ROCHE (PHILIPPINES), JERRY LOSBANES, GONZALO GALANG AND HENRICUS H.J.A. DORTSMAN, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER VITO J. MINORIA AND REYNALD…

Once again, this Court is tasked with determining the legality of
the termination of an employee in the present petition for certiorari. 
Petitioners seek the reversal
of the Decision^[1] of the National Labor Relations
Commission wherein the termination of the private respondent was declared
illegal.

The antecedent facts
of the case are as follows:

Private respondent Reynaldo J. Villareal
was employed by petitioner company as a medical representative for the Dumaguete/Bohol area. 
As such, his duty was to conduct sales calls on physicians within his
territory and providing the latter with drug samples on dates specified by the
company so as to create a promotional impact for the products of Roche.  Inasmuch as the nature of the work of medical
representatives like Villareal requires that
they go out in the field for most of the day, the company is unable to
monitor their work hours through the bundy clock
system.  Thus, the company devised a
method whereby the day to day activities of these employees could nevertheless
be checked.  They were required to fill
out daily call reports indicating the names of physicians visited for a
particular day and the drug samples issued to the latter.  Each doctor was also to sign an acknowledgement
of receipt of the drug samples indicating the date of each visit.

On September 20, 1982,
petitioner Jerry Losbanes supervisor of Roche (Phil.) for the East-West Visayas area, wrote the private respondent
informing the latter of a report
filed by Johnny de la Cruz, its marketing manager for Bulk Vitamins.  Mr. de la Cruz had allegedly seen Villarreal
in Cebu City
on September 9, 1982 when the latter was supposed to have been in Dumaguete City
as stated in his assigned itinerary and as
declared by him in his Daily Call Report for that particular day.  Accusing Villareal
of “kiting” as the aforesaid practice is called, petitioner Losbanes
directed the former to explain in writing why he should not be recommended for
dismissal.  Realizing the gravity of such
accusation, Villareal immediately complied with the
said directive by submitting his answer on September 23.  In the said answer, he emphatically denied
the charges hurled at him and added that in all his fourteen years of service
to the company, not once had he indulged in the abhorred practice of
“kiting.” He then invited the company to conduct an investigation of
the matter and even submitted a certification
from 26 physicians covered by him on the 9th and 10th of September 1982, to
prove that he was in Negros Oriental performing his duties and not in Cebu City as claimed by Mr. de la Cruz.  Pending investigation of his case, Villareal
was suspended by the company for an indefinite period.

Without conducting any hearing whatsoever, Villareal
was notified in writing of his dismissal from the service on September 24, 1982 by petitioners Galang and Dortsman for allegedly
falsifying his Daily Call Report for September
9, 1982.  His dismissal was
to take effect on the 27th of the same month.

Hoping to present his side and in an attempt to change the
verdict reached by the petitioners, Villareal sought
out the latter on September 28, 1982
at the Montebello Hotel in Cebu
City where they were having a
meeting.  However, his pleas fell on deaf
ears inasmuch as the petitioners refused to speaks with him and curtly advised
him that his dismissal was a
closed matter as far as the company was concerned.  Instead, he was asked to turn over all
company assets in his
possession.  He complied with the
instructions.

Shortly thereafter, the company required him to sign a
letter-quitclaim as a condition for the issuance of a certificate of
employment.  This request was followed by
several checks issued in the name of Villareal which
purport to show that the company had already settled its obligation with
him.  A letter accompanying the said
checks stated that “while accepting the above payments, you confirm that
you have no claims whatsoever,
to presents against Roche (Phils.), Inc. in relation to your activity with
this Company or otherwise.”^[2]
    However, private respondent rejected
the same.

Realizing that there was no other way for him to clear his name, Villareal was prompted to seek redress by filing a
complaint with the National Labor Relation Commission.^[3]
Included in his complaint for illegal dismissal was his claim for 50% of the
savings obtained by the company from the cost-savings plan which he had devised
for the latter in response to an inter-office memorandums dated December 22, 1977, encouraging all
employees of Roche to come up with cost-savings proposal.  The said memorandums guaranteed an incentive of 50% share in any amount
saved during the first 12 months
of the implementation of the approved proposal. 
Private respondent claims that the petitioner company adopted his
proposals but the promised 50% share was never given to him despite repeated
demands.

