BENECIO D. GUBAC, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, TARLAC ELECTRIC COOPERATIVE, INC., AND/OR ERNESTO R. MADRIAGA, JR., JOINTLY WITH ITS DIRECTORS, RESPONDENTS.

This petition questions the decision of the National Labor
Relations Commission (NLRC) dated December
9, 1987 reversing the findings of the Labor Arbiter that the
petitioner was illegally dismissed.

The facts are as follows:

The petitioner worked as internal auditor of Tarlac
Electric Cooperative (TARELCO) which is a non-stock, non-profit cooperative
established for the purpose of supplying, promoting and increasing the
availability of electricity to its members.

In the afternoon of January
27, 1986, as the petitioner was about to leave the cooperative’s
premises on his motorcycle, he was stopped by the security guard manning the maingate.  The
security guards requested permission to search his tricycle.  The petitioner consented.  As a result of the search, the security
guards found some jeep spare parts in the compartment of his tricycle
consisting of two (2) pieces of “worn out” spring clamps and one (1)
“worn-out” bell trunk.  A spot report made by the security guard which was later corroborated by another employee indicated
that the worn-out parts belong to the TARELCO.

Subsequently, TARELCO’s General Manager
sent the petitioner a memorandum dated January
29, 1986 informing him of the charge against him and directing him
to explain within seventy-two (72) hours why no disciplinary action should be
taken against him.  On February 3, 1986, the petitioner
submitted his written explanation claiming categorically that the recovered
spare parts were taken from his own jeep being repaired by TARELCO’s
mechanic, Mr. Honorio dela
Cruz.

Thereafter, an investigation ensued.  Six meetings were actually held to hear the
petitioner’s explanation.  The committee,
however, found the petitioner’s claims uncorroborated and recommended his
dismissal.  Acting on the result of the
committee’s investigation TARELCO dismissed the petitioner.

The petitioner thereupon filed a complaint for unfair labor
practice and illegal dismissal against the private respondent citing that the
real cause of his dismissal was his active role as union officer in the last
strike.

On February 20, 1987,
the labor arbiter rendered a decision, the dispositive
portion of which reads as follows:

xxx                            xxx                               xxx

“WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered
in favor of the petitioner and against respondents ordering the latter to
immediately reinstate petitioner to his former or equivalent position without
loss of seniority rights and with full backwages and
other benefits from the date of his dismissal, until his actual reinstatement.  All other issues are hereby DISMISSED for
lack of substantial evidence.” (Rollo, p. 48)

On appeal, the NRLC reversed the findings of the labor arbiter in
its decision with the following dispositive portion:

xxx                            xxx                               xxx

“WHEREFORE, premises considered, the appealed decision is
hereby SET ASIDE and a new judgment declaring the dismissal of petitioner to be
valid and ordering respondent to pay petitioner separation pay.” (Rollo, p. 33)

Hence, this petition.

The Solicitor General agrees with the petitioner that there was
an illegal dismissal in this case. 
Consequently, a Research Attorney of NLRC filed a comment insisting that
the Labor Arbiter erred in his appreciation of the facts.

The petitioner raises the following issues for the resolution of
this Court, to wit:

xxx                            xxx                               xxx

“(1) Whether the facts found by the
NLRC were contrary to evidence;

(2) Whether the factual and legal conclusions of the NLRC were
without basis;

(3) Whether petitioner was deprived of his
constitutional rights to counsel, against self-incrimination, and to
presumption of innocence by the TARELCO Investigation Committee.” (Rollo, p. 49)

While it is true that loss of trust or breach of confidence is a
valid ground for dismissing an employee, such loss or breach of trust must have
some basis (Galsim v. Philippine National Bank, 29
SCRA 293 [1969]; Piedad v. Lanao
del Norte Electric Cooperative, Inc., 153 SCRA 500 [1987]).

In the case at bar, TARELCO’s basis for
terminating the employment of the petitioner is the latter’s alleged act of
pilfering or sneaking out the company’s property consisting of used or
“retired” jeepney spare parts.  While we recognize theft of company property
as a just and valid cause for dismissing an employee (Philippine Long Distance
Telephone v. National Labor Relations Commission, 166 SCRA 422 [1988]), such
charge imputed to the petitioner must first be sufficiently established.  A careful perusal of the records, however,
indicates that TARELCO has not established such fact.  Except for the self-serving affidavit of
Jaime Mendoza, who is the company’s contractual mechanic, TARELCO has not
proven that it owns the subject worn-out spare parts.  On the other hand, the TARELCO mechanic
repairing Gubac’s jeep stated that these parts came
from the jeep.  At the time the parts
were recovered, there was no indication whatsoever that these items were
missing.  The July 9, 1986 memorandum of the TARELCO General
Manager merely relied on the handwritten testimony of another driver-mechanic,
Jaime Mendoza, that the spare parts were “retired properties” of the
cooperative.  No documentary evidence
such as inventory lists, purchase slips, scrap lists, etc., was shown which
would have established the fact that the cooperative owned these items.  It is a presumption of law that a person in
possession of a thing or a property whether real or personal, is presumed to be
the lawful owner unless it can be shown otherwise.  (Sec. 5 (j) Rule 131, Rules of Court).  Since the parts were found in the
petitioner’s motorcycle, the burden of rebutting the presumption lies on the
private respondent which it failed to do.

