Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 166208 June 29, 2007
KING OF KINGS TRNSPORT INC., C!IRE DE! FUENTE "n# ME!ISS !IM, petitioners,
vs.
SNTIGO O. MMC, respondent.
D E C I S I O N
VE!SCO, JR., J.:
Is a verbal appraisal of the charges against the eplo!ee a breach of the procedural due process"
#his is the ain issue to be resolved in this plea for revie$ under Rule %& of the Septeber '(, )**%
Decision
'
of the Court of +ppeals ,C+- in C+./R SP No. 0'1('. Said 2udgent affired the
disissal of bus conductor Santiago O. Maac fro petitioner 3ing of 3ings #ransport, Inc. ,33#I-,
but ordered the bus copan! to pa! full bac4$ages for violation of the t$in.notice re5uireent and
'6th.onth pa!. 7i4e$ise assailed is the Deceber ), )**% C+ Resolution
)
re2ecting 33#I8s Motion
for Reconsideration.
#he 9acts
Petitioner 33#I is a corporation engaged in public transportation and anaged b! Claire Dela
9uente and Melissa 7i.
Respondent Maac $as hired as bus conductor of Don Mariano #ransit Corporation ,DM#C- on
+pril )1, '111. #he DM#C eplo!ees including respondent fored the Daa!an ng ga
Manggaga$a, #super at Conductor.#ransport :or4ers ;nion and registered it $ith the Departent
of 7abor and Eplo!ent. Pending the holding of a certification election in DM#C, petitioner 33#I
$as incorporated $ith the Securities and E<change Coission $hich ac5uired ne$ buses. Man!
DM#C eplo!ees $ere subse5uentl! transferred to 33#I and e<cluded fro the election.
#he 33#I eplo!ees later organi=ed the 3aisahan ng ga 3a$ani sa 3ing of 3ings ,3333- $hich
$as registered $ith DO7E. Respondent $as elected 3333 president.
Respondent $as re5uired to accoplish a >Conductor8s #rip Report> and subit it to the copan!
after each trip. +s a bac4ground, this report indicates the tic4et opening and closing for the particular
da! of dut!. +fter subission, the copan! audits the reports. Once an irregularit! is discovered, the
copan! issues an >Irregularit! Report> against the eplo!ee, indicating the nature and details of
the irregularit!. #hereafter, the concerned eplo!ee is as4ed to e<plain the incident b! a4ing a
$ritten stateent or counter.affidavit at the bac4 of the sae Irregularit! Report. +fter considering
the e<planation of the eplo!ee, the copan! then a4es a deterination of $hether to accept the
e<planation or ipose upon the eplo!ee a penalt! for coitting an infraction. #hat decision shall
be stated on said Irregularit! Report and $ill be furnished to the eplo!ee.
;pon audit of the October )0, )**' Conductor8s Report of respondent, 33#I noted an irregularit!. It
discovered that respondent declared several sold tic4ets as returned tic4ets causing 33#I to lose an
incoe of eight hundred and ninet! pesos. :hile no irregularit! report $as prepared on the October
)0, )**' incident, 33#I nevertheless as4ed respondent to e<plain the discrepanc!. In his
letter,
6
respondent said that the erroneous declaration in his October )0, )**' #rip Report $as
unintentional. ?e e<plained that during that da!8s trip, the $indshield of the bus assigned to the
$as sashed@ and the! had to cut short the trip in order to iediatel! report the atter to the
police. +s a result of the incident, he got confused in a4ing the trip report.
On Noveber )(, )**', respondent received a letter
%
terinating his eplo!ent effective
Noveber )1, )**'. #he disissal letter alleged that the October )0, )**' irregularit! $as an act of
fraud against the copan!. 33#I also cited as basis for respondent8s disissal the other offenses he
allegedl! coitted since '111.
On Deceber '', )**', respondent filed a Coplaint for illegal disissal, illegal deductions,
nonpa!ent of '6th.onth pa!, service incentive leave, and separation pa!. ?e denied coitting
an! infraction and alleged that his disissal $as intended to bust union activities. Moreover, he
claied that his disissal $as effected $ithout due process.
