
return of said booklets.  He cannot,
therefore, be held liable for
insubordination.

PREMISES CONSIDERED, the decision of the
National Labor Relations Commission, dated December
10, 1984, is hereby SET ASIDE and REVERSED
and the decision of the Labor Arbiter, dated April 29, 1983,
is hereby AFFIRMED and
REINSTATED.

SO
ORDERED.

Feria, (Chairman), Fernan, Alampay, and Gutierrez, Jr., JJ., concur.