GOLDEN FARMS, INC., PETITIONER, VS. WILFREDO BUGHAO, GERMAN NONO AND THE NATIONAL LABOR RELATIONS COMMISSION, RESPONDENTS.

Golden Farms versus Bughao

The Case

This is a petition for review on certiorari, treated by the Supreme Court as a petition for certiorari, brought by Golden Farms, Incorporated against its former utility workers Wilfredo Bughao and German Nono, together with the National Labor Relations Commission. The company asks the Court to annul two resolutions of the National Labor Relations Commission: one affirming the labor arbiter's award of reinstatement with backwages for illegal dismissal, and one denying the company's motion for reconsideration. The case matters because it is a compact lesson on the quantum of proof in dismissal cases, on the difference between criminal guilt and loss of confidence, and on the deference owed to administrative findings of fact that are not supported by substantial evidence.

Procedural History

The private respondents filed a complaint for illegal dismissal with the Regional Arbitration Branch of the National Labor Relations Commission in Davao City. The complaint was initially dismissed when the complainants failed to appear at a scheduled hearing, but upon the motion of German Nono it was again set for hearing, and thereafter only Nono appeared. After the parties submitted their position papers, the labor arbiter rendered a decision ordering the company to reinstate the private respondents to their former positions without loss of seniority rights and with backwages from the time of dismissal until actual reinstatement. The company appealed to the National Labor Relations Commission, which affirmed the labor arbiter. The company's motion for reconsideration was denied. The company then came to the Supreme Court by petition for review on certiorari, which the Court treated as a petition for certiorari.

Facts

Wilfredo Bughao and German Nono were utility workers employed by Golden Farms, Incorporated. On 13 January 1984, the company's guards picked them up in connection with the theft of polyethylene bags belonging to the company, and they were detained in the Kapalong Municipal Jail. The initial police investigation yielded no prima facie case against them, and they were released. After further investigation, however, an amended complaint was formally filed against them and two others, charging them with theft before the Municipal Trial Court of Kapalong, Province of Davao.

After their release from detention, Bughao and Nono filed a complaint for illegal dismissal. The labor arbiter found that they had been illegally dismissed, reasoning that the investigation and the filing of the criminal case did not justify dismissal, that the workers held no confidential or managerial positions so that loss of confidence could not apply, and that their dismissal came so close to the certification election and run-off elections between two rival unions that it was effected because of their union activities. The National Labor Relations Commission affirmed, stressing that the police had found no valid and sufficient ground to sustain the charge of theft, that the company acted on mere suspicion, and that the workers were denied due process.

Before the Supreme Court, the company maintained that it never dismissed the workers, who simply did not report for work after their release by the police. It also invited attention to the criminal case, in which a decision was rendered on 16 August 1989 finding German Nono guilty of the crime charged while acquitting Wilfredo Bughao.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion in affirming the labor arbiter's finding that the private respondents were illegally dismissed.
• Whether or not the pendency and outcome of the criminal case for theft justified the dismissal of the private respondents, or bore on the legality of that dismissal.
• Whether or not the finding that the private respondents were dismissed because of their union activities was supported by substantial evidence.

Applicable Provisions

The decision does not quote a specific statutory text; it applies the established rule on the quantum of evidence in dismissal cases. The Court states the governing principle in its own words:

True, the question of whether an employee was dismissed because of his union activities is essentially a question of fact as to which the findings of the administrative agency concerned are generally conclusive and binding but such findings must nonetheless be supported by substantial evidence.

This governs the second issue, because the labor arbiter's conclusion on union activities rested on perception rather than proof.

The Court also applies the doctrine on loss of confidence, stating:

Finally, in several cases decided by the Court, it has been held that proof beyond reasonable doubt of an employee's misconduct is not required if the ground for dismissal is loss of confidence. Corollarily, an employee who has been exonerated from a criminal charge (based on reasonable doubt) may still be dismissed for loss of confidence arising from his misconduct.

This governs the first issue, because it separates the criminal case from the employment relationship.

Ruling

On the first issue, the Court found merit in the petition. The record clearly showed that a criminal complaint for theft had indeed been filed against the private respondents, and the Court held that the National Labor Relations Commission committed grave abuse of discretion when it disregarded the evidence regarding the filing of that criminal case. The Court also invoked the settled rule that proof beyond reasonable doubt is not required where the ground for dismissal is loss of confidence, and that an employee exonerated from a criminal charge based on reasonable doubt may still be dismissed for loss of confidence arising from his misconduct.

On the second issue, the Court found merit in the company's claim that it could not have dismissed the workers because of their participation in the certification election, since the company was not involved in the election of officers, a matter that concerned only the two rival unions. In short, no substantial evidence was presented to show that the company dismissed the private respondents because of their union activities; that conclusion was based merely on the perception of the labor arbiter and not on any evidence on record.

Doctrine

First, findings of fact of administrative agencies such as the National Labor Relations Commission are generally conclusive and binding, but they must nonetheless be supported by substantial evidence; absent such evidence, grave abuse of discretion may be found.

Second, proof beyond reasonable doubt of an employee's misconduct is not required where the ground for dismissal is loss of confidence, and an employee exonerated from a criminal charge based on reasonable doubt may still be dismissed for loss of confidence arising from his misconduct.

Third, the filing and pendency of a criminal case for theft against employees is evidence that the employer may rely on, and the labor tribunal may not simply disregard it.

Disposition

The Court set aside the decision of the National Labor Relations Commission and ordered the private respondents' complaint dismissed. Justice Sarmiento dissented in part as to respondent Bughao, whose acquittal he said cleared him of any wrongdoing and required his reinstatement with backwages, while concurring with the rest.

Remember This

Memorize the line that proof beyond reasonable doubt is not required for loss of confidence, and that an employee acquitted on reasonable doubt may still be dismissed for loss of confidence. Examiners use this case to test the quantum of proof in dismissal cases and the limits of the conclusiveness of administrative findings of fact.