FAMILY PLANNING ORGANIZATION OF THE PHILIPPINES, INC., PETITIONER, VS. THE NATIONAL LABOR RELATIONS COMMISSION AND HOMER AGNOTE, RESPONDENTS.

This petition for certiorari seeks to annul and set aside
the resolution issued by the respondent National Labor Relations Commission
promulgated on August 5, 1986 dismissing the appeal of petitioner for lack of
merit and affirming in toto the decision of the Executive Labor
Arbiter dated January 31, 1983 finding petitioner Family Planning Organization
of the Philippines, Incorporated guilty of illegal dismissal and ordering the
reinstatement of private respondent Homer B. Agnote to his former or equivalent
position without loss of seniority rights and other privileges, with full
backwages, allowances and 13th month pay, in the total sum of P34,269.00.

The antecedent facts are as follows:

Petitioner Family Planning Organization of the Philippines,
Incorporated (organization) is a domestic corporation duly organized and
existing under Philippine laws. Respondent National Labor Relations Commission (Commission) is a government instrumentality created
by law, impleaded in its official capacity, while private respondent Homer B.
Agnote is the head of the Program Services Section of petitioner organization.

Private respondent Homer Agnote was first employed by the
petitioner organization as Program Officer on March 1, 1977. In April, 1979, private respondent was
promoted as Planning Officer III. His
recent appointment effective January, 1981 was that of Section Head of the
Program Services Section.

On April 5, 1981, private respondent used the vehicle of
petitioner organization for personal purposes without authorization from Tomasa
Garcia, Division Director of Finance and Administration. For this reason, private respondent was
issued a letter by the same director requiring him to explain why no
disciplinary action should be taken against him.

However, petitioner organization opted not to implement any
action against private respondent and instead issued a memorandum reminding
private respondent as well as security guards Wilfredo Figuracion and Freddie
Gregorio of the procedure for the release of petitioner’s vehicles.

On April 25, 1981, private respondent voluntarily reported for
work to finalize several documents. In
the evening of the same day, the same company vehicle was again brought out of
the company premises without authorization and met an accident along España
Blvd. as it smashed and sideswept three (3) other vehicles and a Meralco post
in succession with private respondent and the two security guards, Gregorio and
Figuracion as passengers.

On June 4, 1981, private respondent received a letter from
petitioner suspending him effective June 5, 1981 and subsequently dismissing
him for cause effective July 4, 1981.

On June 8, 1981, private respondent filed a complaint against
petitioner with the Ministry of Labor and Employment (now Department of Labor
and Employment) for illegal dismissal, illegal suspension and non­-payment of
per diems and other benefits.

On June 11, 1981, petitioner filed with the MOLE (now DOLE) a
clearance application to terminate private respondent effective July 4, 1981.

The Executive Labor Arbiter Virginia G. Son rendered a decision
on January 31, 1983 finding petitioner organization guilty of illegal dismissal
and ordering the reinstatement of private respondent to his former or
equivalent position without loss of seniority rights and other privileges, with
full backwages, per diems and allowances and 13th month pay amounting to
P34,269.00.

Labor Arbiter Son found as follows:

“After a careful and judicious examination of the records and
the evidence adduced by the parties, both oral and documentary, We find and so
(hold) that respondent Family Planning Organization of the Philippines, thru
its responsible officials, guilty of having illegally dismissed from the
service complainant Homer B. Agnote based on its alleged conclusion that said
complainant was responsible for the unauthorized release and use of
respondent’s vehicle resulting in a vehicular accident which caused damage to
its property. The unauthorized release
and use of the vehicle, which was a Datsun car bearing Plate No. IR-458, was,
according to respondent, a violation of its rules and regulations. We agree with respondent on this point, that
the unauthorized release and use of any of its vehicle without the (express)
permission of the official concerned is a violation of its rules and
regulations. In this case, however, the
unauthorized release and use of respondent’s vehicle on the evening of April
25, 1981 which was damaged as a result of a vehicular accident cannot be
attributed to complainant Agnote. x x x.

