QUEZON ELECTRIC COOPERATIVE, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, MAYNARDO TANADA, RENATO BACUBE, FLAVIANO O. AGUBANG, PETRONIO R. POBEDA, AND RAMON A. PAREJA, R…

Private respondents were employees of petitioner Quezon Electric Cooperative, holding the following
positions:

Maynardo Tanada   –   Disconnecting
Officer

Renato Bacube       –   Lineman

Flaviano Agubang   –   Groundman

Petronio Pobeda     –   Housewiring Estimator/ Inspector

Ramon Pareja         –   Bill Collector

In 1984, petitioner undertook the tracking down of pilferages of
electricity.  Among those investigated
were its own employees.  Fourteen (14)
employees, including private respondents herein, were found to have tampered
meters and illegal connections in their houses resulting in the pilferage of
electricity.  Of said fourteen (14)
employees, nine (9) agreed to resign and thereafter claimed the benefits, due
them.  The five (5) private respondents
did not, and were subsequently dismissed. 
Consequently, private respondents filed separate cases for illegal
dismissal and non-payment or underpayment benefits against petitioner.

In support of private respondents’ dismissal, petitioner
presented the following evidence:

MAYNARDO TANADA

Of the service wires (neutral and live), only the neutral wire
could be pulled out from the built-in pipe in concrete, hence it is suspected
there is an illegal tapping to the wire inside the conduit pipe installed in
time of concreting leading to load side without passing through the meter.  (Memorandum from Meter Calibration/
Replacement Crew, Annexes 5 & 5-A, Position Paper of the Petitioner).  This is confirmed by the great disparity
between estimated monthly KWH consumption of 127.8 per load survey and the
actual registered consumption ranging from 32 to 45 KWH per month.  (Annexes 6 & 7, Id.)

RENATO BACUBE

There was a trace that his house was jumpered
because duplex wire was peeled off and a splice was left.  (Annexes 5 & 5-A, Id.).  He was also found using a different meter
from the one issued for this house. 
(Memorandum from Chief Technical Services Section, Annex 10, Id.).  The estimated monthly KWH consumption was 52
KW, while the registered consumption is 25 KWH per month.  (Annexes 8 & 9, Id.).

FLAVIANO AGUBANG

Appliances that require large amount of electricity were directly
tapped to the service drop.  Thus,
consumption does not register in the meter. 
(Annex 10. Id.).

PETRONIO R. POBEDA

His KWH meter was positioned upside down in such a way that the
meter disc could hardly move, causing minimal registration of electricity
consumed.  (Annex 1-C, Id.).

RAMON A. PAREJA

Service drop was peeled off (Annex 1-D, Id.)
where it could be reached easily by hand from a hole in the wall of his house.

[Rollo, pp. 12-13; 63-64.]

The Labor Arbiter, while finding that there was basis to suspect
private respondents of pilferage, nevertheless found that private respondents
had been illegally dismissed and ordered their reinstatement with backwages, as the evidence proved insufficient to warrant
their dismissal.  The claims for unpaid
or underpaid benefits were dismissed.

On appeal, public respondent National Labor Relations Commission
dismissed petitioner’s appeal and affirmed the decision of the Labor
Arbiter.  Petitioner’s motion for
reconsideration was subsequently denied. 
Hence, the instant petition.

In its petition, Quezon Electric
Cooperative assails the finding of the Labor Arbiter, affirmed by the NLRC,
that the evidence against private respondents was insufficient to warrant their
dismissal, end thus ascribes to the NLRC grave abuse of discretion amounting to
lack or excess of jurisdiction for sustaining the Labor Arbiter’s decision to
order their reinstatement with backwages.

In his comment, the Solicitor General expressed his agreement
with the petitioner and recommended “that the petition be given due course
and that the decision of the Labor Arbiter as affirmed by respondent NLRC be
reversed and set aside and the dismissal of private respondents be
ordered.” [Rollo, p. 70.] He was of the view
that there was sufficient basis to justify private respondents’ dismissal.

The parties filed their respective memoranda and, in view of the
Solicitor General’s position, the NLRC was required to designate another lawyer
to file its memorandum [Rollo, p. 101.] After the
NLRC complied and filed its memorandum, the case was deemed submitted for
decision.

After considering the facts as found by the Labor Arbiter and
adopted by the NLRC, the arguments of the parties, the law and the
jurisprudence on the matter, the Court finds that petitioner has failed to show
that the NLRC gravely abused its discretion, amounting to lack or excess of
jurisdiction, when it affirmed the decision of the Labor Arbiter.

