Case Digest (G.R. No. 192398)
Facts:
This case involved Better Buildings, Inc. (BBI) as the petitioner and the National Labor Relations Commission (NLRC), along with private respondents Halim Ysmael and Eliseo Feliciano. The events leading to this case began when Ysmael, who was hired as a Sales Manager on March 16, 1985, and Feliciano, who served as Chief Supervisor since January 1966, were terminated from their employment on May 3, 1988. The termination notice was delivered by a memorandum from Leda A. Beverford, the Assistant General Manager of BBI, stating they were dismissed effective that same day without prior notice or opportunity for a hearing. Unable to accept this drastic action, Ysmael and Feliciano filed complaints against BBI for illegal dismissal. On March 3, 1989, Labor Arbiter Daisy G. Cauton-Barcelona ruled their dismissal illegal, ordering the reinstatement and awarding backwages, along with moral and e
Case Digest (G.R. No. 192398)
Facts:
- Background of the Parties and Employment
- Petitioner: Better Buildings, Inc. (BBI)
- Private Respondents:
- Halim Ysmael – Hired as a Sales Manager on March 16, 1985; received a monthly salary, free use of a company car and gasoline, and commission.
- Eliseo Feliciano – Employed as Chief Supervisor since January 1966.
- Circumstances of Termination
- On May 3, 1988, BBI, through Assistant General Manager Leda A. Beverford, issued a memorandum terminating Ysmael and Feliciano effective immediately.
- The memorandum, directed to the guard on duty, informed that the private respondents were no longer permitted on the premises.
- Ysmael and Feliciano later initiated a complaint against BBI for illegal dismissal.
- Proceedings Before the Labor Arbiter and NLRC
- On March 3, 1989, Labor Arbiter Daisy G. Cauton-Barcelona ruled that the dismissals were illegal.
- The Arbiter ordered reinstatement with full backwages, maintenance of seniority, payment of salary differentials, and award of moral and exemplary damages.
- The National Labor Relations Commission (NLRC) affirmed the decision with modifications:
- The NLRC reduced the awards for moral and exemplary damages.
- Subsequent developments:
- On September 4, 1996, the case against Ysmael was dismissed based on a compromise agreement, leaving only Feliciano’s case for further resolution.
- Grounds Raised by the Petitioner
- Petitioner contended that Feliciano was validly dismissed for engaging in a business in direct competition with BBI.
- It was alleged that Feliciano:
- Established his own company, Reachout General Services, which competed in the same line of service.
- Diverted business by soliciting and securing service contracts from prominent BBI clients (e.g., the United States Embassy and San Miguel Corporation).
- Hired former BBI employees for his new company, thereby hurting the petitioner’s business.
- The petitioner maintained that these acts constituted a willful breach of trust and disloyalty, justifying the dismissal.
- Procedural Irregularities in the Dismissal Process
- Despite establishing just cause substantively, BBI failed to observe the twin requirements of procedural due process:
- No proper written notice to the respondent detailing the specific charges.
- No opportunity for Feliciano to be heard or present a defense.
- The absence of these procedural safeguards rendered the dismissal abrupt, swift, and devoid of any chance for rebuttal.
- Relief Sought and Court’s Intervention
- BBI filed a petition for certiorari alleging abuse of discretion by the NLRC and its lack/excess of jurisdiction in upholding the dismissal.
- The Court ultimately set aside and annulled the NLRC decision and resolution regarding Feliciano.
- Although recognizing the valid cause for dismissal, the Court held that the lack of due process entitled Feliciano only to a nominal damages award of P5,000.
Issues:
- Substantive Validity of the Dismissal
- Whether Feliciano’s engagement in a competing business and his alleged disloyal acts constituted a just and valid cause for dismissal under Article 282 of the Labor Code.
- Whether the evidence presented by BBI was sufficient to establish willful breach of trust and loss of confidence.
- Procedural Due Process
- Whether BBI observed the constitutional requirement of due process by providing:
- Notice of the specific charges against Feliciano.
- An opportunity for Feliciano to be heard and defend himself before termination.
- The impact of the lack of notice and hearing on the legality of the dismissal.
- Appropriate Remedy and Quantum of Damage Award
- How the failure to observe due process affects the remedies available for an otherwise valid dismissal.
- Whether the award of nominal damages (P5,000) is sufficient to vindicate the violation of Feliciano’s right to procedural due process.
- Points Raised in the Concurrence/Dissent
- The dissent’s contention that the penalty for the due process violation (including the possibility of separation pay) should be greater.
- Whether the indemnity-only remedy inadequately reflects the gravity of the procedural violation.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)