Facts:

The case involves Estrella S. BaAez and the De La Salle University Employees Association (DLSUEA), represented by Union President Baylon R. BaAez, as petitioners against De La Salle University, with several named individuals from the institution as respondents. The controversy originated from actions taken against BaAez, who served as a Curriculum Evaluator at the university, tasked with assessing fees for graduate students' comprehensive examinations and thesis defenses. In August 1996, the University received allegations that students were paying examination fees to an individual named "Ester" in the Registrar's Office, who issued temporary receipts without submitting the payments to the university's accounting department.

An investigation revealed that BaAez and Virginia Cantillas, the Records-in-Charge of the Registrar's Office, were implicated in the unauthorized collection of fees. Consequently, both were placed under a preventive suspension of 2

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Facts:

Background and Employment Context

• Estrella S. BaAez was employed by De La Salle University as the Curriculum Evaluator for Graduate Studies, with the specific task of assessing fees for comprehensive examinations and thesis defenses.
• The University received a report in August 1996 that several graduate students had paid comprehensive examination fees to a certain “Ester” from the Registrar’s Office, who issued temporary receipts without remitting the collections to the cashiers at the Accounting Office.

Allegations of Fraudulent Collection and Administrative Investigation

• An investigation attributed the reported anomalies to BaAez and Virginia Cantillas, Records-in-Charge of the Registrar’s Office. BaAez was alleged to have assessed the fees and directed the students to pay Cantillas.
• The University required both employees to explain why they should not be administratively charged for the unauthorized collection of fees and placed them under a 20-day preventive suspension pending further investigation.
• Prior to the scheduled explanation, Cantillas tendered her resignation and demanded retirement benefits, whereas BaAez denied the allegations, alleging harassment linked to her husband’s (Union President) previous complaints for the employees’ association.

Filing of Complaints and Initial Proceedings

• BaAez, together with the Union (represented by her husband) and later consolidated with Cantillas’ complaint, filed a complaint before the National Labor Relations Commission (NLRC) for unfair labor practice, illegal suspension/dismissal, reinstatement, and backwages.
• The University, in turn, terminated the employment of both BaAez and Cantillas on October 30, 1996, simultaneously forfeiting all benefits.
• Both complainants subsequently amended their complaints to include illegal dismissal and additional monetary claims such as 13th month pay, salary differentials, unpaid wages, longevity, and service incentive leave benefits.

NLRC and Labor Arbiter Decisions

• On July 31, 1998, Labor Arbiter Felipe T. Garduque II rendered a consolidated decision dismissing charges of illegal suspension/dismissal and unfair labor practice but awarding monetary benefits (salary increases and pro-rata 13th month pay) to the complainants.
• Subsequent proceedings saw the NLRC remanding the case to the Arbitration Branch for further determination regarding BaAez’s involvement in the alleged conspiracy, as well as procedural and evidentiary issues.
• On August 14, 2001, Labor Arbiter Nieves V. de Castro ordered the reinstatement of BaAez with payment of backwages and other benefits, while dismissing Cantillas’ complaint except for directing payment of certain monetary benefits as per the Collective Bargaining Agreement (CBA).

Procedural Motions and the Court of Appeals Decision

• Respondents (the University and other officials) filed various motions, including a petition for certiorari and urgent manifestations with the Court of Appeals, seeking temporary restraining orders and injunctions to halt the arbitration proceedings.
• On April 30, 2004, the Court of Appeals set aside earlier NLRC decisions—including the August 25, 1999 decision and the September 30, 1999 resolution—as well as Labor Arbiter de Castro’s August 14, 2001 decision, and reinstated Labor Arbiter Garduque’s July 31, 1998 decision with modifications regarding the monetary awards.
• The Court of Appeals also denied the motion for reconsideration filed in February 2005 by petitioners and Cantillas.
• The central issue eventually raised in this petition was whether BaAez was illegally dismissed, given that valid dismissal under Article 282 of the Labor Code requires just and valid cause, supported by clear and convincing evidence, and must afford the employee an opportunity to be heard.

Evidence of Fraud and Conspiracy

• Testimonies from multiple witnesses illustrated the fraudulent scheme:
• Cynthia Lim, the University’s Internal Auditor, testified regarding the issuance of provisional receipts without corresponding official receipts.
• Sr. Ma Teresa S. Cantos testified that BaAez directed payments to Cantillas for various examination and defense fees.
• Testimonies from students (Rehbi J. Baraca, Washington Lee Alto, and Lourdes S. Bangcoy) corroborated instances of payments made without proper documentation, indicating irregularities in fee collection.
• BaAez denied direct involvement in the conspiracy and maintained that Cantillas had exonerated her in a later counter-affidavit.
• However, inconsistencies in Cantillas’ counter-affidavit compared with her earlier declarations weakened the defense, leading to the conclusion that both employees were implicated in the fraudulent scheme.

Due Process and Procedural Fairness

• The University conducted three scheduled hearings for the administrative investigation, which BaAez failed to attend even after a rescheduling at her request.
• The Court found that BaAez was given ample opportunity to explain her side and confront the charges against her, thereby satisfying the procedural due process requirement.
• The disciplinary measures, including preventive suspension and subsequent dismissal, were upheld as proper responses to serious misconduct that posed a threat to the integrity of the University’s operations.

Issue:

Legality of Dismissal

• Whether the dismissal of petitioner BaAez was justified under Article 282 of the Labor Code, which mandates that a termination must be supported by clear and convincing evidence of just cause.
• Determination of whether the fraudulent acts and the alleged conspiracy to defraud the University amounted to serious misconduct warranting dismissal.

Due Process in Administrative Proceedings

• Whether BaAez was afforded the due process necessary, including the opportunity to be heard and to present her defense during the administrative investigation.
• Assessment of whether the rescheduling of hearings and the opportunity provided were sufficient for procedural fairness.

Forfeiture of Monetary Benefits

• Whether respondents (the University and its officials) had a legal basis to forfeit the monetary benefits due to BaAez as an accompanying penalty for her termination.
• Evaluation of the contractual and legal obligations, particularly under the CBA, regarding the payment of benefits such as 13th month pay, salary increases, and cash conversion of leave credits.

Evidentiary Support and Discretion of the Labor Arbiter

• Whether the actions and conduct of BaAez and Cantillas, as supported by witness testimonies, provided sufficient evidence of their involvement in fraudulent transactions.
• The appropriateness of relying on circumstantial evidence and the discretion afforded to the Labor Arbiter in determining the need for further trial on the merits.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)