G.R. No. L-34940 - Lacanilao vs. Court of Appeals

Petitioner Eduardo Bughaw, Jr. was employed as a production worker by Treasure Island Industrial Corporation since March 1986.
The respondent had received information that several employees were using prohibited drugs during working hours and within company premises.

On 5 June 2001, one of the company’s employees, Erlito Loberanes, was caught in flagrante delicto by the police while in possession of shabu.
Loberanes, after his arrest, admitted to the commission of the crime and implicated petitioner by claiming that part of the money used for buying illegal drugs was provided by him, and that the drugs purchased were for their personal consumption.

On 29 June 2001, respondent issued a Memo for Explanation to petitioner, requiring him to explain within 120 hours why disciplinary action should not be imposed for his alleged involvement in the drug-related offense.
Petitioner was also directed to attend an administrative hearing on 16 June 2001 at the office of respondent’s legal counsel and was placed under preventive suspension for 30 days upon receipt of the notice.

Despite receiving the first notice, petitioner failed to appear for the scheduled hearing on 16 June 2001.
A second letter dated 19 July 2001 was sent, directing him to attend another hearing on 23 July 2001, but petitioner again failed to show up.
A third letter, dated 21 August 2001, served as the notice of termination, terminating petitioner’s employment retroactive to 11 June 2001, on the grounds of drug use during working hours and failure to attend hearings or submit a written explanation.

On 20 July 2001, petitioner filed a complaint for illegal dismissal against both the respondent and its President before the Labor Arbiter.
Petitioner asserted that he had a long-standing record of conscientious service and contended that his suspension and subsequent dismissal were based on uncorroborated allegations, as the evidence presented by respondent was limited to the statement of a co-worker.

The Labor Arbiter ruled in favor of petitioner on 8 January 2002, finding that respondent failed to comply with the due process requirements and ordering the payment of separation pay, backwages, and unpaid wages.
The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision in its Decision dated 28 August 2003 and denied respondent’s Motion for Reconsideration via its Resolution dated 27 February 2004.
In contrast, the Court of Appeals reversed the NLRC and Labor Arbiter decisions, holding that petitioner was afforded sufficient opportunity to explain his side since notices had been duly received, and that his repeated absence accounted for his lack of defense.

Petitioner elevated the case to the Supreme Court via a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court.
The sole issue raised was whether or not petitioner was illegally dismissed from employment.
The case presented a conflict between the findings of the Labor Arbiter and NLRC (which held the dismissal illegal due to due process violations) and the Court of Appeals (which found that petitioner’s non-attendance of the hearings and failure to submit an explanation negated any due process violation).

Was the dismissal substantively justified under the charge of serious misconduct (drug use) as evidenced by the statement of Loberanes?
Was the procedural due process observed in effecting the dismissal, particularly with regard to the two-notice rule (i.e., both a notice for explanation and a separate notice of termination)?

Can Loberanes’s statement, without any corroborating evidence, be deemed sufficient to justify dismissal based solely on the charge of using illegal drugs?
Does petitioner’s repeated failure to attend the administrative hearings negate or mitigate the due process safeguards promised by law?

Does the lack of a properly served second notice (notice of termination) automatically render the dismissal illegal, regardless of the substantive ground (serious misconduct) established?
To what extent should the employer’s evidentiary burden of proving proper termination be weighed against petitioner’s omissions?