“We have carefully scanned the records and we cannot find any
valid and justifiable reason why respondent gave more weight to the alleged
statements of the two security guards instead of giving due consideration to
the warranted explanations submitted by complainant. x x x.

“As could be gleaned from the records of the proce(e)dings, on
April 25, 1981 there was a drinking spree going on in the office downstairs of
respondent and the prominent participants were the two security guards. Complainant was not one of them as he was in
his office upstairs working. The
glaring fact as borne out by the evidence adduced, directly points to the two
security guards as the persons who violated the rules and regulations when
they, without authority, used respondent’s car in following complainant and his
companions to the restaurant that evening of April 25, 1981. The facts are clear and the evidence (is)
strong in that when complainant Agnote left the premises of respondent that
evening of April 25, 1981 for din(n)er he was in the company of Manalang and Capacete
and the (car) used was that of Capacete. This uncontroverted fact finds further support in the statement of
Danilo Manalang and Sonny Inocencio, the latter being the nephew of one of the
security guards involved, Freddie Gregorio, in that complainant was not a party
to the drinking spree and the car used in going to the restaurant was the one
brought by Capacete. Manalang, who
admitted in his statement to be a participant in the drinking spree and who
later left the two security guards to join complainant in riding in the car of
Capacete, likewise stated that on their way (to) the restaurant, he saw the
Datsun car of respondent. He went with
Capacete while complainant Agnote joined the two security guards in the car of
respondent. Although their statements
were not duly verified, the same were nevertheless not denied by
respondent. Respondent in fact could
have availed of the (supportive) testimony of either Manalang or Inocencio
since its witness, Director Ga(r)cia, in her affidavit and testimony given
during the trial stated that in the alleged investigation conducted(,)
inquiries were made from other persons and some of its employees who had
knowledge of the incident (Folio 180-183, Records, and tsn, p. 45, May 31,
1982, hearing). More importantly, it
should have presented the two security guards the authenticity and probity of
whose statements have yet to be tested. But respondent, sensing the futility of its stand, did not at all bother
to present any further evidence and merely agreed to have the case submitted
for resolution, with the reservation to submit a formal offer of evidence which
was not done at all (June 16, 1982 Constancia). This prompted complainant to have the case submitted for resolution
(Constancia, August 10, 1982).

“We do not have to dig deeper to the reasons why the two
security guards cast all the blame on the complainant for that would free theme
and their employer for that matter from any responsibility and/or liability
that had arisen out of the unauthorized release and use of respondent’s vehicle
on April 25, 1981 which was damage(d) as a result of a vehicular accident. This is not to mention about the guard’s
patent violation of their bounden duty by drinking during working hours and
wors(e) abandon(ing) their posts while on tour of duty.

“From the foregoing, it is clear that respondent acted without
any valid and legal justification in dismissing from the service complainant
Agnote. It likewise violated the
clearance requirements when it suspended complainant on June 5, 1981 and filed
its clearance application after six (6) days, or on June 11, 1981. As a consequence of its illegal act,
complainant is entitled to reinstatement with payment of full backwages from the time of his
illegal dismissal on June 5, 1981 up to August 10, 1982 x x x.” (Rollo,
pp. 20-23)

Hence, the petitioner interposed an appeal to the respondent
Commission.

After finding that there existed no sufficient justification to
disturb the appealed decision, the respondent Commission rendered a resolution
on August 5, 1986, dismissing the appeal for lack of merit.

Hence, this present petition.

Petitioner emphasizes that the findings and conclusions of the
respondent Commission are not supported by evidence but are actually against
the evidence on record. It notes that
private respondent was dismissed for cause and that such dismissal was legal
and valid.

On the contrary, respondent Commission argues that the findings
of the Labor Arbiter as affirmed are fully supported by the evidence on
record. Furthermore, respondent
Commission stresses that the errors invoked by petitioner are purely questions
of facts which are not tainted with arbitrariness that would amount to abuse of
discretion or lack of jurisdiction.

