TALAGA BARANGAY WATER SERVICE COOPERATIVE, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, (THIRD DIVISION), AND NEMESIA OPENA, RESPONDENTS.

The instant petition for certiorari seeks to annul and set
aside, on ground of grave abuse of discretion amounting to lack of
jurisdiction, the following:

(a)     Decision dated
September 4, 1989 of respondent National Labor Relations Commission (NLRC)
holding that the dismissal of private respondent Nemesia D. Opena by the Board
of Directors of petitioner Talaga Barangay Water Service Cooperative is not
valid and ordering the payment of backwages and separation pay to her in lieu of reinstatement; and

(b)     Resolution dated
August 10, 1989 of the same respondent modifying the Decision dated September
4, 1989 by ordering the reinstatement of private respondent to her former
position with full backwages not exceeding three (3) years.

Petitioner is a business entity engaged in water service and
distribution among the different members within the Barangay. Private respondent started working with
petitioner way back in October 1979, as bookkeeper and cash collector. She was promoted to the position of System
Superintendent in September 1981. She
was also a committee member of petitioner’s Education and Training Committee.

On April 30, 1987, the Chairman of the Board of Directors of
petitioner issued a memorandum suspending private respondent because she
allegedly refused to install a water line gadget for Ramon Magpantay. The same body issued another memorandum on
April 17, 1988 terminating private respondent’s services effective May 1, 1988
for the following reasons:

“1.     Shortage of collection
as per audited financial statement for the year 1984.

“2.     Insubordination:

‘(a) refusal to accept
collection as per Board Memorandum dated January 8, 1987.

‘(b) Refusal to install the
disconnected water service of Ramon Magpantay as per memorandum dated April 30,
1987, wherein you suffered suspen­sion.

‘(c) Recommendation of Mr.
Filemon Ramos a PD’s
representative to dismiss you from the service based on documented evidences of
suspension.

‘(d) Disobeying the orders
of the Vice-President in the distribution of water to different sectors of the
barangay.

‘(e) Cranky attitude
towards members and subordinates.

‘(f) Giving derogatory
remarks causing too much insult to Directors

“3.  Lack of competence despite of your long
experience in the service in dealing with members and subordinates as evidenced
by verbal complaints likewise as indicated in Memorandum dated April 20,
1987.” (pp. 28-29, Rollo)

Consequently, on July 6, 1988, private respondennt filed a
complaint against petitioner for illegal suspension and illegal dismissal.

The Labor Arbiter rendered his decision on April 19, 1989
declaring legal the suspension and termination of private respondent. The dispositive portion of the said decision
reads:

“WHEREFORE, premises considered, judgment is hereby entered
dismissing the above-entitled case for lack of merit. Respondent, however, is ordered to pay complainant financial
assistance equivalent to three (3) months pay based on her latest salary.

“SO ORDERED.” (p. 58, Rollo)

Private respondent appealed to the National Labor Relations
Commission. On September 4, 1989, the
NLRC rendered its Decision, setting aside the Decision of the Labor Arbiter on
the grounds that –

“(a)    Being both an
officer and committee member, private respondent’s termination can only be
effectuated by the National Assembly pursuant to Section 3, subsection (a) of
the Constitution and By-Laws of petitioner and not by the Board of
Directors. This indubitably renders the
dismissal of private respondent by the Board of Directors of petitioner, null, void and illegal from the
outset.

“(b)    The alleged
infractions were not sufficiently and clearly established, and more
importantly, private respondent was not culpable thereof.” (p. 30, Rollo)

However, the respondent Commission merely required petitioner to
pay private respondent separation pay in lieu of reinstatement and backwages,
as follows:

“WHEREFORE, premises considered, the Decision dated April 19,
1989 is hereby SET ASIDE and a new one entered ordering respondent to pay
complainant (1) separation pay equivalaent to one-half (1/2) month’s pay for
every year of service, in lieu of reinstatement; and (2) backwages from May 1,
1988 up to the date of promulgation of this Decision.

“SO ORDERED.” (pp. 38-39, Rollo)

Both parties moved for the reconsideration of the aforesaid
decision.

