EDWIN DEL CARMEN, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, RESPONDENTS.

Del Carmen versus National Labor Relations Commission and Philippine Long Distance Telephone Company

The Case

This is a petition for certiorari filed by Edwin Del Carmen against the National Labor Relations Commission and the Philippine Long Distance Telephone Company, asking the Supreme Court to annul the Commission's decision dismissing his complaint for illegal dismissal. The case matters because it draws the boundary between the protection the law gives to labor and the right of management to dismiss an employee whom it has reasonable ground to distrust. It is a classic lesson on loss of confidence as a just cause for termination, and on the compassion the Court may still extend even to an employee validly dismissed.

Procedural History

Del Carmen filed a complaint for illegal dismissal and unpaid wages before the Labor Arbiter. After due hearing, Labor Arbiter Jose G. de Vera rendered a decision declaring the dismissal illegal and unjust, and ordering the company to reinstate Del Carmen to his former or substantially equivalent position with all rights and privileges, including backwages from September 6, 1988 until actual reinstatement.

The company appealed to the National Labor Relations Commission. The Commission set aside the Labor Arbiter's decision and dismissed the complaint, holding that Del Carmen's overt acts showed a clear intent to take the company's drop wires into his house, which it characterized as pure and simple fraud, a just cause under paragraph (c) of Article 282 of the Labor Code. Del Carmen's motion for reconsideration was denied. He then came to the Supreme Court through this petition for certiorari, alleging grave abuse of discretion amounting to a capricious and whimsical exercise of judgment.

Facts

Edwin Del Carmen was an installer and repairman of the Philippine Long Distance Telephone Company. On April 27, 1988, he was on board a company service vehicle with a co-employee, on their way to service telephone facilities at the Department of Agriculture. He asked the driver to drop by his residence in Project 6, Quezon City, so he could leave a bag of clothes he had brought from San Fernando, Pampanga. According to Del Carmen, he unloaded a roll of telephone drop wire that had been resting atop his bag, brought the bag inside, and was reloading the wire when security inspector Feliciano Ramones, Jr. arrived, took the wire from him, and apprehended him. The company's version is that Del Carmen was caught in the act of delivering the wire to his residence, that he refused to surrender it and claimed ownership, and that it was only after a struggle that the inspector got hold of it.

Security personnel later entered Del Carmen's house, with his consent according to the company, and found a black telephone instrument, two master set telephone instruments, one hundred feet of parallel wire, and fifty feet of jacketed wire, all owned by the company. Del Carmen insisted these were left with him for safekeeping, a practice he claimed was not prohibited at the time. The company also accused him of illegally buying drop wires and jacketed wires from co-installers for personal gain.

A letter-memorandum required him to explain why he should not be dismissed. At his own request, an investigation was conducted where he was given a chance to present evidence. On September 6, 1988, he was dismissed for serious misconduct and fraud. The company's records proved decisive: his daily material consumption and work report for the period covering April 18 to 26, 1988 showed a stock balance of only three hundred feet of wires and one gray telephone instrument, yet on April 27 he had in his possession a one thousand foot roll of drop wire, three telephone instruments, one hundred feet of parallel wire, and fifty feet of jacketed wire.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion in reversing the Labor Arbiter and finding that Del Carmen was validly dismissed.
• Whether or not the dismissal of Del Carmen was supported by a just cause under Article 282 of the Labor Code.
• Whether or not Del Carmen is entitled to separation pay despite the affirmance of his dismissal.

Applicable Provisions

Article 282 of the Labor Code, which the Court quotes in full, provides:

Article 282. Termination by employer. An employer may terminate an employment for any of the following just causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing.

Paragraph (c) is the provision the Commission invoked, and it is the provision the Court applies in sustaining the dismissal for fraud and willful breach of trust.

Ruling

On the first issue, the Court held that the Commission did not commit grave abuse of discretion. There was ample evidence to support its findings. It was undisputed that all the equipment and materials in Del Carmen's possession belonged to the company, and his claim that it was normal for an installer to possess such materials did not relieve him of liability. His own daily material consumption and work report showed that his stock balance at the end of April 26, 1988 consisted only of three hundred feet of wires and one gray telephone instrument, yet the next day he had far more. Except for his bare allegation, he presented no evidence that the excess materials were issued to him and under his accountability.

On the second issue, the Court ruled that the unexplained possession of materials patently in excess of, or not declared in, his work report was a sufficient basis for the company's loss of confidence arising from serious misconduct and breach of trust. The Court laid down the standard in these words:

It is sufficient if there is some basis for such loss of confidence or if the employer has reasonable ground to believe or to entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position.

The Court stressed that proof beyond reasonable doubt is not required. It added that where an employee has been guilty of breach of trust, a labor tribunal cannot deny the employer the authority to dismiss him, and that the law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. Honesty and integrity were primary considerations in Del Carmen's position, and empathy with the cause of labor should not blind the Court to the rights of management.

On the third issue, however, the Court tempered its ruling. Considering the circumstances, the fact that no economic loss was sustained by the company, and the number of years Del Carmen had served, the Court held it just and reasonable to require the company to pay him separation pay.

Doctrine

Loss of confidence is a valid ground for dismissing an employee under paragraph (c) of Article 282 of the Labor Code, and proof beyond reasonable doubt of the misconduct is not required. It is sufficient that there is some basis for the loss of confidence, or that the employer has reasonable ground to believe that the employee is responsible for the misconduct and that his participation rendered him absolutely unworthy of the trust and confidence demanded by his position. Unexplained possession of company property in excess of what appears in the employee's own material consumption report is a sufficient basis for that loss of confidence. The law, in protecting labor, authorizes neither oppression nor self-destruction of the employer. Yet where no economic loss was sustained and the employee has served for a number of years, separation pay may be awarded in lieu of reinstatement.

Disposition

The petition was denied. The decision and resolution of the National Labor Relations Commission were affirmed, with the modification that the Philippine Long Distance Telephone Company was directed to pay Del Carmen separation pay.

Remember This

Memorize the line that loss of confidence requires only some basis, not proof beyond reasonable doubt. Examiners use this case to test the just causes under Article 282, the employer's prerogative to dismiss for breach of trust, and the award of separation pay as a humanitarian modification even when the dismissal is upheld.