In addition, petitioner alleges that it complied with all the
legal requirements and filed the necessary clearance with the MOLE (now DOLE)
for the termination of services of private respondent.

However, the respondent Commission maintains that petitioner
failed to comply with the clearance requirement. It argued that the records show there was a clear intention on
the part of the petitioner to terminate private respondent with or without the
necessary clearance.

The bone of contention therefore, is the legality of the dismissal
of private respondent Agnote for willful disobedience, specifically for the
unauthorized use of the petitioner’s vehicle.

After a careful review of the records of this case, the Court
finds the petition meritorious and holds that the respondent Commission gravely
abused its discretion when it dismissed for lack of merit the appeal and
affirmed in toto the decision of the labor arbiter.

Well-settled is the rule that the factual findings of
administrative bodies are entitled to great weight and these findings are
accorded not only respect but even finality when supported by substantial
evidence (Asian Construction and Development Corporation v. National Labor
Relations Commission, G.R. No. 85866, July 24, 1990, 187 SCRA 784, 787). Stated differently, the truth or the
falsehood of alleged facts is not for this Court now to re-examine. The probative value of the evidence
presented by the litigants or any of them may no longer be inquired into. However, when the inference made or the
conclusion arrived at on the basis of a certain state of facts is manifestly
mistaken, this Court definitely should step in and exercise its power of
review.

It is the employer’s prerogative to prescribe reasonable rules
and regulations necessary or proper for the conduct of its business or concern,
to provide certain disciplinary measures to implement said rules and to assure
that the same be complied with. At the
same time, it is one of the fundamental duties of the employee to yield
obedience to all reasonable rules, orders, and instructions of the employer,
and willful or intentional disobedience thereof, as a general rule, justifies
recission of the contract of service and the peremptory dismissal of the
employee.

In order that the willful disobedience by the employee may
constitute a just cause for
terminating his employment, the orders, regulations, or instructions of the
employer must be:

(1) reasonable and lawful;

(2) sufficiently known to the employee; and

(3) in connection with the
duties which the employee has been engaged to discharge (see Department of
Labor Manual, Sec. 4343.01 (2) and Gold City Integrated Ports Services, Inc.,
v. NLRC, G.R. No. 86000, September 21, 1990, 189 SCRA 811, 816-817).

A rule prohibiting employees from using company vehicles for private
purpose without authority from management is,
from our viewpoint, a reasonable one (Soco v. Mercantile Corporation
of Davao, G.R. Nos. L­-53364-65, March 16, 1987, 148 SCRA 526, 532). The employees must yield obedience to this
rule because this is proper and necessary for the conduct of the petitioner’s
business or concern.

From the evidence presented, private respondent initially used
the company vehicle without authorization in pursuing his own personal
interests. It is noteworthy that the
petitioner did not impose any sanction after hearing the admission and
explanation of private respondent, but it reminded private respondent as well as the two security guards of the
procedure for the release of its vehicles.

Unrebutted evidence on record shows that the unauthorized use of
petitioner’s vehicle on April 25, 1981 can be attributed not only to the
security guards but to private respondent as well. The private respondent admitted that he rode the said vehicle driven
by one of the security guards coming from the restaurant but only after
admonishing the said security guards of their violation of the company
rule. Hence, he was undoubtedly aware
of the possible consequences of his act notwithstanding the petitioner’s
previous warning and reminder regarding the use of the company vehicle. Taking into consideration his position in
the organization vis-a-vis the security guards over whom he easily
exercised moral ascendancy, it was incumbent
upon him not only to admonish them but also to refrain from using the company
car himself.