On August 10, 1990, the respondent Commission modified its
earlier Decision by ordering the reinstatement of private respondent with full
backwages, not exceeding three (3) years, as follows:

“WHEREFORE, premises considered, the resolution of this
Commission dated September 4, 1989 is hereby modified. Respondent is hereby ordered to reinstate
complainant to her former position without loss of seniority rights and with
full backwages until her reinstatement, which in no case shall exceed three (3)
years.” (p. 48, Rollo)

Hence, this petition. The
following grounds are relied upon to warrant the grant thereof:

I

PUBLIC RESPONDENT NLRC COMMITTETD GRAVE
ABUSE OF DISCRETION IN RULING THAT IT IS NOT THE BOARD OF DIRECTORS WHO HAS THE
POWER TO TERMINATE THE SERVICES OF PRIVATE RESPONDENT NEMESIA OPENA.

II

PUBLIC RESPONDENT NLRC (THIRD DIVISION)
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO OR IN EXCESS OF JURISDICTION
IN HOLDING THAT PRIVATE RESPONDENT NEMESIA OPENA WAS ILLEGALLY DISMISSED,
INSPITE OF CLEAR AND CONVINCING EVIDENCE THAT HER DISMISSAL FROM THE SERVICE
WAS JUSTIFIED FOR LOSS OF TRUST AND CONFIDENCE AND FOR CONDUCT INIMICAL TO THE
EMPLOYER. (p. 18, Rollo)

We find the petition devoid of merit.

Section 3, subsection (a), Art. III of the Constitution and by-laws
of petitioner explicitly provides that the General Assembly has the power to
elect and remove directors, officers and committee members for cause. This power to remove was not given to the
Board of Directors. Records show that
private respondent was at the
time of her dismissal, both an
officer and committee member. This
being the case, her removal can only be made by the General Assembly.

On this point, the Court agrees with the following observations
of the respondent Commission, to wit:

“In resolving the first issue, the Commission finds the
portions of the constitution and by-laws of appellee’s cooperative which are
submitted and marked as exhibits 12, 13, and 13-A for appellant (pp. 150-152,
Records), as well as Annex J of appellee’s
position paper (p. 20, Records) to be the pertinent documents to consider.

“Under Section 3, subsection (a), Article III, thereof, it is
explicitly stipulated that:

‘Section 3. Powers and
limitations of the General Assembly – The General Assembly has the powers:

‘(a)        To
elect and remove directors, officers and com­mittee members for causes.’

“On the other hand, under Section 15 thereof which enumerated
the powers and duties of the Board of Directors, while it has been granted
under subsections (d) and (e) the power to ‘elect the officers of the
Cooperative’ and ‘to appoint other employees if it deems necessary, who may not
be members of the cooperative and fix their compensation’ and also under
Section 7, subsection (a) (Annex J, p. 20, Records) where it has been given the
power to appoint the System Superintendent, nowhere do We find that it was
equally granted the power or authority to remove as in the case of the General
Assembly which has been expressly granted the power of removal. Under statutory construction, the rule that
‘what has not been expressly included is deemed excluded’ properly applies.

“There is no doubt that the position of a System
Superintendent is that of an officer. It is a position created under Section 7 (Annex J) and also as
classified under Section 15, subsection (m) (Exhibit 13-A, p. 152, Records)
which provides:

‘(m) To fix the amounts of bonds and
cause the bonding of Treasurer, System Superintendent and any other
accountable officers or employees charged with the custody of the Cooperative’s
funds and properties.’

“There is also evidence that appel­lant was also a committee
member of the Education and Training Committee (Annex D of Respondent’s
position paper, No. 8 of Board of Resolution dated April 3, 1988, p. 27,
Records).

“It is, therefore,
clear that being both an officer and committee member, appellant’s termination
can only be effectuated by the General Assembly pursuant to Section 3,
subsection (a) of the Constitution and By-Laws of appellee and not by the Board
of Directors as was done in the
case at bar. This indubitably renders
the dismissal null, void and illegal from the outset.” (pp. 29-30, Rollo)

We also sustain the following finding of respondent Commission that
the alleged infractions were not sufficiently and clearly established and that
appellant was not culpable thereof.

