Case Digest: Rubia v. NLRC, et al.

G.R. No. 178621 : July 26, 2010




Petitioner served as member of the Board of Community Water and Sanitation Cooperative (COWASSCO), a cooperative primarily engaged in water and sanitation service for the municipalityof Argao in Cebu , before he was appointed its General Manager in 1 October 1994.

On 28 August 2000, COWASSCO, through its Chairman of the Board, issued Memorandum No. 001-2000 charging petitioner with mismanagement of operation relating to the non-monitoring and non-compliance on the application of the correct dosage of chlorine to the water system and requesting an explanation from him.

Petitioner submitted his letter-explanation and claimed that he complied with all the recommendations of theSangguniang Bayan .He shifted the blame to the Chlorinator and the Master Plumber who were directly responsible over the chlorination.He likewise asserted that the Board of Directors was equally culpable and accountable to the lapses committed by the Chlorinator and Master Plumber.

On 18 September 2000, the Board adopted Resolution No. 9 terminating the services of petitioner for loss of trust and confidence.

On 4 April 2002, petitioner filed a complaint for illegal dismissal and prayed for reinstatement, payment of backwages, moral and exemplary damages and attorneys fees.

The labor arbiter found petitioners dismissal as illegal. Aggrieved, respondents appealed to the NLRC.In a Decision dated 25 June 2004, the NLRC reversed and set aside the labor arbiters decision.It upheld petitioners dismissal as valid on the ground of loss of trust and confidence.

Petitioner filed a petition for certiorari before the Court of Appeals.Finding no grave abuse of discretion on the part of the NLRC, the Court of Appeals dismissed the petition on 21 November 2006.Petitioner filed amotion for reconsiderationof the Court of Appeals decision.Its denial prompted petitioner to elevate the case to this Court via petition for review on certiorari .
[1] Whether petitioner was validly dismissed on the ground of loss of trust and confidence; and, 
[2] Whether the due process requirement for termination was observed.


The issues raised by petitioner are evidently factual in nature.By giving due course to his petition, this Court is not departing from the well-settled rule that questions of facts are not reviewable. The discordant findings between the Labor Arbiter and the NLRC however open the door for review.

For there to be a valid dismissal based on loss of trust and confidence, the employee concerned must be holding a position of trust and confidence and there must be an act that would justify the loss of trust and confidence.

Petitioner held the position of General Manager of COWASSCO prior to his termination.As General Manager, he was tasked the general operation of the cooperative. Undoubtedly, petitioner held a position of trust and confidence.As correctly pointed out by the Court of Appeals, the nature of petitioners work as manager requires a substantial amount of trust and confidence reposed on him by his employer.He occupies a highly sensitive and critical position which involves a high degree of responsibility.

Having established that petitioner is a managerial employee, we shall proceed to determine whether the guidelines for the application of loss of trust and confidence as a just cause for dismissal of an employee from the service were complied with, i.e., 1) loss of confidence should not be simulated; 2) it should not be used as subterfuge for causes which are improper, illegal or unjustified; 3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and 4) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.

The notice of termination stated that petitioner was terminated for loss of confidence premised on his alleged mismanagement resulting in the contamination of the water system in the municipalityof Argao , Cebu .Records reveal that based on the laboratory tests conducted, the water provided by COWASSCO was contaminated.It appears that there were indeed previous incidents relating to the water supply which petitioner failed to act upon.In 28 September 1998, there was no water supply.In 1999, there was an outbreak of typhoid fever, which was traceable to the water supply of COWASSCO.And finally, the Sangguniang Bayan summoned petitioner to explain the finding that the water supplied by COWASSCO is positive of coliform organisms.Despite numerous invitations on petitioner to appear before the Sangguniang Bayan to explain these lapses, petitioner failed to do so.

