SAN MIGUEL CORPORATION, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND ALFREDO ANGAT, RESPONDENTS.

In this petition for certiorari, petitioner San Miguel Corporation
(SMC) seeks the reversal of the resolution dated November 22, 1990^[1]
of the National Labor Relations Commission (NLRC) affirming the decision dated
January 31, 1990 of Labor Arbiter Oswald B. Lorenzo which declared the
dismissal of private respondent Alfredo Angat illegal and ordered his immediate
reinstatement without loss of seniority rights and the payment of full back
wages and attorney’s fees, on the ground that said resolution was issued with
grave abuse of discretion.

The facts are as follows: SMC hired private respondent Angat as driver on August 16, 1972 and
assigned him to Beer Sales Route No. 7 of the San Fernando, Pampanga Beer Sales
Office. One of his companions on said
route was Monico Pamintuan, who was later assigned as acting salesman in the
absence of the regular route saleman, Generoso Canlas.

On September 6, 1986, Pamintuan went to collect from SMC’s
customers but failed to return after several hours. Angat then reported Pamintuan’s disappearance to Federico Quizon,
Officer-in-Charge of SMC’s San Fernando Plant, Beer Sales Division and
requested for an audit of the balance of the beer in the truck. Angat also turned over to Quizon the amount
of P4,747.00, which the latter acknowledged to be the correct amount based on
the audit.

A few days later, Angat was accompanied in his sales route by two
SMC management personnel, who conferred with three SMC customers. The management personnel discovered that the
salesmen of Beer Route No. 7, in connivance with some of SMC’s customers, have
been issuing Temporary Credit Sales Invoices which do not reflect the actual
merchandize received by said customers.

Under this scheme, the salesmen from Beer Sales Route No. 7 would
allegedly borrow SMC merchandise from its customers and hide the same by
imputing said merchandise to be the actual orders of customers involved. There was an understanding between the
parties that the salesmen shall either return the merchandise borrowed to the
customer or pay its monetary equivalent.

Thereafter, Angat and the management personnel proceeded to SMC’s
Head Office, where the former was told that he was grounded effective September
9, 1986 — which in Angat’s case meant that he could not go out on his sales
route. Angat was ordered to report for
work at SMC’s Head Office.

Angat was then charged with misappropriating company
funds, which he denied, saying that as a mere route driver he handled
neither company funds nor sales transactions. However, during an investigation conducted by SMC on September 20, 1986
and February 24, 1987, Angat allegedly admitted to having borrowed merchandize
from SMC’s customers.

On August 26, 1987, Angat discovered that his name was included
in a list of persons prohibited from entering company premises posted on the
SMC Bulletin Board.

Consequently, on August 1, 1988, Angat filed a complaint for
illegal dismissal against SMC with the NLRC’s Regional Arbitration Branch No.
III at San Fernando, Pampanga. In its
position paper, SMC claimed that Angat was dismissed for cause, the same being
grounded on Angat’s borrowing of merchandize from SMC’s customers, which
constitutes serious misconduct and fraud under the Labor Code.

In the course of the proceedings, Angat presented the affidavit
of Monico Pamintuan admitting that it was he who conspired with SMC’s customers
in “making it appear that the latter are liable on the Temporary Credit Sales
Invoices with the understanding that the quantity imputed less actual liability
shall be returned to the customer or its monetary equivalent to be paid
thereafter.”^[2]
Pamintuan also stated that Angat has nothing to do nor was aware of the alleged
irregularities of the sales personnel of Beer Route No. 7. Pamintuan later testified before the labor
arbiter and affirmed the contents of his affidavit.

On January 31, 1990, Labor Arbiter Oswaldo B. Lorenzo rendered a
decision^[3]
in favor of Angat, the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing considerations, judgment is
hereby rendered as follows:

1.       Declaring the dismissal
of complainant ALFREDO ANGAT by respondent
as illegally effected;

2.       Ordering the
respondents to immediately reinstate complainant ALFREDO ANGAT to his previous
position or equivalent position without loss of seniority rights and to pay him
full backwages and other benefits without deduction or qualification from 25
August 1987 up to actual reinstatement but not to exceed three (3) years in the
amount of NINETY THOUSAND NINE HUNDRED NINETY NINE PESOS and 95/100
(P90,999.95) and which is partially computed as of the date of the decision, as
follows:

a.  Basic Salary:

P2,800.00 x 29 months           =          P31,200.00

b.  13th month pay:

Fr. 1987-1989 = 3 years

P2,800.00 x 3 years          =          8,400.00

c.  5-day incentive leave

Fr. 1987-1989 = 3
years

P466.65 x 3 years             =          1,399.95

GRAND TOTAL                =          P90,999.95

3.       The respondents are
hereby ordered to pay the equivalent of ten (10) percent of the amount herein
or the amount of NINE THOUSAND ONE HUNDRED PESOS (P9,100.00) for and as
attorney’s fees.

4.       The claim for damages
against respondents is hereby ordered dismissed for lack of evidentiary basis
to grant the same.

