G.R. No. 70688 - Fuentebella vs. National Labor Relations Commission

The petitioners, Romulo J. Fuentebella and Jose Angelo Llaneza, are former employees of Hi Marketing Corporation (HIMARK).
The respondents include the National Labor Relations Commission (NLRC), HIMARK, and its officers/managers (Maurel H. Puey, Ribolu D. Terre) involved in the decision-making process regarding their dismissal.
The case is a petition for certiorari challenging the NLRC decision that reversed the labor arbiter’s finding of illegal dismissal.

Both petitioners started as salesmen for HIMARK, engaged in promoting and selling HOTSY, a hot water high-pressure washer.
Due to good performance, Fuentebella earned a raise while Llaneza was promoted to sales supervisor.
Fuentebella’s duties included selling, collecting payments, and remitting sales proceeds; Llaneza supervised salesmen, including Fuentebella.
On July 22, 1982, Fuentebella filed a claim for unpaid third party commissions (TPCs) amounting to ₱2,400.00, which was initially recommended and approved by company officers.

Following the claim, manager Ribolu D. Terre issued a memorandum instructing salesmen to secure prior clearance for TPCs and not to quote prices below the official selling price—indicating a desire to control additional income from commissions.
This directive set the stage for subsequent disputes regarding the sharing of TPCs between the petitioners and management.

On August 13, 1982, Terre abruptly instructed the petitioners to submit their resignations without offering any explanation, allegedly upon orders from “top level management.”
The petitioners complied with the instruction by contacting President Maurel H. Puey, although only one of them (Llaneza) secured a meeting with the President.
Meanwhile, on August 14, 1982, Fuentebella collected ₱6,000.00 from a customer, depositing it in a bank pending the next working day, which later became a point of controversy.
On August 16, 1982, during the scheduled appointment with President Puey, Fuentebella was unable to retrieve the deposited amount, and he subsequently included this collection in his claim for commissions totaling ₱12,800.00.
The issue of withholding the collection and the related inquiries regarding provisional receipts escalated when, on August 24, 1982, the company comptroller, Antonio R. Reyes, demanded the surrender of provisional receipt booklets.
Llaneza inquired about the surrender directive, which seemed linked to Terre’s memorandum about TPCs, but no clear explanation was provided thereafter.

On August 25, 1982, the petitioners sought clarification from President Puey regarding the status of the investigation into the directive to resign.
Comptroller Reyes later called for a meeting with the petitioners, during which he offered a compromise: one month’s salary for every year of service plus accrued commissions and unpaid sales earnings, in exchange for their resignation and the return of the withheld ₱6,000.00 along with the provisional receipts.
The petitioners refused the offer insisting on a proper investigation, with a request to directly address their grievances with President Puey.
Despite attempts to arrange a meeting, petitioners received their termination letters—dated August 31, 1982 for Fuentebella and September 1, 1982 for Llaneza—without a formal explanation or due process.
Fuentebella subsequently questioned the termination directive in writing on September 4, 1982, but received no substantive reply from the management or legal counsels.

On September 7, 1982, petitioners filed a complaint before the NLRC (NCR Case No. 9-5828-82), alleging illegal dismissal, non-payment of wages and commissions, and damages due to a lack of due process and proper charge notice.
Respondents defended the dismissal by alleging dishonesty, fraud, and breach of trust by petitioners—citing Fuentebella’s alleged misappropriation of the ₱6,000.00 and Llaneza’s failure to surrender the provisional receipts.
On April 29, 1983, the Labor Arbiter ruled in favor of the petitioners, declaring their dismissal illegal, ordering reinstatement with full backwages and benefits, and directing payment of Fuentebella’s ₱12,800.00 commission (after deducting the withheld ₱6,000.00).
The NLRC, on December 10, 1984, reversed the labor arbiter’s decision by ordering a payment of a lesser commission to Fuentebella (₱3,152.00) and awarding separation pay to Llaneza.
A Motion for Reconsideration by the petitioners was filed but ultimately denied.

Evidence indicated that manager Terre aimed to appropriate a share of the TPCs from Fuentebella, as reflected in the memorandum and subsequent correspondence.
Fuentebella’s claims and practice of including TPCs in his commission demands, which were at one time approved by company officers, highlighted the irregularities in management’s directive.
The petitioners maintained that their dismissal was precipitated solely by their refusal to share their TPC earnings with Terre, rather than any substantiated acts of dishonesty or insubordination.

Whether the NLRC gravely abused its discretion by setting aside the Labor Arbiter’s decision finding the dismissal of petitioners illegal.

Did the actions of management in ordering the petitioners to resign without providing a clear explanation violate the due process requirements in employment termination?
Was there sufficient evidence to substantiate the claim that petitioners’ refusal to share their third party commissions constituted grounds for termination?
How should the irregularities in the handling of commission claims and the subsequent actions (withholding of the ₱6,000.00 collected by Fuentebella and failure to return provisional receipts) influence the legality of the dismissal?

Whether the proximate cause of termination was merely the petitioners’ refusal to comply with a directive intended to appropriate part of their earnings, rather than any proven misconduct on their part.

Does the evidence show that the termination was premeditated by management with the intention to avoid payment of rightful commissions rather than a response to any acts of dishonesty or insubordination?

Whether the management’s failure to provide the petitioners an opportunity to be heard (due process) negated any justification for their termination.