In its +pril 6, )**) Position Paper,
&
33#I contended that respondent $as legall! disissed after his
coission of a series of isconducts and isdeeds. It claied that respondent had violated the
trust and confidence reposed upon hi b! 33#I. +lso, it averred that it had observed due process in
disissing respondent and aintained that respondent $as not entitled to his one! clais such as
service incentive leave and '6th.onth pa! because he $as paid on coission or percentage
basis.
On Septeber '(, )**), 7abor +rbiter Raon Aalentin C. Re!es rendered 2udgent disissing
respondent8s Coplaint for lac4 of erit.
(
+ggrieved, respondent appealed to the National 7abor Relations Coission ,N7RC-. On +ugust
)1, )**6, the N7RC rendered a Decision, the dispositive portion of $hich readsB
:?ERE9ORE, the decision dated '( Septeber )**) is MODI9IED in that respondent 3ing of
3ings #ransport Inc. is hereb! ordered to indenif! coplainant in the aount of ten thousand
pesos ,P'*,***- for failure to copl! $ith due process prior to terination.
#he other findings are +99IRMED.
SO ORDERED.
C
Respondent oved for reconsideration but it $as denied through the Noveber '%, )**6
Resolution
0
of the N7RC.
#hereafter, respondent filed a Petition for Certiorari before the C+ urging the nullification of the
N7RC Decision and Resolution.
#he Ruling of the Court of +ppeals
+ffiring the N7RC, the C+ held that there $as 2ust cause for respondent8s disissal. It ruled that
respondent8s act in >declaring sold tic4ets as returned tic4ets < < < constituted fraud or acts of
dishonest! 2ustif!ing his disissal.>
1
+lso, the appellate court sustained the finding that petitioners failed to copl! $ith the re5uired
procedural due process prior to respondent8s terination. ?o$ever, follo$ing the doctrine in Serrano
v. N7RC,
'*
it odified the a$ard of PhP '*,*** as indenification b! a$arding full bac4$ages fro
the tie respondent8s eplo!ent $as terinated until finalit! of the decision.
Moreover, the C+ held that respondent is entitled to the '6th.onth pa! benefit.
?ence, $e have this petition.
T$e I%%ue%
Petitioner raises the follo$ing assignent of errors for our considerationB
:hether the ?onorable Court of +ppeals erred in a$arding in favor of the coplainantDprivate
respondent, full bac4 $ages, despite the denial of his petition for certiorari.
:hether the ?onorable Court of +ppeals erred in ruling that 33#I did not copl! $ith the
re5uireents of procedural due process before disissing the services of the coplainantDprivate
respondent.
:hether the ?onorable Court of +ppeals rendered an incorrect decision in that EsicF it a$arded in
favor of the coplaintDprivate respondent, '6th onth pa! benefits contrar! to PD 0&'.
''
#he Court8s Ruling
#he petition is partl! eritorious.
#he disposition of the first assigned error depends on $hether petitioner 33#I coplied $ith the due
process re5uireents in terinating respondent8s eplo!ent@ thus, it shall be discussed secondl!.
Non.copliance $ith the Due Process Re5uireents
Due process under the 7abor Code involves t$o aspectsB first, substantiveGGthe valid and
authori=ed causes of terination of eplo!ent under the 7abor Code@ and second, proceduralGG
the anner of disissal.
')
In the present case, the C+ affired the findings of the labor arbiter and
the N7RC that the terination of eplo!ent of respondent $as based on a >2ust cause.> #his ruling
is not at issue in this case. #he 5uestion to be deterined is $hether the procedural re5uireents
$ere coplied $ith.
