Case Digest: Samar-Med v. NLRC

G.R. No. 162385 : JULY 15, 2013




Josafat Gutang was hired by Samar-Med Distribution, and had the task of supervising the companys sales personnel and sales agents, and of representing Samar-Med in transactions with the government in Region VIII.

Gutang filed a complaint for money claims against Samar-Med in the NLRC. He claimed that Samar-Med had difficulty paying his compensation during his employment, resulting in his not being paid salaries since November 1995, allowances since June 1994, and commissions from sales and 13thmonth pay in 1996, that Samar-Med made illegal deductions in June 1994 and February 1995, that he had no knowledge of any infraction that had caused his dismissal, that he did not receive any notice informing of the cessation of Samar-Meds business operations, and that he had been compelled to look for other sources of income beginning on March 26, 1996 to survive.

Roleda/Samar-Med denied liability contending that Gutang was not an employee but an employee of the City Council of Manila.

The LA declared Gutang an employee of Samar-Med, and that he had been illegally dismissed. The NLRC dismissed the complaint of Gutang. The CA ruled that there is an employer-employee relationship between the parties, and that Gutang was illegally dismissed.

ISSUE:Whether or not Gutang was illegally dismissed?

HELD: Gutang was not illegally dismissed.


Under Article 282(c) of the Labor Code, an employer may terminate an employees employment on the ground of the latters fraud or wilful breach of the trust and confidence reposed in him. For loss of trust and confidence to constitute a sufficient ground for termination, the employer must have a reasonable ground to believe, if not to entertain the moral conviction, that the employee was 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. Those requirements were undeniably met in Gutangs case.

The finding of a just cause to dismiss Gutang notwithstanding, we also find that he was not accorded due process. Roleda as the employer had the obligation to send to him two written notices before finally dismissing him.

Article 283 of the Labor 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.

The first written notice would inform Gutang of the particular acts oromissions for which his dismissal was being sought. The second written notice would notify him of the employers decision to dismiss him. But the second written notice must not be made until after he was given a reasonable period after receiving the first written notice within which to answer the charge, and after he was given the ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desired. The requirement was mandatory.

Conformably with the ruling inAgabon v. National Labor Relations Commission,the lack of statutory due process would not nullify the dismissal or render it illegal or ineffectual when the dismissal was for just cause. But the violation of Gutang's right to statutory due process clearly warranted the payment of indemnity in the form of nominal damages.