G.R. No. L-32624 - People vs. Nierra

The case involves petitioners East Asia Utilities Corp. (EAUC) and its managerial employees Rogelio Q. Lim, Macario P. Balali, and Noel T. Fernandez versus respondent Joselito Z. Arenas.
EAUC is engaged in the distribution and supply of power in Lapu Lapu City, and respondent Arenas was hired in 1994 as a Shift Engineer, later promoted to Shift Superintendent in 1999.
The petitioners filed the motion for reconsideration seeking to set aside a previous resolution that upheld the factual findings of the Court of Appeals (CA) regarding the alleged illegal dismissal of respondent.

On August 3, 2010, respondent noticed unusual activity during his shift around 10:30 p.m. when he heard an electric portable cutter in the maintenance shop.

He observed Romeo M. Cabili, one of the employees, cutting a scrapped retainer ring using an electric portable cutting disc.
Respondent ordered Cabili to return the item and threatened to report the matter if he did not comply.

Later that night, at around 11:00 p.m. to midnight, respondent observed Cabili again, this time welding the cut retainer ring and painting the welded area so that evidence of the cut would not be visible.

Respondent recounted the incident to several co-workers including shift supervisors Nelson T. Dingal, Florante Balili, Ceasar Albarico, and mechanical technician Ernesto P. Cajes.

When prompted if he had prepared a written report, respondent indicated he had not because he believed his immediate verbal threat and counseling of Cabili sufficed.
He made various remarks to explain his delay and unwillingness to formalize the incident, including remarks that suggested humanitarian consideration for Cabili.

The incident came to the attention of Plant Manager Fernandez when he received an anonymous text message on August 7, 2010.

The message alleged that respondent was complicit in letting Cabili commit an infractions and even suggested theft at the plant.
Fernandez consequently initiated an investigation.

On August 10, 2010, respondent verbally reported the incident to Fernandez and was instructed to submit a written incident report.
On August 12, 2010, EAUC formed an Employee Behavior Action Review Panel (EBARP) to investigate the incident.

The panel conducted three hearings (August 13, 20, and 23, 2010).
On September 1, 2010, the EBARP issued a report recommending respondent’s dismissal on grounds of late reporting, toleration, and cover-up of Cabili’s infraction.

On September 2, 2010, petitioners informed respondent of his immediate dismissal.
On September 3, 2010, Cabili filed a resignation and asked for forgiveness, which became part of the record.
Subsequently, respondent filed a case for illegal dismissal with money claims against the petitioners.

The Labor Arbiter (LA) initially found respondent was illegally dismissed and ordered his reinstatement along with monetary awards.
The National Labor Relations Commission (NLRC) reversed the LA’s decision, holding that the dismissal was valid and denying reinstatement or separation pay.
The Court of Appeals (CA) eventually granted respondent’s petition, reversing the NLRC ruling and modifying the LA decision by ordering backwages, separation pay (in lieu of reinstatement), and attorney’s fees.
Petitioners then sought recourse to the Supreme Court to revisit the issue, particularly on the ground that respondent’s delay in reporting was not willful.

Whether the delay in reporting the incident by respondent, a managerial employee, constitutes sufficient grounds for dismissal based on loss of trust and confidence.

The central issue revolves around the timeliness and adequacy of the incident report regarding Cabili’s act, and whether the delay undermined EAUC’s trust in respondent.
The conflicting factual findings between the NLRC and the earlier decisions of the LA and CA necessitated a careful reexamination of the matter.

The application of the doctrine of loss of trust and confidence for managerial employees versus rank-and-file personnel

Whether the lower threshold applied to managerial employees in termination cases can justify respondent’s dismissal despite the absence of immediate prejudice or loss to the employer.
Whether respondent’s inconsistent explanations and failure to properly report the incident amount to a breach sufficient to erode the trust and confidence reposed in him by EAUC.