+rt. )CC of the 7abor Code provides the anner of terination of eplo!ent, thusB
+rt. )CC. Miscellaneous Provisions.GG< < <
,b- Sub2ect to the constitutional right of $or4ers to securit! of tenure and their right to be protected
against disissal e<cept for a 2ust and authori=ed cause $ithout pre2udice to the re5uireent of
notice under +rticle )06 of this Code, the eplo!er shall furnish the $or4er $hose eplo!ent is
sought to be terinated a $ritten notice containing a stateent of the causes for terination and
shall afford the latter aple opportunit! to be heard and to defend hiself $ith the assistance of his
representative if he so desires in accordance $ith copan! rules and regulations proulgated
pursuant to guidelines set b! the Departent of 7abor and Eplo!ent. +n! decision ta4en b! the
eplo!er shall be $ithout pre2udice to the right of the $or4er to contest the validit! or legalit! of his
disissal b! filing a coplaint $ith the regional branch of the National 7abor Relations Coission.
#he burden of proving that the terination $as for a valid or authori=ed cause shall rest on the
eplo!er.
+ccordingl!, the ipleenting rule of the aforesaid provision statesB
SEC. ). Standards of due process@ re5uireents of notice.GGIn all cases of terination of
eplo!ent, the follo$ing standards of due process shall be substantiall! observedB
I. 9or terination of eplo!ent based on 2ust causes as defined in +rticle )0) of the CodeB
,a- + $ritten notice served on the eplo!ee specif!ing the ground or grounds for terination, and
giving said eplo!ee reasonable opportunit! $ithin $hich to e<plain his side.
,b- + hearing or conference during $hich the eplo!ee concerned, $ith the assistance of counsel if
he so desires is given opportunit! to respond to the charge, present his evidence, or rebut the
evidence presented against hi.
,c- + $ritten notice of terination served on the eplo!ee, indicating that upon due consideration of
all the circustances, grounds have been established to 2ustif! his terination.
'6
In case of terination, the foregoing notices shall be served on the eplo!ee8s last 4no$n address.
'%
#o clarif!, the follo$ing should be considered in terinating the services of eplo!eesB
,'- #he first $ritten notice to be served on the eplo!ees should contain the specific causes or
grounds for terination against the, and a directive that the eplo!ees are given the opportunit! to
subit their $ritten e<planation $ithin a reasonable period. >Reasonable opportunit!> under the
Onibus Rules eans ever! 4ind of assistance that anageent ust accord to the eplo!ees to
enable the to prepare ade5uatel! for their defense.
'&
#his should be construed as a period of at
least five ,&- calendar da!s fro receipt of the notice to give the eplo!ees an opportunit! to stud!
the accusation against the, consult a union official or la$!er, gather data and evidence, and decide
on the defenses the! $ill raise against the coplaint. Moreover, in order to enable the eplo!ees to
intelligentl! prepare their e<planation and defenses, the notice should contain a detailed narration of
the facts and circustances that $ill serve as basis for the charge against the eplo!ees. + general
description of the charge $ill not suffice. 7astl!, the notice should specificall! ention $hich
copan! rules, if an!, are violated andDor $hich aong the grounds under +rt. )0) is being charged
against the eplo!ees.
,)- +fter serving the first notice, the eplo!ers should schedule and conduct a hearing or conference
$herein the eplo!ees $ill be given the opportunit! toB ,'- e<plain and clarif! their defenses to the
charge against the@ ,)- present evidence in support of their defenses@ and ,6- rebut the evidence
presented against the b! the anageent. During the hearing or conference, the eplo!ees are
given the chance to defend theselves personall!, $ith the assistance of a representative or
counsel of their choice. Moreover, this conference or hearing could be used b! the parties as an
opportunit! to coe to an aicable settleent.
,6- +fter deterining that terination of eplo!ent is 2ustified, the eplo!ers shall serve the
eplo!ees a $ritten notice of terination indicating thatB ,'- all circustances involving the charge
against the eplo!ees have been considered@ and ,)- grounds have been established to 2ustif! the
severance of their eplo!ent.
In the instant case, 33#I adits that it had failed to provide respondent $ith a >charge
sheet.>
'(
?o$ever, it aintains that it had substantiall! coplied $ith the rules, claiing that
>respondent $ould not have issued a $ritten e<planation had he not been infored of the charges
against hi.>
'C
:e are not convinced.
