G.R. No. 169494 - Cabalen Management Co., Inc. vs. Quiambao

The case involves petitioners Cabalen Management Co., Inc. and several individual officers versus respondents, who include employees such as Jesus P. Quiambao, Geraldine M. Palermo, Rochelle B. De Leon, Jocelyn B. Deang, and others.
Respondents were dismissed (with the exception of Quiambao and Palermo, whose status differed) based on alleged infractions against the company’s Code of Conduct.
Separate complaints for illegal dismissal and illegal suspension were filed with claims ranging from backwages and allowances to moral and exemplary damages, as well as demands for reinstatement and regularization.

On September 4, 2001, a memorandum was issued placing respondents on preventive suspension for 30 days without pay and ordering them to file explanations within 48 hours for alleged violations.
Respondents complied by submitting their written explanations, in which they generally denied the charges of infractions such as pocketing tips, using tampered receipts, and other irregular practices.
On October 4, 2001, with the exception of Quiambao and Palermo, respondents were served notices of dismissal after the company adjudged them guilty, a decision which was based on the statements of two witnesses (Balen and Malana) and an audit report outlining alleged discrepancies in financial documents.

The unsworn, unsigned, or partially incomplete statements of co-employees Henry dela Vega Balen and Roderick Malana.
An audit report, dated September 19, 2001, detailing missing and irregular accountable forms, unrecorded transactions, and excessive cancellations of order slips and receipts over a period of 20 months.

The Labor Arbiter, by its Decision of November 27, 2002, found sufficient evidence in the petitioners’ position to validly dismiss some respondents while ordering the immediate reinstatement of Quiambao and Palermo without backwages.
The NLRC, in its Resolution dated September 30, 2003, affirmed the Labor Arbiter’s decision in part, which was later denied a motion for reconsideration by the NLRC.
The Court of Appeals, by its Decision dated April 29, 2005, reversed the NLRC’s findings on evidentiary grounds and ruled that the witness statements and audit report did not demonstrate a valid cause for dismissal.

The statements from Balen and Malana were critiqued for not having proper authentication such as notarization or complete material particulars (e.g., dates of execution and witness information).
The audit report failed to clearly attribute responsibility for the irregularities to the respondents, and the context of the alleged irregularities did not exceed what might normally occur in business operations.
The company’s internal procedures on disciplinary actions were not fully observed, particularly in terms of clearly stating specific charges and following proper notice requirements prior to dismissal.

Certain respondents, despite facing allegations of misconduct, had previously been awarded certificates of commendation and recognition, implying some incongruity with the claims of systemic wrongdoing.
The failure to conduct a proper administrative investigation, including the absence of a detailed employee hearing as mandated by the company’s Code of Conduct and statutory due process, was noted as a significant procedural deficiency in the dismissal process.

Whether the dismissal of respondents was supported by substantial and admissible evidence constituting a valid cause under the Labor Code.
Whether due process was observed, particularly with respect to the requirement of serving two distinct written notices which clearly outlined the charges and allowed for the respondent’s defense.

Whether the unsworn and incomplete statements of the witnesses (Balen and Malana) and the deficient audit report provided rational probative value for establishing the respondents’ culpability.
Whether the documents presented could be accepted as sufficient evidence given their failure to meet the basic standards of authentication and detail.

Whether the petitioner (Cabalen Management Co., Inc.) adequately followed its own Code of Conduct and the procedural requirements mandated by the Labor Code, including the issuance of precise and substantiated Notice to Explain and Corrective Action Reports.
Whether the procedural lapses, particularly the vagueness of the charges, automatically render the dismissal invalid or merely expose the employer to liability for damages due to violation of the employee’s right to due process.

Whether the company satisfactorily proved that respondent Quiambao’s termination was justified on the ground of business losses and retrenchment, especially in light of counter-evidence presented by Quiambao.