G.R. No. 250199 - Republic vs. Boquiren

Duty Free Philippines Services, Inc. (DFPSI) is a manpower agency that supplies personnel to Duty Free Philippines (DFP).
On March 16, 1989, respondent Manolo Tria was employed by DFPSI and seconded to DFP as a Warehouse Supervisor.

An Audit Report dated January 16, 1998 revealed that 1,020 packs of Marlboro cigarettes (bearing Merchandise Code No. 020101 under WRR No. 36-04032) were omitted from the condemnation proceedings conducted on December 27, 1996.
The audit exposed glaring discrepancies in the documentary records, suggesting a malicious attempt to conceal an irregularity.
The Request for Condemnation related to the subject merchandise was found to be fabricated, with signatories Ed Garcia (Stockkeeper), Catherino A. Bero (DIU Supervisor), and Constantino L. Cruz being held accountable for the irregular inventory loss.

Further investigation uncovered that the subject merchandise had been illegally removed from the warehouse and that the documents falsely indicated its proper condemnation on December 27, 1996.
Ed Garcia, one of the implicated personnel, alleged that he was merely following orders from his superiors, among whom was respondent Tria, to secure a van for what was described as the direct condemnation of the goods.
In response, the DFP Discipline Committee (DFPDC) requested respondent Tria to provide a written explanation regarding the audit findings and the charges raised by Garcia.
Respondent Tria denied involvement in the illegal transaction, asserting that his instruction to search for a van was intended solely for transferring damaged merchandise from the main warehouse to the designated damaged goods warehouse.

On August 27, 1998, the DFPDC issued a Joint Resolution finding respondent Tria guilty of dishonesty for his direct participation in the fabricated condemnation and the pilferage of the 1,020 Marlboro packs.
The Resolution recommended his dismissal for cause, citing a loss of trust and confidence, and resulting in the forfeiture of all company rights and privileges except for earned salaries and leave credits.
On September 18, 1998, DFPSI terminated respondent Tria’s employment and his secondment to DFP based on the DFPDC’s findings.

Aggrieved by his termination, respondent Tria filed a complaint for illegal dismissal along with claims for backwages, attorney’s fees, and damages.
On May 31, 1999, the Labor Arbiter (LA) ruled in favor of respondent, ordering his reinstatement to his former position with all associated benefits and awarding full backwages as of that date, as well as attorney’s fees equivalent to ten percent (10%) of the backwages (though the claim for damages was denied).
The National Labor Relations Commission (NLRC) subsequently affirmed the LA’s decision, albeit deleting the attorney’s fees award.
DFPSI’s motion for reconsideration was denied on March 15, 2002.

DFPSI elevated the case to the Court of Appeals (CA), where for the first time it argued that DFPSI was not the direct employer of respondent, instead asserting that DFP was the actual employer.
Although the CA acknowledged that the employer-employee issue was barred by estoppel (given it was not raised before the LA and NLRC), it still ruled that the dismissal letter issued by DFPSI effectively terminated respondent’s employment.
The CA, respecting the findings of the LA and the NLRC, upheld that respondent was illegally dismissed.
DFPSI’s motion for reconsideration was again denied, as reflected in the CA Resolution dated September 21, 2006.

Ruling that DFPSI was the direct employer of respondent instead of DFP.
Asserting that the issue regarding who terminated respondent’s employment was raised only for the first time on appeal.
Failing to address the liability of DFP as an indispensable party to the illegal dismissal complaint.

DFPSI maintained that, based on its earlier pleadings, the dismissal was for just cause and that due process had been strictly observed in terminating respondent.

Whether DFPSI or DFP is the direct employer of respondent Tria.
Whether respondent’s employment relationship, as admitted in the pleadings, precludes a belated change in theory regarding the employer’s identity.

Whether DFPSI is estopped from introducing the argument that DFP is the real employer since this issue was not raised in the lower court proceedings.
Whether the CA erred by addressing an issue (i.e., the employer’s identity and termination liability) that was raised for the first time on appeal.

Whether the disciplinary findings by the DFPDC were supported by clear and convincing evidence sufficient to justify respondent’s dismissal.
Whether DFPSI complied with due process in the termination of respondent, particularly in light of the evidence adduced in the LA and NLRC proceedings.