The respondents capitalize very much on the petitioner’s alleged
delayed efforts to prove his innocence. 
This is bolstered by his alleged failure or refusal to attend the
investigation committee hearings which according to the respondents is in
effect an indirect admission of guilt. 
Such contention is baseless and false. 
Contrary to the NLRC’s findings, the records
disclose that the petitioner actually attended two (2) of the hearings dated May 20, 1986 and June 10, 1986 as evidenced by Annexes
“H” and “I”.  The
respondent has filed misleading statements when it says that the petitioner
refused to appear before the committee to present his side.  Moreover, the NLRC’s
sweeping conclusion that “one who is truly innocent will not be stopped by
anyone or anything from proving that he is not guilty of the charge” is
misplaced because the petitioner did in fact appear and defend his side.  Aside from the fact that such a finding
violates the constitutional presumption of innocence,
the respondents have apparently shifted the burden of proof to the petitioner
when it is TARELCO which should prove that the worn-out parts really belonged
to it.

Moreover, the respondents rely greatly on the declaration of the
warehouseman that the spare parts presented by petitioner’s witness, Honorio dela Cruz to prove that
nothing was actually missing, were not the parts subject of the alleged offense.  Such declaration is not sufficient to
establish that the worn-out parts in the petitioner’s tricycle belonged to
TARELCO and that Gubac was guilty of stealing
them.  We are, therefore, constrained to
sustain the factual findings of the labor arbiter that the spare parts found in
the possession of the petitioner are owned by him and that this fact “was
never controverted or impugned by any evidence
presented by the respondents.” (Rollo, p. 27)

In  the case of Egyptair v. National Labor Relations
Commission (148 SCRA 125 [1987]), we held that the burden of proof rests
on the employer to show that the dismissal was for just cause.  The private respondent’s failure to do so
necessarily meant that the dismissal of the petitioner was not justified.  (Polymedic General
Hospital v. National Labor Relations Commission, 134 SCRA 420 [1985])

The supposed dishonesty of the petitioner is not substantiated by
any evidence whatsoever.  There has to be
some kind of proof that the petitioner was involved in the loss of company
property.  (Lamsan
Trading Inc. v. Leogardo Jr., 144 SCRA 571 [1986])
Mere accusations or the insistence by the employer that the petitioner failed
to present proof of ownership over the questioned spare parts will not
suffice.  There has to be more convincing
evidence.  The proofs on hand do not
merit the dismissal of the petitioner.

Furthermore, except for this charge, the petitioner has a clean
record of employment from July 3, 1975
totalling eleven (11) years.  Considering    the
petitioner’s length of service and the attendant circumstances in this case,
the penalty of dismissal has no basis. 
The right of an employee to security of tenure is protected by the
Constitution which must be respected unless a just cause exists for the
termination of employment.  The
determination of the existence and sufficiency of just cause must be exercised
with fairness and in good faith and after observing due process (Mary Johnston
Hospital v. National Labor Relations Commission, 165 SCRA 110 [1988]).  The dismissal based on loss of trust and
confidence arising from an alleged misconduct should not be used as a shield to
dismiss an employee arbitrarily (Callanta v.
Carnation Phil., 145 SCRA 268 [1986]).

It may be noted that the NLRC found Gubac
guilty of taking company property but still ordered the payment of separation
pay out of compassion.  Where the
relationship between employer and employee has so deteriorated that the company
would be prejudiced by the worker’s continued employment, we do not order
reinstatement.  Instead, we direct the
payment of both backwages and separation pay.  In an unfair labor practice case, however,
this may not be a correct procedure. 
Where an employee is unfairly charged, apparently in order to stop or
hamper union activities, the employer still gets what he wants even if he pays
both backpay and retirement pay.  The unfair labor practice is condoned.

Considering that the findings of the NLRC are not supported by
substantial evidence, the relief prayed for by the petitioner must be granted
which is reinstatement to his former position without loss of seniority rights
and backwages not exceeding three years.

WHEREFORE, the decision of the National Labor Relations
Commission is hereby SET ASIDE and the decision of the Labor Arbiter is REINSTATED.

SO ORDERED.

Fernan, C.J., (Chairman), Feliciano, Bidin, and Cortes, JJ., concur.