Both petitioner and the Solicitor General argue that private
respondents may be legally dismissed on the ground of loss of confidence.  In support thereof, they cite the leading cases
of Galsim v. Philippine National
Bank [G.R. No. L-23921, August
29, 1969, 29 SCRA 293] and Reyes v. Zamora [G.R. No. L-46732, May 5, 1979, 90 SCRA 92].

In Reyes, supra, the Court stated:

Loss of confidence is a valid ground for dismissing an employee, and
proof beyond reasonable doubt of the employee’s misconduct – apparently
demanded by the Minister of Labor – is not required to dismiss him on this
charge.  It is sufficient if there is
“some basis” for such loss of confidence; or if the employer has reasonable
grounds to believe, if not 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.  [at
p.111.]

The Court finds petitioner’s and the Solicitor General’s reliance
on the above-quoted rule misplaced.  The
facts of the instant case negate the application of the doctrine cited.

The basic premise for dismissal on the ground of loss of
confidence is that the employee
concerned holds a position of trust and confidence.  It is the breach of this trust that results
in the employer’s loss of confidence in the employee.  Thus, in Galsim,
supra, the employee dismissed was a
paying teller, while in Reyes, supra, the employee was the
company’s credit and collection manager. 
In both cases, the loss or misappropriation of money under their custody
or control was involved.  Similarly, in Nevans v. Court of Industrial
Relations [G.R. No. L-21510, June 29, 1968, 23 SCRA 1321], another case
cited by the Solicitor General, the employee dismissed on the ground of loss of
confidence was the head checker
of the company and the loss involved merchandise under his management and
supervision.

Under the Labor Code, as amended, loss of confidence would be the
result of “fraud or willful breach by the employee of the trust reposed on
him by his employer or duly authorized representative,” a just cause for
termination under Article 282.  It cannot
be gainsaid that the breach of trust must be related to the performance of the
employee’s functions.

In the instant case, private respondents held no position
involving trust and confidence, with the possible exception of Ramon Pareja who was a bill collector.  But even then, Pareja
was not being charged with the loss of money he had collected.* Respondents were actually being accused by
petitioner with the pilferage of electricity as consumers of the
electric power it provided.  This is
clear from the report of petitioner’s investigators who found the pilferage to
have been effected through the electric wires leading
to private respondents’ residences and the meters attached thereto.  Essentially, private respondents were
dismissed for their non-payment of the electricity they allegedly consumed or,
more graphically, for cheating on their electric bill.  That the pilferage could have been effected even
if private respondents were not employees
of petitioner but were ordinary consumers is undisputed.  Thus, while the pilferage could have been
facilitated by their employment with petitioner, in that the knowledge
necessary to effect the alleged meter tampering and illegal connections could
have been acquired in their employment, such did not necessarily make the alleged
offense work-related.

Petitioner and the Solicitor General, however, point to a company
policy (Policy No. 35) which makes pilferage by employees punishable with
dismissal, to wit:

Coop employee-consumers found knowingly using tampered meters at
his own residence, rented apartment or houses and using other devises in the
pilferage of electricity should be punished by dismissal from the service
[Comment, p. 4; Rollo, p. 64.]

However, the Court finds that even under
this company policy, the dismissal of private respondents cannot be
sustained.  As found by the Labor
Arbiter, whose decision was affirmed by the public respondent:

*        *           *

. . . [R]espondent (petitioner herein)
has still to prove by clear and convincing evidence that the complainants
(private respondents herein) were knowingly using the tampered meters or using
other devices to pilfer electricity. 
This is the import of the company’s policy.  In the case at bar,
there is no evidence to show that
complainants have been knowingly using the
alleged devices
to pilfer electricity. 
There is no evidence that the complainants
were the ones who installed, made or
caused the connection of the devices used
in pilfering electricity. . . .

*        *           *

[Rollo, p. 29;
Underscoring supplied.]

The insufficiency of the evidence relied upon by petitioner is
particularly apparent with regard to private respondents Tanada
and Bacube.  As
found by the Labor Arbiter, the sole basis of petitioner in concluding that they have pilfered
electricity was the disparity between their estimated monthly consumption and
their actual consumption but petitioner had failed to show that the disparity
could have resulted only if they had pilfered electricity [Rollo.
p. 28.] On the other hand, in the case of Flaviano Agubang, there is even evidence to show that the alleged
illegal connection was done by a lessee of the lower floor of his house (“silong“)
without his knowledge or consent [Ibid.,
pp. 23-24.] Then, that Petronio Pobeda caused the
installation of the defective meter in his residence is not conclusive, as he
had allegedly just recently transferred thereto [Ibid., p.
25.] Finally, in Ramon Pareja’s case, while it was
suspected that he used a “jumper” since the service drop connection
leading to his house was peeled off, no such illegal contraption was actually found [Ibid. p. 26.] In sum, the
evidence in support of petitioner’s position that private respondents knowingly
used tampered meters or devices to effect the pilferage of electric power is
inconclusive.

