Case Digest: Baron v. NLRC

G.R. No. 182299 : February 22, 2010




Respondent Magic Sales, Inc. (MSI) is a domestic corporation engaged in the business of trading consumer goods such as soap, biscuits, candy, coffee, and juice drinks, among other things, while respondent Jose Y. Sy is the company's President and General Manager. On the other hand, petitioners claim to be employees of MSI.

It appears that on January 18, 2000, Sy ordered an inventory of the company's stock after noticing a steady increase in the company's payables and a decline in its investments. Mr. Jovencio A. Daroya, a Certified Public Accountant and the Corporate Finance Manager of MSI, was tasked to conduct a thorough audit of the company's business. Sy then informed petitioner Wilfredo Baron that he had to be temporarily relieved of some of his duties as Operations Manager to allow the audit process to take its course for reconciliation of documents.

Petitioners, however, refused to cooperate in the audit process, and thereafter, refrained from reporting for work. Nonetheless, the audit was completed, and an Internal Audit Report was submitted.

According to the audit team, there were several irregularities in the operations of MSI. The team was also convinced that Baron abused his authority and took advantage of the laxity of the system he designed. It likewise believed that Barons subordinates were not honest enough to report the anomalies to the management; otherwise, the irregularities could have been limited. The audit team further concluded that there was collusion between Baron and his subordinates and that they benefited from the irregularities.

Consequently, management informed petitioners of the charges against them, to wit: serious misconduct and willful disobedience to the company's lawful orders; fraud or willful breach of trust reposed by the employer; and abandonment or absence without official leave. Although petitioners were required to explain and refute the charges, they neither rebutted the same nor attended the investigation. Hence, MSI decided to terminate their services.

Petitioners filed an illegal dismissal case, 13th month pay, service incentive leave pay, moral and exemplary damages and attorney's fees with the NLRC Arbitration Branch against MSI and Sy.

Labor Arbiter Jose G. De Vera ordered respondents to reinstate petitioners Aristeo Puzon, Dominador Gemino, Bernard Mangsat, Ramil Cayago, Barry Anthony Baron, Cynthia Junatas, Marife Ballesca and Lourdes Rabago to their former positions with all the rights, privileges, and benefits appurtenant thereto, plus full back wages from the date of dismissal until finally reinstated. Respondents were further ordered to pay money claims and attorneys fees to petitioners. However, the complaints of Wilfredo Baron, Jefferson dela Rosa and Jomar dela Rosa were dismissed for lack of merit.

Separate appeals to the NLRC were filed by both parties. The NLRC rendered a Decision treating the appeal of complainants Jomar de la Rosa and Jefferson dela Rosa as withdrawn; dismissing the appeal of Wilfredo Baron for being without merit; and dismissing the complaints of Aristeo Puzon, Dominador Gemino, Bernard Mangsat, Ramil Cayago, Barry Anthony Baron, Cynthia Junatas, Marife Ballesca and Lourdes Rabago for being also without merit.

The NLRC found that petitioners anticipated that the audit would eventually lead to their dismissal and prosecution in court. Hence, they abandoned their work and filed cases at the start of the audit. The NLRC held that the acts of abandoning their jobs without prior leave and of not surrendering all the keys and documents in their possession so that management could thoroughly conduct its audit are enough reasons to justify their termination pursuant to Article 282 of the Labor Code, as amended.

Contending that the NLRC acted with grave abuse of discretion amounting to lack or in excess of jurisdiction in rendering its Decision and Order, petitioners filed a Petition for Certiorari with the CA.

The CA dismissed the petition for lack of merit. Hence, the present petition.
Were petitioners validly dismissed on the grounds of grave misconduct and loss of confidence? and 
Were petitioners denied of their right to due process when they were terminated from their employment?
HELD: The decision of the Court of Appeals is sustained.


The just causes for termination of employment are enumerated in Article 282 of the Labor Code, as amended, viz.:
ART. 282. Termination by employer. An employer may terminate an employment for any of the following 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.
In the present case, respondents terminated petitioners from their employment based on the following grounds: (1) serious misconduct and willful disobedience to the company's lawful orders; (2) fraud or willful breach of trust reposed by the employer; and (3) abandonment or absence without official leave.

Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must nevertheless be in connection with the employees work to constitute just cause for his separation. Samson v. National Labor Relations Commission, 386 Phil. 669, 682 (2000)

The basic premise for dismissal on the ground of loss of confidence is that the employees concerned hold a position of trust and confidence. It is the breach of this trust that results in the employers loss of confidence in the employee. In the instant case, we note that petitioners were holding the following positions: Wilfredo Baron - operations manager, Jomar dela Rosa and Jefferson dela Rosa - sales representatives, Cynthia Junatas and Marife Ballesca - accounting clerks, and Lourdes Rabago - warehouse checker. Clearly, petitioners were holding positions imbued with trust and confidence, which are deemed to have been reposed on them by virtue of the nature of their work.


In the dismissal of employees, it has been consistently held that the twin requirements of notice and hearing are essential elements of due process. The employer must furnish the worker with two written notices before termination of employment can be legally effected: (1) a notice apprising the employee of the particular acts or omissions for which his dismissal is sought, and (2) a subsequent notice informing the employee of the employer's decision to dismiss him. With regard to the requirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held. Paguio Transport Corporation v. NLRC, 356 Phil. 158, 170 (1998)

In this case, records show that respondents complied with the two-notice rule prescribed in Article 277(b) of the Labor Code, as amended. Petitioners were given all avenues to present their side and disprove the allegations of respondents. Thus, we agree with the Court of Appeals when it held:

On various dates, two [2] separate notices were given the employees. In the first notice, the acts imputed against them were enumerated with a call for an investigation, while the second notice contained MSIs decision terminating them after they failed to respond to the first notice. Thus, the employees inaction is attributable to them. Due process is not violated where a person is given the opportunity to be heard but chooses not to give his side of the case Caurdanetaan Piece Workers Union vs. Laguesma, 286 SCRA 401.