“We have, in Our scrutiny of the records, taken note of the
offenses and/or violations alleged to have been committed by the complainant. The alleged shortage of P2,140.00 incurred
in 1984, (Exhibits F, G, H), which complainant explained to have been given to
a deceased member of the cooperative, by the then President Mr. Lorenzo
Rodriguez, substantiated by picture of the wake and tender of payment, (Rollo
143). The alleged insubordination case
which led to complainant’s suspension, in the matter of the complaint of Ramon
Magpantay (Exhibit J), whose water disconnection was made by reason of
non-payment of bills as admitted by Mr. Magpantay (Rollo 146), the libelous
utterances of Magpantay as reported by Natalio Rodriguez, (Exhibit 8-A, Rollo
146), complainant report (sic) to the Board on the incident, (Rollo, 147,
Exhibit 9-A). That by said incident,
complainant was suspended for alleged ‘harassment of the members of business’
(Rollo 149). The case of water user
Miguel Quilao (Exhibit C), who was accused for having been found to have
magnetic piece of iron on his water meter as reported by (sic) inspector. It is surprising (sic) to note that while
respondent claim as a basis for termination the alleged loss of trust and
confidence by reason of the shortage in 1984 (sic), respondent other (sic)
alleged incident, is the alleged refusal of complainant to perform the function
as cash collector in January 9, 1987. This appears to be contradictory to (sic) other assertion of loss of
trust by reason of the shortage.

“All told, we are of the considered opinion that the alleged
ground and incidents cited has been satisfactorily explained by complainant.”
(pp. 44-45, Rollo)

The findings of fact of the NLRC are conclusive on this Court in
the absence of a showing that they were arrived at arbitrarily. (De Vera v. NLRC, 191 SCRA 632). The petitioner has failed to show such
arbitrariness.

As a rule, the Court recognizes the prerogative of the employer
to order merely payment of backwages plus separation pay in lieu of
reinstatement even when the employee was eventually cleared of the charges,
where relations between employer and the employee are so strained or where an
employee would no longer be useful because his employer has lost trust and
confidence in him. However, this rule
is not without exception. In the case
of Sibal v. Notre Dame of Greater Manila, 182 SCRA 538, the Court held:

“xxx Clearly, therefore, when the assailed NLRC decision was
rendered on April 11, 1986, the alleged ‘strained relations’ or ‘irritant
factors’ which the Labor Arbiter capitalized on had been totally
eliminated. Respondent NLRC obviously
failed to consider this and thus perpetrated the error committed by the Labor
Arbiter in her prior decision. The
eventual replacement of Fr. Garcia all the more confirmed the discretionary and
oppressive treatment which he gave petitioner. The dissenting NLRC Commissioner aptly observed thus: Moreover, it should be emphasized that no
strained relations should arise from a valid and legal act of asserting one’s
right, such as in the instant case, for otherwise, an employee who still
asserts his/her separation pay on the pretext that his/her relationship with
his/her employer and already become strained relations in order that it may justify the award of separation pay
in lieu of reinstatement with backwages should be such that they are so
compelling, and so serious. xxx.”
(pp. 164-165, Rollo)

As above-stated, private respondent was illegally terminated
because (a) the Board of Directors had no authority to terminate her and (b)
the charges or offenses imputed against her were not substantiated and that
private respondent was not guilty thereof. But she was not reinstated because of animosity giving rise to a
strained relationship between Rolando Romero (the Board President) and the
former. However, during the pendency of
the motion for reconsideration before the NLRC, Rolando Romero died. Hence, the NLRC realizing that the obstacle
to reinstate private respondent to her former position is already removed,
modified its decision and ordered her reinstatement. This ruling is conformable to the aforecited case of Sibal v.
Notre Dame of Greater Manila (supra). We therefore sustain the same. Besides, we rule that private respondent’s termination can only be made
by the General Assembly and not by the Board of Directors. To pay her separation pay instead of
reinstatement would in effect validate her termination which was not authorized
and illegal. If petitioner believes
that private respondet’s continued stay would be most detrimental to the
cooperative, let them present the matter to the General Assembly, in accordance
with petitioner’s constitution and by-laws.

WHEREFORE, for lack of merit, the petition is
DISMISSED. The assailed Decision and
Resolution of the respondent NLRC are AFFIRMED.

Costs against petitioner.

SO ORDERED.

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