9irst, respondent $as not issued a $ritten notice charging hi of coitting an infraction. #he la$ is
clear on the atter. + verbal appraisal of the charges against an eplo!ee does not copl! $ith the
first notice re5uireent. InPepsi Cola Bottling Co. v. NLRC,
'0
the Court held that consultations or
conferences are not a substitute for the actual observance of notice and hearing. +lso, in Loadstar
Shipping Co., Inc. v. Mesano,
'1
the Court, sanctioning the eplo!er for disregarding the due process
re5uireents, held that the eplo!ee8s $ritten e<planation did not e<cuse the fact that there $as a
coplete absence of the first notice.
Second, even assuing that petitioner 33#I $as able to furnish respondent an Irregularit! Report
notif!ing hi of his offense, such $ould not copl! $ith the re5uireents of the la$. :e observe
fro the irregularit! reports against respondent for his other offenses that such contained erel! a
general description of the charges against hi. #he reports did not even state a copan! rule or
polic! that the eplo!ee had allegedl! violated. 7i4e$ise, there is no ention of an! of the grounds
for terination of eplo!ent under +rt. )0) of the 7abor Code. #hus, 33#I8s >standard> charge
sheet is not sufficient notice to the eplo!ee.
#hird, no hearing $as conducted. Regardless of respondent8s $ritten e<planation, a hearing $as still
necessar! in order for hi to clarif! and present evidence in support of his defense. Moreover,
respondent ade the letter erel! to e<plain the circustances relating to the irregularit! in his
October )0, )**' Conductor8s #rip Report. ?e $as una$are that a disissal proceeding $as
alread! being effected. #hus, he $as surprised to receive the Noveber )(, )**' terination letter
indicating as grounds, not onl! his October )0, )**' infraction, but also his previous infractions.
Sanction for Non.copliance $ith Due Process Re5uireents
+s stated earlier, after a finding that petitioners failed to copl! $ith the due process re5uireents,
the C+ a$arded full bac4$ages in favor of respondent in accordance $ith the doctrine in Serrano v.
N7RC.
)*
?o$ever, the doctrine in Serrano had alread! been abandoned in +gabon v. N7RC b! ruling
that if the disissal is done $ithout due process, the eplo!er should indenif! the eplo!ee $ith
noinal daages.
)'
#hus, for non.copliance $ith the due process re5uireents in the terination of respondent8s
eplo!ent, petitioner 33#I is sanctioned to pa! respondent the aount of thirt! thousand pesos
,PhP 6*,***- as daages.
#hirteenth ,'6th-.Month Pa!
Section 6 of the Rules Ipleenting Presidential Decree No. 0&'
))
provides the e<ceptions in the
coverage of the pa!ent of the '6th.onth benefit. #he provision statesB
SEC. 6. Eplo!ers covered.GG#he Decree shall appl! to all eplo!ers e<cept toB
< < < <
e- Eplo!ers of those $ho are paid on purel! coission, boundar!, or tas4 basis, and those $ho
are paid a fi<ed aount for perforing a specific $or4, irrespective of the tie consued in the
perforance thereof, e<cept $here the $or4ers are paid on piece.rate basis in $hich case the
eplo!er shall be covered b! this issuance insofar as such $or4ers are concerned.
Petitioner 33#I aintains that respondent $as paid on purel! coission basis@ thus, the latter is
not entitled to receive the '6th.onth pa! benefit. ?o$ever, appl!ing the ruling in Philippine
+gricultural Coercial and Industrial :or4ers ;nion v. N7RC,
)6
the C+ held that respondent is
entitled to the said benefit.