As the general manager, petitioner is tasked to perform key functions such as the monitoring of COWASSCOs day-to-day operation.Therefore, any lapse brought to the companys attention must be directly addressed by the manager.The NLRC aptly observed:

x x x That complainant holds a very sensitive position cannot be over-emphasized.As General Manager, he is tasked with the duty of delivering safe, clean and potable water to the consumers.In his hands therefore lies the health and even lives of the people of the Municipalityof Argao .Even the slightest case of water contamination, (in this case, the presence of coliform organisms) if not treated immediately could result in an epidemic of epic proportions thus putting at risk the lives of thousands of innocent consumers.He cannot simply ignore the case with the wry remark Wa pa man kahay namatay (Nobody has died yet).He cannot also exculpate himself by saying that he already implemented the recommendations of the SB and the Board of Directors, nor can he wash his hands by saying that it was the fault of the Chlorinator/Reservoir Tender and Master Plumber.As earlier pointed out, the job of General Manager of a water service cooperative calls for a hands-on leader not a swivel chair executive who contents himself with issuing memos and office orders.He has to make himself visible in the field to keep the men working under him on their toes guarding against seepage of contaminated water.This is the kind of General Manager that respondents want, not the herein complainant who was quick to pass the buck to the Board of Directors under the principle of command responsibility.

For breach of trust to constitute a valid cause for dismissal, it must be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse.

Petitioner did not deny that he was remiss in his duties, particularly in monitoring the application of the correct dosage of chlorine in the water system.What he did was to shift the blame to his subordinates -- the Chlorinator and Master Plumber.During the investigation however, it appears that petitioner did not even bother to impose disciplinary action against these erring employees.As manager, petitioner should have paid close attention to the persistent problem of chlorination given the fact that theSangguniang Bayan had repeatedly called his attention on the matter.

Petitioners failure to closely monitor the contamination of water supply, his repeated failure to appear before the Sanggunaing Bayan to explain his lapses, and his overall indifference in performing the task assigned to him as general manager clearly demonstrate a willful breach of trust.


Aside from dismissal for a just cause, the other part of the two-tiered rule for a valid dismissal is the observance of due process.

Article 277(b) of the Labor Code provides:

ART. 277. Miscellaneous provisions. − x x x (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment.

In addition, Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code, requires the employer to furnish the employee with two written notices.These are:(1) a written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; and (2) a written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

The twin requirements of notice and hearing constitute the elements of due process in cases of employee's dismissal.The requirement of notice is intended to inform the employee concerned of the employer's intent to dismiss and the reason for the proposed dismissal. Upon the other hand the requirement of hearing affords the employee an opportunity to answer his employer's charges against him and accordingly to defend himself therefrom before dismissal is effected. On these essentials of due process, we modify the findings of the Court of Appeals.

The Court of Appeals observed that petitioner was not afforded a hearing or conference before the termination was effected. This is however belied by the evidence presented by respondents. Petitioner was in fact given the opportunity to defend himself in an investigation conducted by the Board of Directors on 12 September 2000. In the presence of the Board of Directors, petitioner insisted that he and the Board of Directors are equally culpable. Petitioner however failed to squarely address the issue of his mismanagement.

Petitioner also harps on the inclusion of several other incidents in the notice of termination which were not mentioned in the show cause notice. The simple fact that petitioner failed to closely monitor the application of chlorine, resulting in the contamination of the water system in Argao, Cebu, is a sufficient and valid ground for respondents to lose their trust and confidence on the management skills of petitioner.The invocation of an additional ground in the resolution terminating the services of petitioner, i.e., the failure to implement a Board Resolution providing for a Code of Ethical Standard to employees of COWASSCO, does not by itself constitute denial of due process. Petitioner was informed in the first memorandum regarding the incorrect application of chlorine, which was the more important ground by which his dismissal was premised.Petitioner did not make a categorical denial of this allegation against him.Instead of assuming responsibility over the lapses he committed, petitioner resorted to finger pointing, blaming the Master Plumber and Chlorinator for the incorrect dosage of chlorine.In the second notice, the issue of incorrect chlorination was also discussed in detail.The Board of Directors cited instances showing that petitioner had not properly safeguarded the well-being of the water consumers. Hence, it cannot be concluded that there was denial of due process.

The essence of due process is simply an opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law. As long as petitioner was given an opportunity to explain his side, the requirements of due process have been substantially complied with.