Case Digest: Duty Free v. Tria

G.R. No. 174809 : June 27, 2012




Petitioner Duty Free Philippines Services, Inc. is a manpower agency that provides personnel to Duty Free Philippines(DFP). On March 16, 1989, respondent Manolo Tria was employed by Petitioner and was seconded to DFP as a Warehouse Supervisor.

In anAudit Report, dated January 16, 1998, it was revealed that 1,020 packs of Marlboro bearing Merchandise Code No. 020101 under WRR No. 36-04032 were not included in the condemnation proceedings held on December 27, 1996 and that there were glaring discrepancies in the related documents which indicate a malicious attempt to conceal an anomalous irregularity.The relevant Request for Condemnation was found to have been fabricated and all signatories therein, namely, Ed Garcia, Stockkeeper; Catherino A. Bero, DIU Supervisor; and Constantino L. Cruz, were held accountable for the irregular loss of the unaccounted Marlboro KS Pack of 5

After further investigation, it was discovered that the subject merchandise was illegally brought out of the warehouse and it was made to appear that in all the documents prepared said goods were legally condemned on December 27, 1996. Ed Garcia, one of the respondents in the Audit Review, implicated [respondent] and [two] others. Garcia claimed that he was unaware of the illegality of the transaction as he was only obeying the orders of his superiors who included [respondent]. Garcia disclosed that it was respondent who ordered him to look for a van for the supposed direct condemnation of the subject merchandise.

Consequently, the Discipline Committee requested respondent to submit a written reply/explanation regarding the findings in the Audit Report and the allegations of Garcia. Unsatisfied with his denial, the DFP Discipline Committee [DFPDC] issued a Joint Resolution holding respondent GUILTY OF DISHONESTY for (his) direct participation in the fake condemnation and pilferage of the missing 1,020 Marlboro Pack of 5s cigarettes and orders his DISMISSAL from the service for cause and for loss of trust and confidence, with forfeiture of all rights and privileges due them from the company, except earned salaries and leave credits.

On September 18, 1998, Petitioner sent respondent a memorandum terminating his employment with Petitioner and his secondment to DFP on the basis of the findings and recommendation of the (DFPs) Discipline Committee.

Aggrieved, respondent filed a Complaint against Petitioner for Illegal Dismissal and for payment of backwages, attorneys fees and damages.

On May 31, 1999, the Labor Arbiter (LA) rendered a Decision finding respondent to have been illegally dismissed from employment. On appeal, the NLRC affirmed the LA decision, but deleted the award of attorneys fees. Petitioners motion for reconsideration was also denied.

When petitioner elevated the case to the CA, it denied for the first time the existence of employer-employee relationship and pointed to DFP as respondents real employer. The appellate court, however, considered said defense barred by estoppel for its failure to raise the defense before the LA and the NLRC.It nonetheless ruled that although DFPDC conducted the investigation, petitioners dismissal letter effected respondents termination from employment.On the validity of respondents dismissal from employment, the CA respected the LA and NLRC findings and reached the same conclusion that respondent was indeed illegally dismissed from employment.Petitioners motion for reconsideration was likewise denied in a Resolution.

ISSUE: Whether the CA erred in not considering petitioners argument that it is not the employer of respondent.
HELD: We cannot sustain petitioner's contention.


The review of labor cases is confined to questions of jurisdiction or grave abuse of discretion.The alleged absence of employer-employee relationship cannot be raised for the first time on appeal. The resolution of this issue requires the admission and calibration of evidence and the LA and the NLRC did not pass upon it in their decisions. We cannot permit petitioner to change its theory on appeal. It would be unfair to the adverse party who would have no more opportunity to present further evidence, material to the new theory, which it could have done had it been aware earlier of the new theory before the LA and the NLRC. More so in this case as the supposed employer of respondent which is DFP was not and is not a party to the present case.

In this case, petitioner insisted that respondent was dismissed from employment for cause and after the observance of the proper procedure for termination. Consequently, petitioner cannot now deny that respondent is its employee. While indeed, jurisdiction cannot be conferred by acts or omission of the parties, petitioners belated denial that it is the employer of respondent is obviously an afterthought, a devise to defeat the law and evade its obligations.

It is a fundamental rule of procedure that higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal. Petitioner is bound by its submissions that respondent is its employee and it should not be permitted to change its theory. Such change of theory cannot be tolerated on appeal, not due to the strict application of procedural rules, but as a matter of fairness.


As to the legality of respondents dismissal, it is well settled thatunder Rule 45 of the Rules of Court, only questions of law may be raised, the reason being that this Court is not a trier of facts, and it is not for this Court to reexamine and reevaluate the evidence on record.Findings of fact and conclusions of the Labor Arbiter as well as those of the NLRC or, for that matter, any other adjudicative body which can be considered as a trier of facts on specific matters within its field of expertise, should be considered as binding and conclusive upon the appellate courts.

We agree with the appellate court that DFPDCs conclusions are not supported by clear and convincing evidence to warrant the dismissal of respondent. In illegal dismissal cases, the employer is burdened to prove just cause for terminating the employment of its employee with clear and convincing evidence. This principle is designed to give flesh and blood to the guaranty of security of tenure granted by the Constitution to employees under the Labor Code.In this case, petitioner failed to submit clear and convincing evidence of respondents direct participation in the alleged fake condemnation proceedings. To be sure, unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution.