NORMAN DE VERA, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND BANK OF THE PHILIPPINE ISLANDS, INC., RESPONDENTS.

The twin requirements of notice and hearing are essential
elements of due process in cases of employee dismissal.  Failure to satisfy these requisites has been
recognized to be fatal.  This orthodoxy
is not about to be abandoned yet.

The paramount question is whether or not the requirements of due
process were substantially complied with in dismissing an employee, after an
inquiry conducted for the purpose of filing a criminal case against another
employee.  The respondents contend that
it is sufficient.  The petitioner holds
otherwise.

The decision in question pertains to the National Labor Relations
Commission (NLRC, for brevity),^[1]
promulgated on March 8, 1990, deleting the award of separation pay granted by
the labor arbiter to the herein petitioner.

The material facts, as culled from the records of the case, are
as follows:

Petitioner Norman de Vera was an Assistant Cashier at the Taft
Avenue Branch of the respondent Bank of the Philippine Islands (BPI, for
brevity), when he was placed under preventive suspension then subsequently
dismissed.  By then, he had served the
respondent bank for a total of twenty five (25) years, more or less.

The petitioner’s predicament started on May 28, 1987, when the
representatives of ASB Realty Corporation (ASB, for brevity) presented to the
BPI Taft Avenue Branch a P10-million RCBC Manager’s Check payable to BPI for
the time deposit account of ASB.  The
branch manager, Rebecca Dizon, asked the petitioner
to present the check to the drawee bank for special
clearing, which the latter did.  RCBC
cleared the P10-million check and a Special Clearing receipt was subsequently
issued to the petitioner, which receipt was in turn given to Branch Manager Dizon.

Meanwhile, Dizon and teller Myrna Apostol presented to the petitioner for the latter’s
initials three (3) personal checks with a total amount of P1,650,000.00, all
drawn against the account of one Daniel Martinez.  The petitioner claims that since he is one of
the validating officers for the encashment of checks, as per bank procedure
requiring two (2) officers to approve transactions of P50,000.00 and above, and
since the said checks had already been encashed under
the orders of Dizon, his superior, he endorsed
them.  In short, the
“transaction” was already fait accompli when the petitioner entered
the picture.

Afterwards, Dizon apparently made a
mistake (or slipped) and handed to the petitioner for his signature Time
Certificate of Deposit (TCD, for brevity) No. 119762 with a face value of P10
million.  The petitioner asserts that
“he got the shock of his life, became tongue-tied and refused to affix his
signature” after realizing that the said TCD contained his forged
signature.

Later that day, Dizon entered ASB’s check in the computer at the BPI Roxas
Boulevard Branch (since the computers at the Taft Avenue Branch were out of
order), not in ASB’s account, but instead, in the
account of Daniel Martinez.

On the following day, May 29, at around 10:00 o’clock a.m., ASB’s representative informed BPI Vice-President Rogelio Nera that ASB had placed a P10-million time deposit with BPI’s Taft Avenue Branch. 
Vice-President Nera then called the Branch to
verify the transaction.  He talked to the
petitioner who said that it was Dizon who had full
knowledge of the transaction, but that Dizon had not
yet reported for work at that time. 
Vice-President Nera then requested for a
return call from Dizon.  The petitioner later relayed the
Vice-President’s request to Dizon who allegedly
ignored the same.

After office hours, petitioner de Vera, together with BPI Asst.
Manager Virgilio Ventura, informed BPI Asst. Vice
President Gregorio Santayana of the forged signature on the TCD and its
apparent irregular issuance.

On the 30th of May 1987, a non-working Saturday, a group composed
of the petitioner, Asst. Managers Virgilio Ventura
and Abelardo Ortiz, and Ret. General Bueno, head of BPI Security, proceeded to the BPI Taft
Avenue Branch and examined its books. 
They discovered that the P10-million time deposit of ASB was diverted to
the personal account of Martinez.

Several personal and cashier’s checks drawn against the account
of Martinez were then intercepted and retrieved, and the remaining balance in
his checking account was frozen. 
However, by then, around P3-million had already been withdrawn, although
this was refuted by the petitioner who argued that since some three (3) checks
amounting to P1.4-million had been “stopped payment”, the actual
amount withdrawn was only P1,650,000.00, and not P3-million as claimed by the
respondent bank.

Pending further investigation, allegedly to ascertain the extent
of the loss to the bank, and to pinpoint responsibility of the parties
involved, the petitioner, on June 4, 1987, received a Notice of Preventive
Suspension dated June 2, 1987.