It is a basic principle in the dismissal of employees that the
burden of proof rests upon the employer to show that the dismissal of the
employee is for a just cause,
and failure to do so would necessarily mean that the dismissal is not justified
[Polymedic General Hospital v. NLRC, G.R. No. 64190,
January 31, 1985, 134 SCRA 420; Asphalt and Cement Pavers, Inc. v. Leogardo, et al., G.R. No. 74563, June 20, 1988.] Should
the employer fail in discharging this duty, the dismissal of the employee
cannot be sustained.  This is consonant
with the constitutional guarantee of security of tenure, as implemented in what
is now Sec. 279 of the Labor Code, as amended.

In the instant case, public respondent NLRC and the Labor Arbiter
have both found that petitioner had failed to prove a just cause for the
dismissal of private respondents.  After
a careful consideration of the pleadings filed and the arguments raised by the
parties and the Solicitor General, the Court finds no cogent reason to disturb
this finding.  As the Court had
emphasized in Dangan v. NLRC [G.R. Nos.
63127-28, February 20, 1984,
127 SCRA 706]:

It is perhaps timely to reiterate well-settled principles involving
decisions of administrative agencies. 
Findings of quasi-judicial agencies which have acquired expertise
because their jurisdiction is confined to specific matters are generally
accorded not only respect but at times even finality if such findings are
supported by substantial evidence. 
(Special Events and Central Shipping Office Workers Union v. San Miguel Corporation, 122 SCRA
557 citing International Hardwood and Veneer Co. of the Philippines v. Hon.
Vicente Leogardo, et al., 117 SCRA 967; Genconsu Free Workers Union v. Inciong,
91 SCRA 311; Dy Keh Beng v. International Labor and Marine Union of the Phil.,
90 SCRA 162).  And in a catena of cases,
this Court has held that the findings of facts of the National Labor Relations
Commission are binding on the Court (Philippine Labor Alliance Council [PLAC]
v. Bureau of Labor Relations, 75 SCRA 162; Pan-Phil. Life Insurance Co. v. NLRC, 114 SCRA 866; Pepsi-Cola Labor
Union-BFLU-TUPAS Local Chapter No. 896 v. NLRC. 114 SCRA 960) if supported by
substantial evidence (Reyes v. Philippine Duplicators, Inc., 109 SCRA 438). [at
pp.711-712.]

Ordinarily, an employee
who is illegally terminated would be entitled to reinstatement to his former
position with backwages.  However, the Court is of the view that the
circumstances of the instant case would render the reinstatement of private
respondents inappropriate.  Thus, in the
recent case of Citytrust Finance
Corporation v. NLRC [G.R. No. 75740, January 15, 1988, 157 SCRA 87],
where the employer similarly failed to establish sufficient basis for the
dismissal of the employee on the ground of lack of confidence, the Court
awarded separation pay equivalent to one (1) month pay for every year of
service instead of ordering reinstatement “so that he (the employee) can
be spared the agony of having to work anew with petitioner (the employer) under
an atmosphere of antipathy and antagonism and the petitioner does not
have to endure the continued services of private respondent in whom it has lost
confidence.” [at p. 95.]

WHEREFORE, the instant petitions hereby DISMISSED.  The Resolution of the NLRC dismissing the
appeal from the Labor Arbiter’s decision is AFFIRMED, with the
modification a) that private respondents shall be paid
separation pay equivalent to one (1) month pay for every year of service in
lieu of reinstatement and (b) that, in accordance with the Court’s
pronouncements, the award of backwages shall be limited to three (3) years, without
qualification or deduction.  This
decision shall be IMMEDIATELY EXECUTORY.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., and Bidin, JJ., concur.

Feliciano, J., on leave.

* See Piedad
v. Lanao del Norte
Electric Cooperative, Inc. [G.R. No. 73735, August
31, 1987, 153 SCRA 500] where the Court held that a bill collector of an
electric cooperative who repeatedly incurred unexplained shortages in his
collections could be dismissed on the ground of loss of confidence, the
position of bill collector being one of trust and confidence.