After due consideration of
the evidence brought before him, the labor arbiter held^[4]
that the company was guilty of illegal dismissal.  It was ordered to pay the complainant unpaid
salaries, backwages, 13th month pay along with other
benefits and allowances.  In the event
that Villareal opted to retire, the company was ordered to pay him his retirement
benefits.  Damages amounting to P155,000.00
were also awarded.

 Petitioners interposed an
appeal with the respondent National Labor Relations Commission.  It proved to be futile since the appeal was dismissed for
lack of merit.  The decision appealed
from was affirmed, albeit with certain modifications, the dispositive
portions of which reads, thus:

“The respondents are hereby ordered:

To reinstate complainant to his former position without loss of
seniority rights and to pay him, jointly and severally, his full back wages and
benefits from the time compensation was withheld from him covering second half
of September 1982 up to the date of his actual reinstatement including all
benefits like the 13th month pay
and other benefits and/or allowances;

To pay complainant, jointly and severally, should he opt to retire,
retirement benefits at the rate of a month’s basic salary for every year of
service covering the period from September 1968 to September 1983 when he would
have been eligible for retirement, thence 1 1/2 month’s salary for every year thereafter
until his suppose reinstatement had he not
opted to retire.

Respondents are likewise ordered
to pay complainant, jointly and severally, 50% of the total amount saved by the
respondent corporation covering a period of 12 months from the adoption and
implementation of the cost-saving proposal of complainants provided should
there be no more existing records available as basis for computation the amount
is hereby fixed at FIVE HUNDRED THOUSAND PESOS (P500,000.00); Respondents
are further ordered to pay complainant, jointly and severally the sum of
P100,000.00 as Moral Damages; P50,000.00 as Exemplary Damages and 10% of the
total monetary awards as attorneys’ fees.

SO ORDERED,”^[5]
(Emphasis supplied.)

A motion for reconsideration
of the above-quoted Decision was denied in a minute resolution^[6]
of the respondent Commission.

Hence, the instant petition for certiorari where the
petitioners set forth the following questions for judicial determinations:

“A.  Whether or not the NLRC and the Arbiter acted
without or in excess of jurisdiction and/or committed grave abuse of discretion
amounting to lack of jurisdiction in:

1.  Finding the company
guilty of illegally dismissing Villareal for “kiting” committed through
falsifications of his daily call reports.

2.  Finding the company
guilty of denying Villareal the due process of law,
by dismissing him without any formal investigation;

3.  Finding Villareal entitled to the cost-saving bonus;

4.  Finding Villareal entitled to retirement benefits; and

5.  Finding the Company in
bad faith in dismissing Villareal, thus entitling the
latter to damages;

B.   Whether or not the NLRC acted without or in
excess of jurisdiction and/or committed grave abuse of discretion amounting to
lack of jurisdiction in granting Villareal additional
reliefs, even if the latter did not appeal from the
decisions of the Arbiter.”^[7]

This Court finds the petition bereft of merit.

Petitioners insist that they
have gathered sufficient evidence to dismiss Villareal
for “kiting” through falsifications of his Daily Call Report.  To bolster this allegation they presented the
testimony of Johnny de la Cruz who had allegedly seen Villareal
in Cebu City
at around 4:30 p.m. of September 9, 1982.  He averred that Villareal
greeted him with the following statement: 
“Sir, I’m coming in from Dumaguete
City.  I am not supposed to be officially
in yet.  Sir, don’t tell them that you
saw me.”^[8]
Suspecting that something was irregular, de la Cruz allegedly checked the Daily
Call Report filed by Villareal for the said date and
discovered that the latter reported that he was in Dumaguete
at that time.  These circumstances,
according to petitioners, clearly justify the termination of Villareal from employment because of “kiting.”

This Court finds the above-mentioned testimony doubtful.

First, it is unlikely that Villareal,
upon seeing an executive of the company, would go out of his way to confess his
misdeed especially to one he hardly knows, having met the latter only
once.  This kind of behavior runs
contrary to ordinary experience.  If it
was true that Villareal was in Cebu City
on that day, it would have been more natural for him to take all precautions to
avoid being seen by anyone from the company. 
Or if he was actually seen he would have kept mum about his infraction
of the rules.

Secondly, it cannot be denied that Roche (Phil.) is a big
organization.  It employs a great number
of medical representatives to promote its products.  Thus, it appears improbable that De la Cruz
would have been able to identify Villareal when the
latter was not even under his
direct supervision.  He met him only once
and casually.