On the following day, June 5, 1987, the petitioner was queried
regarding the incident.  This was
followed by an interview with the Criminal Investigation Service (CIS, for
brevity) on June 8, 1987, when the petitioner was summoned by Ret. General Bueno to give a statement in connection with the estafa case filed by the respondent bank against Daniel
Martinez.

The bank, in the course of its investigation, also uncovered a
similar pattern of operation which had transpired earlier.  On May 5, 1987, the NAFP Retirements and
Separation Benefit System (NAFP-RSBS, for brevity) issued a P4.7-million check
in favor of the respondent bank in consideration of a P5-milion TCD placement
with the Taft Avenue Branch.  The
P4.7-million was the net of the front end discount of six per centum (6%) of
the face value of the TCD granted by Dizon to
NAFP-RSBS as an incentive for placing the money with the bank.  However, it turned out that this was neither
deposited nor credited in the account of NAFP-RSBS, but instead in the account
of a certain Russel, Crame
and Co., Inc. (Russel, for brevity) whose authorized
signer is the same Daniel Martinez.

By the time the irregularity was discovered, four (4) checks, all
payable to cash and drawn against the account of Russel,
had already been encashed at the Taft Avenue Branch,
three of which were jointly approved by Dizon and the
peti­tioner.  Thereafter, eleven (11)
other checks drawn against the account of Russel,
four of which had an aggregate amount of P2,578,480.00, were discovered to have
been approved for encashment by Dizon, together with
the petitioner.  It must, however, be
noted that nowhere in the records was there an indication that the petitioner
was questioned regarding this anomaly involving the account of the NAFP-RSBS.

On August 3, 1987, the petitioner received a Notice of
Termination dated July 10, 1987, terminating his services on the ground of
fraud or willful breach of trust and setting forth therein the transgressions
he had allegedly committed.

Aggrieved, the petitioner, on August 6, 1987, commenced this
proceeding by filing a case with the NLRC. 
On December 7, 1988, Labor Arbiter Evangeline Lubaton
rendered a decision on the sole basis of the pleadings presented and the
evidence attached thereto, the dispositive portion of
which is quoted hereunder, a savoir:

WHEREFORE, premises considered, judgment is hereby rendered
ordering the Bank of the Philippine Islands to pay Norman M. de Vera separation
pay according to bank policy, or in the absence thereof, equivalent to one-half
month pay for every year of service plus all other benefits, privileges and
emoluments he may have been entitled to at the time of his termination from his
employment.

The claims for moral and exemplary damages, attorney’s fees and
costs of suit are hereby dismissed for lack of merit.

SO ORDERED.^[2]

The respondent bank, not satisfied with the labor arbiter’s
decision, interposed an appeal with the NLRC. 
The Second Division of the NLRC then promulgated a resolution on March
8, 1990, holding that the requirements of due process were substantially
complied with and accordingly, deleted the award of separation pay.  The petitioner’s subsequent motion for
reconsideration was later denied by another resolution.^[3]
These resolutions are now assailed in this special civil action for certiorari.

The petitioner basically contends that the respondent NLRC
committed a grave abuse of discretion in holding that his dismissal had indicia
of due process.  He also claims that he
is entitled to reinstatement or separation pay, plus full backwages
and all other benefits, in either case. 
He stresses that while it is true that he was interviewed and later
summoned by the CIS to give sworn statements in connection with the anomalous
transaction, he was not aware that he was already being indicted and tried for
an offense of which he was never informed. 
To support his contentions on due process, the petitioner cited Sections
1 to 6 of Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code,^[4]
which lay down the procedure taken in cases of termination of employment.

On the other hand, the respondent bank posits that the Notice of
Preventive Suspension received by the petitioner was sufficient notice since
the tenor of the letter itself should have already alerted the latter that the
investiga­tion then being conducted was partly being done to determine the
extent of the latter’s involvement in the anomalies.  Furthermore, it would have been unlikely for
a person not suspected of involvement in the anomalies to be suspended pending
investigation.  Precisely, the petitioner
was suspected of complicity in the swindle. 
And if the Notice of Preventive Suspension was not sufficient notice,
certainly the subsequent interviews should have placed the petitioner on notice
that he was suspected of possible involvement in the swindle.^[5]

The respondent NLRC likewise contends that it is “hard to
believe that a person with the education and position as that of the
complainant (herein petitioner) after having gone through rigorous
interrogations would still fail to convince himself of being suspected and
investigated for possible complicity in the respondent bank’s swindle.  In fact, his answers to the questions then
propounded or his explanation given thereto were all in defense or designed to
show his innocence or non-connection with the culprits.”^[6]

The respondents also submit that the petitioner was given ample
opportunity to be heard.  The petitioner
was allowed to explain his side when he was questioned on June 5, 1987
regarding the incident.  Three days
later, he was given another opportunity when he was summoned by the CIS.

