G.R. No. 145417 - De la Cruz, Jr. vs. National Labor Relations Commission

On May 27, 1996, Florencio M. de la Cruz, Jr. was hired by Shemberg Marketing Corporation as a senior sales manager with a monthly salary of P40,500.
The position was newly created to enhance the company’s product positioning in the consumer market and came with responsibilities such as supervising and controlling the sales force, as well as having discretion in the appointment and scheduling of sales personnel.
Petitioner’s appointment was evidenced by a letter dated July 8, 1996 which also outlined the probationary nature of his employment and the performance standards that had to be met to qualify as a regular employee.

On September 14, 1996, petitioner was informed by the company’s Human Resources Manager, Ms. Lilybeth Y. Llanto, of the management’s decision to terminate his employment, citing a drop in company sales as the rationale.
Petitioner requested an explanation and a 30-day written notice but was denied both.
Consequently, he filed a complaint for illegal dismissal, seeking unpaid salary, backwages, 13th month pay, separation pay, and damages.

The dismissal was allegedly based on petitioner’s poor performance, evidenced by a steady drop in company sales.
Negative appraisals from his subordinates—highlighted through affidavits—pointed to dissatisfaction with his management style and dealings with distributors.
He was charged with unauthorized use of company cellular phone for overseas personal calls.
He allegedly submitted plane tickets for his wife and child for reimbursement, which was deemed unauthorized.
In essence, petitioner was terminated for failing to meet company standards and for breaching trust and confidence.

Labor Arbiter Ernesto F. Carreon ruled on August 25, 1997, that the petitioner was illegally dismissed, awarding him separation pay (P40,500.00), backwages (P379,350.00), and unpaid wages (P18,900.00) totaling P438,750.00, while dismissing other claims against key respondents.
On May 13, 1998, the NLRC dismissed respondents’ appeal against the arbiter’s decision.
Respondents then moved for reconsideration, presenting additional evidence including an affidavit from Ms. Lily Joy M. Sembrano, petitioner’s letter of appointment, his job description, a memorandum warning of declining sales, and another memorandum regarding the reimbursement of plane tickets.
On July 9, 1999, the NLRC partially granted the respondents’ motion for reconsideration by modifying the award to P23,900.00, which broke down to unpaid wages of P18,900.00 and an indemnity of P5,000.00.
Petitioner’s subsequent motion for reconsideration was denied on November 19, 1999 before the case was elevated to the Court of Appeals.

The petitioner contended that the Court of Appeals erred in refusing to award backwages despite findings of non-compliance with the two-notice requirement, citing the “Serrano vs. NLRC and Isetann Dept. Store” doctrine on backwages.
He argued that classifying the submission of plane tickets for reimbursement as unauthorized use of company funds amounted to fraud and deceit—a characterization he said was an afterthought, not previously raised before the labor arbiter.
Petitioner also maintained that the failure to award damages and attorney’s fees was a grave abuse of discretion.

Respondents relied on documentary evidence, including affidavits, appointment letters, job descriptions, memoranda, and the physical presentation of plane tickets and fee stubs, to support their claims of unauthorized transactions.
Petitioner questioned the authenticity of some of the additional evidence submitted but failed to provide a persuasive counterargument against the documentary evidence presented.
The admissibility of such evidence was bolstered by Article 221 of the Labor Code, which allows for a broader search for truth without strict adherence to traditional rules of evidence in labor cases.

Whether the Court of Appeals committed reversible error by refusing to award backwages, particularly in light of the alleged failure of the respondents to comply with the two-notice requirement, as per the “Serrano vs. NLRC and Isetann Dept. Store” doctrine.
Whether the Court of Appeals abused its discretion by ruling that petitioner’s submission of plane tickets for reimbursement constituted unauthorized use of company funds, despite the absence of a specific prohibition on such conduct in the original pleadings.
Whether the Court of Appeals abused its discretion in not awarding damages and attorney’s fees to the petitioner.