It $as erroneous for the C+ to appl! the case of Philippine +gricultural Coercial and Industrial
:or4ers ;nion. Notabl! in the said case, it $as established that the drivers and conductors pra!ing
for '6th. onth pa! $ere not paid purel! on coission. Instead, the! $ere receiving a coission
in addition to a fi<ed or guaranteed $age or salar!. #hus, the Court held that bus drivers and
conductors $ho are paid a fi<ed or guaranteed iniu $age in case their coission be less than
the statutor! iniu, and coissions onl! in case $here the! are over and above the statutor!
iniu, are entitled to a '6th.onth pa! e5uivalent to one.t$elfth of their total earnings during the
calendar !ear.
On the other hand, in his Coplaint,
)%
respondent aditted that he $as paid on coission onl!.
Moreover, this fact is supported b! his pa! slips
)&
$hich indicated the var!ing aount of
coissions he $as receiving each trip. #hus, he $as e<cluded fro receiving the '6th.onth pa!
benefit.
:?ERE9ORE, the petition is P+R#7H /R+N#ED and the Septeber '(, )**% Decision of the C+ is
MODI9IED b! deleting the a$ard of bac4$ages and '6th.onth pa!. Instead, petitioner 33#I is
ordered to indenif! respondent the aount of thirt! thousand pesos ,PhP 6*,***- as noinal
daages for failure to copl! $ith the due process re5uireents in terinating the eplo!ent of
respondent.
No costs.
SO ORDERED.
PRES&ITERO J. VE!SCO, JR.
+ssociate Iustice
:E CONC;RB
!EONRDO . 'UISUM&ING
+ssociate Iustice
Chairperson
NTONIO T. CRPIO
+ssociate Iustice
CONC(IT CRPIO MOR!ES
+ssociate Iustice
DNTE O. TING
+ssociate Iustice
+ # # E S # + # I O N
I attest that the conclusions in the above Decision had been reached in consultation before the case
$as assigned to the $riter of the opinion of the Court8s Division.
!EONRDO . 'UISUM&ING
+ssociate Iustice
Chairperson
C E R # I 9 I C + # I O N
Pursuant to Section '6, +rticle AIII of the Constitution, and the Division Chairperson8s +ttestation, I
certif! that the conclusions in the above Decision had been reached in consultation before the case
$as assigned to the $riter of the opinion of the Court8s Division.
RE)NTO S. PUNO
Chief Iustice
Foo*no*e%
'
Rollo, pp. &1.C). #he Decision $as penned b! +ssociate Iustice Delilah Aidallon.Magtolis
and concurred in b! +ssociate Iustices Elie=er R. Delos Santos and +rturo D. Jrion.
)
Id. at 0%.
6
Id. at '*).
%
Id. at '**.'*'.
&
Records, pp. &0.(6.
(
Rollo, p. ''&.
C
Id. at '&'.
0
Id. at '&).
1
Id. at (C.
'*
/R No. ''C*%*, Ianuar! )C, )***, 6)6 SCR+ %%&.
''
Rollo, p. )*C@ original in capital letters.
')
+gabon v. National 7abor Relations Coission, /R No. '&0(16, Noveber 'C, )**%,
%%) SCR+ &C6, (').
'6
#he sae provision is also found in Section ),d- of Rule I of Joo4 AI of the Onibus Rules
Ipleenting the 7abor Code.
'%
Onibus Rules Ipleenting the 7abor Code, Joo4 A, Rule KKIII.
'&
Ruff! v. National 7abor Relations Coission, /R No. 0%'16, 9ebruar! '&, '11*, '0)
SCR+ 6(&, 6(1.6C*.
'(
Rollo, p. )').
'C
Id. at )'&.
'0
/R No. '*'1**, Iune )6, '11), )'* SCR+ )CC.
'1
/R No. '601&(, +ugust C, )**6, %*0 SCR+ %C0.
)*
Supra note '*
)'
Supra note '), at ('C.
))
>Re5uiring +ll Eplo!ers to Pa! #heir Eplo!ees a '6th.Month Pa! ,'6th.Month Pa!
7a$-,> ,'1C(-.
)6
/R No. '*C11%, +ugust '%, '11&, )%C SCR+ )&(.
)%
Records, pp. ).6.
)&
Id. at )0.66.