The private respondent further claims that “what the due
process clause of the Constitution proscribes is the total absence of the
chance to be heard.  If a party was not
initially given a chance to be heard (i.e., at the level of a school panel of
investigators) but later was given full opportunity to present his case and
arguments (i.e., before the arbitration branch of the NLRC), this defect is
cured.”^[7]

Consequently, the respondents submit that the petitioner is not
deserving of the reinstatement prayed for nor of any award for separation
pay.  They contend that the petitioner
“had deliberately shied away from performing the legal and moral duty of
reporting peremptorily [sic] the anomaly to his employer, an act of
indiscretion of the highest order, or, better still, a deliberate omission or
prevarication which undoubtedly makes him unworthy of being awarded the bonanza
of separation pay.  A contrary ruling
would have the net effect of rewarding the complainant for betraying the
interest of his employer.”^[8]

The Court rules that the petitioner, Norman de Vera, was denied
due process of law.  Accordingly, his
dismissal is hereby declared illegal.

The respondents’ submissions that the Notice of Preventive
Suspension is adequate notice and the subsequent interviews ample opportunities
to be heard are devoid of merit.  We have
laid down in Ruffy v. NLRC^[9]
and in Tingson v. NLRC^[10]
the procedure to be observed by an employer who seeks to dismiss an
employee.  Once more, we quote the Labor
Code:

x x
x.  HOWEVER,
THE EMPLOYER SHALL FURNISH THE WORKER WHOSE EMPLOYMENT IS SOUGHT TO BE
TERMINATED A WRITTEN NOTICE CONTAINING A STATEMENT OF THE CAUSES FOR
TERMINATION AND SHALL AFFORD THE LATTER AMPLE OPPORTUNITY TO BE HEARD AND
DEFEND HIMSELF WITH THE ASSISTANCE OF HIS REPRESENTATIVE IF HE SO DESIRES IN
ACCORDANCE WITH COMPANY RULES AND REGULATIONS PROMULGATED PURSUANT TO
GUIDELINES SET BY THE MINISTRY OF LABOR AND EMPLOYMENT.  x x x^[11]

These requirements of notice and hearing
are recited anew in the rules implementing the above-cited provision, supra,
as correctly pointed out by the petitioner. 
Definitely, the Notice of Preventive Suspension can not be considered
adequate notice since the objectives of the petitioner’s preventive suspension,
as stated in the notice, were merely to ascertain the extent of the loss to the
bank, and to pinpoint responsibility of the parties involved, and not to apprise
the petitioner of the causes of his desired dismissal.  Likewise, the subsequent interview is not the
“ample opportunity to be heard” contemplated by law.  Ample opportunity to be heard is especially
accorded to the employee sought to be dismissed after he is informed of the
charges against him in order to give him an opportunity to refute the
accusations levelled against him, and it certainly
does not consist of an inquiry conducted merely for the purpose of filing a
criminal case against another person.

Similarly, the respondents’ position that the petitioner, with
his education and position, should have realized, after going through some
rigorous interrogations, that he himself was being suspected and investigated
for possible complicity in the anomalies is unacceptable.  The petitioner as an assistant cashier is not
expected to be proficient with the intricacies of law and procedure.  He should not be faulted if he relied on the
statement of the private respondent that the investigation was being conducted
in connection with the criminal case filed against Martinez, and consequently
failed to realize that he himself was being suspected for possible involvement
in the fraud.  In fact, the private
respondent should be admonished for provoking self-incriminating statements
from the petitioner under the guise of conducting an investigation for some
other reason.

Furthermore, this Court has repeatedly held that the employer is
mandated to furnish the employee sought to be dismissed two notices, the written
charge, and the notice of dismissal, if, after hearing, dismissal is indeed
warranted.^[12]
No written charge was ever furnished the petitioner in this case.