Lastly, assuming Villareal was seen in Cebu City
at the time and he informed de la Cruz that he just arrived from Dumaguete, if so then he was not “kiting.” His violation, if at all, is that he returned
too soon.

In  denying that they have
deprived the right of Villareal to due process, the
petitioners pointed out that he was informed of the charges against him and he
was given the opportunity to explain his side. 
Citing Associated Citizen’s
Banks vs
Ople^[9], the petitioners attempted to
substantiate their arguments by mentioning that this Court had previously done
away with the holding of a hearing in order to comply with the constitutional
requirement of due process.

However, the circumstances obtaining in the above-cited case
bears no resemblance to the case at bar. 
The former contemplate a
situation where the employee admits his guilt and all his admissions are
corroborated by documentary evidence. 
Such is not the case in the present controversy where Villareal never admitted the commission of the offense he
has being charged of.  The records do not
indubitably show that Villareal was actually in Cebu City on that day. 
A hearing was, therefore, necessary to thresh out all doubts as to the conflicting allegation of De la
Cruz and Villareal.  The failure of petitioner to give private respondent the benefit of a hearing
and an investigation before his termination constitutes an infringement of his constitutional right to due process
of law.^[10]

Petitioners next assail the legality of the order of
reinstatement made by the respondent
commission by citing San Miguel
Corporation vs. NLRC^[11] where this Court found that reinstatement was improper
whenever the termination of an employee was due to breach of trust and
confidence.  Quoting certain passages
from the decision of this Court in the subsequent case of Wenphil Corporation vs. NLRC and Millarre,^[12]
petitioners tried to buttress this line of reasoning by stating that the
termination of an employee was proper since “it would be highly
prejudicial to the interests of the employer to impose on him the services of
an employee who has been shown to be
guilty of the charges that warranted his dismissal from employment.”^[13]

Again, an examination of the facts in the above cited cases shows that these two cases bear
no resemblance to the case at bar.  In Wenphil,
the employee was dismissed for his insubordination since he had flagrantly
violated company policy by engaging in a brawl with another employee within the company premises.  Likewise, in San Miguel Corporation,
the employee was dismissed for
having misappropriated company funds. 
The said funds were disbursed by the company to be used in posting bail
for the said employee when the latter was criminally charged with damage to
property through reckless imprudence. 
Upon the dismissal of the case, the employee deposited the cash bond in
his account instead of returning the said amount to the company.  No reasonable explanation was given by him
when confronted by his superiors. 
Considering the gravity of the offenses, taken together with the
evidence presented against the said employees, this Court found their dismissal
to be proper.

But such is not the case with Villareal
wherein the very credibility of
the only witness against him is put in issue. 
Furthermore, Villareal had served the company
for fourteen years with nary a complaint from his superiors such that an
offense like “kiting” would not have merited such a drastic
punishment as dismissal; that
is, if he were really guilty of the said offense.  Hence, the failure of the petitioner to prove
such fact “necessarily means that the dismissals is not justified,
and, therefore, the employee is entitled to be reinstated in accordance with
the mandate of Article 280 of the New Labor Code.”^[14]
Subsequent pronouncements of this Court reiterate this doctrine.  For instance, in Dabuet
vs. Roches Pharmaceuticals,^[15]
this Court held that reinstatement must follow as a matter of right whenever
the management has been found guilty of illegal dismissal.

Having established the impropriety of the dismissal of Villareal, thus requiring his consequent reinstatement, the
question as to his entitlement to retirement benefits arises.

The collective bargaining agreement entered into between the
management and the union provides for an optional retirement program for
employees who have been with the company for fifteens (15) consecutive
years.  The company undertook to pay the
basic pay for one month multiplied by the number of years the employee has
served the company for the first 15 years and a month and a half’s basic salary
for every year for the subsequent years.

The provisions of the collective bargaining agreement must be respected since its terms and
conditions “constitute the law between the parties.” Those who are
entitled to its benefits can invoke its provisions.  In the event that an obligations therein
imposed is not fulfilled, the aggrieved party has the right to go to court for redress.^[16]

The next issue is whether or not Villareal
is entitled to be paid the cost saving bonus of 50% of the amount saved by the
company for the year that his proposal was implemented.  This time the Court resolves the issue in the
negative.