It is true that not every case of willful disobedience by an
employee of a lawful order of the employer can be reasonably penalized with
dismissal. There must be reasonable
proportionality between the willful disobedience by the employee and the
penalty imposed therefor (see Gold City Integrated Port Services, Inc. v. NLRC,
Supra, pp. 817-818). In the case at
bar, private respondent merely rode on the said vehicle, but such act is
tantamount to unauthorized use. Said
insubordination can no longer be condoned. We find no reason for petitioner organization to extend the same
leniency as it did in the first infraction of private respondent considering
that this is the second time private respondent violated the company rule
despite previous warning and reminder. Worse, he allowed the use of the vehicle for personal purposes while he
and his companions were under the influence of liquor. Worst still, there was a resultant
substantial harm on the part of petitioner organization due to private
respondent’s misconduct. Thus,
termination of employment is proper in the case at bar.

On the matter of the clearance requirement of the law, Article
278 Section (b) of the Labor Code, then in force, states:

“Article 278. x x x.

“x x x.

“(b)    With or without a
collective agreement, no employer may shut down his establishment or dismiss or
terminate the employment of employees with at least one year of service during
the last two years, whether such service is continuous or broken, without prior
written authority issued in accordance with such rules and regulations as the
Secretary may promulgate.

“x x x.

Moreover, Rule XIV Section 2 of the Rules Implementing the Labor
Code which was still in force at that time, likewise provides:

“Sec. 2. Shutdown or
dismissal without clearance. – Any shutdown or dismissal without prior
clearance shall be conclusively presumed to be termination of employment
without a just cause. The Regional
Director shall, in such case, order the immediate reinstatement of the employee
and the payment of his wages from the time of the shutdown or dismissal until
the time of reinstatement.” (Needle Queen Corporation v. Nicolas, G.R. Nos. 60741-43,
December 22, 1989, 180 SCRA 568, 572-573)

The prior clearance rule was not a “trivial
technicality.” (Cebu Royal Plant (San Miguel Corporation) v. Deputy
Minister of Labor, G.R. 58639, August 12, 1987). This requirement is part of due process which must not be denied
the employee (National Labor Union v. NLRC. G.G. 61500, August 21, 1987, 153
SCRA 228). (ibid. p. 573) It was designed to insure that the employer’s
prerogative to dismiss or lay-off an employee is exercised without abuse of
discretion or arbitrariness (Piedad v. Lanao del Norte Electric Cooperative,
Inc., G.R. No. L-73735, August 31, 1987, 153 SCRA 500, 511).

It is worth noting that the petitioner’s application for
clearance to terminate the employment of the private respondent was filed with
the MOLE (now DOLE) on June 11, 1981 specifically stating that the application
was for private respondent’s termination effective July 4, 1981. Hence, the said clearance was obtained prior
to the operative act of termination and therefore, the complaint for illegal
dismissal citing lack of prior clearance as a ground filed by private respondent is without basis.

The private respondent having been legally dismissed is therefore
not entitled to reinstatement with payment of backwages amounting to P27,720.00
as held by the labor arbiter (see Rollo, p. 23). However, he is entitled to the other monetary awards namely, the
unpaid per diems and allowances in the sum of P5,499.00 and the accrued
vacation or service incentive leave and the 13th month pay from January to
June, 1981 in the sum of P1,050.00, or the total sum of P6,549.00 for failure
of petitioner to contest the aforesaid awards.

All premises considered, the Court is convinced that the assailed
resolution of the respondent Commission is tainted with arbitrariness that
amounted to grave abuse of discretion. Respondent Commission’s failure or refusal to regard private
respondent’s act of riding the company car as tantamount to using the same and
constitutive of a flagrant violation of an established company rule led it to
the erroneous conclusion that private respondent was illegally dismissed.

ACCORDINGLY, the petition is partially GRANTED. The decision of the labor arbiter and the
resolution of the National Labor Relations Commission are hereby MODIFIED as
follows:

(a) the complaint for
illegal dismissal and illegal suspension is dismissed;

(b) the order for
reinstatement with payment of full backwages is set aside; and

(c) the other monetary
awards are affirmed.

SO ORDERED.

Narvasa, C.J., (Chairman), Cruz, and
Grino-Aquino, JJ., concur.

Bellosillo, J., on leave.