The respondents then claim that the alleged defects in due
process were cured when the petitioner presented his case and arguments before
the NLRC.  This is untenable.  The case before the NLRC is the petitioner’s
complaint for illegal dismissal.  At that
time, he had already been terminated. 
What the Labor Code sets forth is the procedure prior to dismissal.^[13]
“Fire the employee, and let him explain later” is not in accord with
the due process under the law.^[14]

We can not accept claims of “a wider latitude of
discretion”^[15]
of management in the discipline of managerial employees.  First, management’s discretion is subject to
the requirements of due process.

As we held, “loss of confidence”, as a ground for
dismissal, must rest on “some basis”.^[16]
Here, none has been established, for the plain reason that the petitioner was
never investigated or heard in his defense. 
It can not be said therefore that he is guilty–to justify management’s
claim of loss of trust.  To that extent,
this case must be distinguished from PLDT v. NLRC,^[17]
where “theft” was established clearly and convincingly and no
question of due process was involved.

Due process, as we also held,^[18]
is applicable to managerial employees. 
In the absence thereof, any dismissal becomes unlawful and reinstatement
plus backwages are warranted.

WHEREFORE, the petition is GRANTED.  The RESOLUTION of the public respondent is
hereby ANNULLED and SET ASIDE.  The
private respondent is ORDERED to REINSTATE petitioner NORMAN DE VERA to his
former or equivalent position without loss of seniority rights and other
benefits with BACKWAGES equivalent to three years, without qualifications and
deductions.

SO ORDERED.

Melencio-Herrera, (Chairman) and Regalado, JJ., concur.

Paras
and Padilla, JJ., no part.

^[1]
Second Division; Decision penned by Commissioner Edna Bonto-Perez
(Presiding Commissioner), concurred in by Commissioners Domingo Zapanta and Rustico Diokno.

^[2]
Rollo, 69.

^[3]
Resolution dated April 16, 1990.

^[4]
SECTION 1.  Security of tenure and due
process.  No worker shall be
dismissed except for a just or authorized cause provided by law and after due
process.

SEC. 2.  Notice of dismissal.  Any employer who seeks to dismiss a worker
shall furnish him a written notice stating the particular acts or omission
constituting the grounds for his dismissal. 
In cases of abandonment of work, the notice shall be served at the
worker’s last known address.

SEC. 3.  Preventive Suspension.  The employer may place the worker concerned
under preventive suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or his co-workers.

SEC. 4.  Period of Suspension.  No preventive suspension shall last longer
than 30 days.  The employer shall
thereafter reinstate the worker in his former or in a substantially equivalent
position or the employer may extend the period of suspension provided that during
the period of extension, he pays the wages and other benefits due to the
worker.  In such case, the worker shall
not be bound to reimburse the amount paid to him during the extension if the
employer decides, after completion of the hearing, to dismiss the worker.

SEC. 5.  Answer and hearing.  The worker may answer the allegations stated
against him in the notice of dismissal within a reasonable period from receipt
of such notice.  The employer shall
afford the worker ample opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires.

SEC. 6.  Decision to dismiss.  The employer shall immediately notify a
worker in writing of a decision to dismiss him stating clearly the reasons
therefore.

^[5]
Rollo, 95-96.

^[6]
Ibid., 77.

^[7]
Id., 97-98, citing Montemayor v.
Araneta University Foundation, No. L-44251, May 31,
1977, 77 SCRA 321.

^[8]
Id., 49.

^[9]
G.R. No. 84193, February 15, 1990, 182 SCRA 365.

^[10]
G.R. No. 84702, May 18, 1990, 185 SCRA 498.

^[11]
Sec. 13 of Batas Pambansa Bilang
130, an act amending certain provisions of the Labor Code.

^[12]
Tingson v. NLRC, supra; National
Service Corp. v. NLRC, Nos. 69870 and 70295, November 29, 1988, 168 SCRA
122, citing Sections 2 and 6 of Rule XIV, Book of the Omnibus Rules
Implementing the Labor Code, supra.

^[13]
Tingson v. NLRC, supra.

^[14]
Ruffy v. NLRC, supra.

^[15]
Manila Midtown Commercial Corp. v. Nuwhrain,
No. 57268, March 25, 1988, 159 SCRA 212; although erroneously cited by the
private respondent to be found at 168 SCRA 722.

^[16]
Starlite Plastic Industrial Corp. v. NLRC,
G.R. No. 78491, March 16, 1989, 171 SCRA 315.

^[17]
G.R. No. 80609, August 23, 1988, 164 SCRA 671.

^[18]
Offshore Industries, Inc. v. NLRC, G.R. No. 83108, August 29, 1989, 177 SCRA 50.