Petitioners allege that the inter-office memorandum upon which Villareal bases his claim was not in effect when the latter
submitted his proposal.  Petitioners also
ask why Villarreal tarried for such a long time before filing the said claim if
he honestly believed that he was entitled to the same.  Petitioners further aver that even if Villareal
was legally entitled to the said bonus, prescription has set in under Article
291 of the Labor Code.  The aforementioned
article provides that “all money claims arising from employer-employee
relations accruing during the effectivity of this
Code shall be filed within three (3) years
from the time the cause
of action accrued, otherwise, they shall be forever barred.”

This Court cannot allow Villareal to
recover said claim at this late time.  He should have filed his claims against Roche
the moment his cause of action
accrued instead of waiting for five years before doing so.  He had, therefore, slept on his rights and should
not be rewarded for his own negligence. 
On this aspect, the Court must hold for the petitioners.

Petitioners then suggest that the respondent Commission abused
its discretion in awarding reliefs in excess of those
stated in the decision of the labor arbiter despite the absence of an appeal by
Villareal.  To
stress this point, they cited Section 5(c) of the Rules of Procedure of the
National Labor Relations Commission which provides that the Commission shall,
in cases of perfected appeals, limits itself to reviewing those issues which
were raised on appeal.  Consequently,
those which were not raised on appeal shall be final and executory.

There is no merit in this contention.  The records show that the petitioners
elevated the issues regarding the correctness of the award of damages,
reinstatement with backpay, retirement benefits and
the cost-saving bonus to the respondent Commission in their appeal.  This opened the said issues for review and
any action taken thereon by the Commission was well within the parameters of
its jurisdiction.

With regard to the propriety of the award of moral damages, this
Court, in a long line of cases, has consistently granted the lowly workingman
the right to recover damages for unjust dismissals tainted with bad faith.  In the instant petition, the motive of the
company in dismissing Villareal was far from noble as borne by the circumstances
surrounding such dismissal.

Petitioners must have known that Villareal,
who had been their employee for fourteen (14) years, had only one year to serve
before he could avail of the benefits of the optional retirement plan
stipulated in the collective bargaining agreement.  Consequently, the latter would be receiving a
considerable sum of money from the company and the only way they could avoid
this obligation was to find a reason, no matter how flimsy, to terminate the
employment of Villareal.  Conveniently, indeed, petitioners discovered
that Villareal was “kiting” and outrightly dismissed him on the basis of the
unsubstantiated allegations of one person. 
Their bad faith was made more apparent by their refusal to conduct a
formal investigation to give Villareal
an opportunity to traverse the charges against him.  The judgment of the respondent Commission
regarding the award of damages plus ten percent (10%) of the entire monetary
award must, therefore, be sustained.

Lastly, the backwages awarded to Villareal should not exceed three (3) years.

WHEREFORE, with the modification eliminating the award
for cost saving bonus and that the backwages should
not exceed three (3) years, the decision of the respondent NLRC is affirmed in all other respects, with costs against petitioners.

SO ORDERED.

Narvasa, (Chairman), Cruz, Griño-Aquino, and Medialdea, JJ., concur.

^[1]
Penned by Commissioner Oscar Abella and concurred in by Commissioners Zapanta
and Lucas, Jr.

^[2]
Page 182, Rollo.

^[3]
The case was assigned to Labor Arbiter Vito J. Minoria.

^[4]
Page 7, Labor Arbiter Decision; Page 33, Rollo.

^[5]
Page 98, Rollo.

^[6]
Dated March 14, 1988.

^[7]
Pages 139-140, Rollo.

^[8]
Page 182, Rollo.

^[9]
103 SCRA 130 (1981).

^[10]
BLTB Bus Co. vs. Court of Appeals, 71 SCRA 470 (1976); see
also Batas Pambansa Blg.
130.

^[11]
125 SCRA 805 (1983).

^[12]
G.R. No. 80587, February 8, 1989.

^[13]
Ibid.  Emphasis supplied.

^[14]
Polymedic General
Hospital vs. NLRC, 134 SCRA
420, 424 (1985), Emphasis supplied.

^[15]
149 SCRA 386 (1987).

^[16]
Mactan Workers Union vs. Aboitiz,
45 SCRA 577, 581 (1972), citing Shell Oil Workers Union vs. Shell Company of the Philippines,
39 SCRA 276 (1971).