5.       Finally, respondents
are ordered to show proof of compliance within five days from receipt of this
Decision in connection with the immediate reinstatement of the complainant,
under the same terms and conditions prevailing prior to his dismissal or at
their option mere reinstatement in the payroll pursuant to par. 3 of Art. 223
of the Labor Code, as amended by Rep. Act 6715.

SO ORDERED.^[4]

The Labor Arbiter found a violation of due process when in the
course of the investigation, petitioner failed to appraise private respondent
of his constitutional right to counsel and to remain silent and thereby not
affording the latter a fair defense. He
likewise considered the testimony of Monico Pamintuan as having absolved
private respondent from any liability to petitioner SMC.

Not satisfied with the decision, petitioner appealed the same to
the NLRC, which affirmed the decision of the Labor Arbiter in toto in a resolution dated November 22, 1990,^[5] and
dismissed the appeal for lack of merit.

In the instant petition, SMC argues that it accorded private
respondent due process and that it found nothing in the Labor Code requiring
employers to inform employees under investigation of their constitutional right
to remain silent and to counsel; that private respondent cannot be absolved of
liability on the basis of another person’s confession of guilt; and that
petitioner has the prerogative to prescribe reasonable rules and regulations
necessary for the conduct of its business.

We find the petition devoid of merit.

To validly dismiss an employee, an employer must meet two
conditions: first, the dismissal must
be for a cause provided for in the Labor Code; and second, the observance of notice
and hearing prior to the employee’s dismissal.

The importance of notice and hearing was stressed in Salaw
vs. National Labor Relations Commission, et al.,^[6] wherein
this Court stated:

The inviolability of notice and hearing for a valid dismissal of an
employee can not be over-emphasized. Those twin requirements constitute essential elements of due process in
cases of employee dismissal. The
requirement of notice is intended to inform the employee concerned of the
employer’s intent to dismiss him and the reason for the proposed dismissal; on
the other hand, the requirement of hearing affords the employee the opportunity
to answer his employer’s charges against him and accordingly to defend himself
therefrom before dismissal is effected. Neither one of these two requirements can be dispensed without running
afoul of the due process requirement of the Constitution.^[7]

The investigation conducted by petitioner in this case cannot be
considered a hearing within the contemplation of the law since it did not accord
private respondent the opportunity to present his defense or to adduce evidence
in his behalf. As can be seen from the
minutes of the investigation, which petitioner presented in evidence before the
labor arbiter as Exhibit “C”,^[8] the
investigation was intended as a fact-finding proceeding aimed at establishing
the guilt of respondent Angat and the other members of Beer Sales Route No.
7. Nowhere does it appear that private
respondent was appraised of the charges against him, nor was he given an opportunity
to defend himself.

While it is true that We have held in several cases, the most
recent of which being Cathedral School of Technology, et al.
vs. National Labor Relations Commission, et al.,^[9] that the
mere absence of notice and hearing does not mean the automatic reinstatement of
the dismissed employee where the employee was dismissed for lawful cause, the
fact remains that there appears to be no valid ground for private respondent’s
dismissal, either for misappropriating company funds or for borrowing
merchandise from its customers.

The record is bereft of any evidence of wrong-­doing on
respondent Angat’s part. It is not true
that private respondent had admitted borrowing merchandize from SMC’s customers;
what he did admit was the fact of borrowing money from route salesman
Pamintuan, who apparently took the money he lent to private respondent from the
proceeds of his sales, as shown by Angat’s
statement taken before SMC investigators:

“T –  Sa inaming mong
pagkautang sa ibang parukyano, paano ka nakahiram at alam ba ng iyong ahente
ito?

“S – Basta humiram ako ng pera kay Monico Pamintuan pero hindi alam na
ganyan ang ginawa niya. Paguwi
namin binibigay and peraat sabay pangalo ko na a beite o sa komisyon ang bayad
ko.”^[10]

Like the public respondents, this Court cannot ignore the
testimony of Pamintuan admitting his guilt and absolving private respondent
from his misdeeds. As acting route
salesman, Pamintuan was the only one authorized to deal with SMC’s customers
and to hold whatever moneys he collected from them.

In fine, We hold that the NLRC committed no grave abuse of
discretion in upholding the decision of the labor arbiter in declaring the
dismissal of private respondent Angat illegal and ordering his immediate
reinstatement without loss of seniority rights and payment of full back wages
and attorney’s fees.

WHEREFORE, the instant petition is hereby DISMISSED. Costs against petitioner.

SO ORDERED.

Narvasa, C.J., (Chairman) and
Regalado, JJ., concur.

Padilla, J., no part.

^[1]
Penned by Commissioner Rogelio
I. Rayala, with Presiding Commissioner Lourdes C. Javier and Commissioner
Ireneo B. Bernardo, concurring.

^[2]
Exhibit “A”, Records, p. 141.

^[3]
Rollo, pp. 29-42.

^[4]
Decision in NLRC Case No. RABIII-08-0551-88, pp. 13-14, rollo, pp. 41-42.

^[5]
Rollo, pp.
19-28.

^[6]
202 SCRA 7 (1991).

^[7]
Id., 12.

^[8]
Records, p. 75.

^[9]
G.R. No. 101438, October 13, 1992.

^[10]
See Exhibit “C”, Records, pp. 75-76. Emphasis supplied.