Facts:

The case involves J' Marketing Corporation (JMC) as the petitioner and Fernando S. Iguiz as the respondent. Iguiz was employed by JMC as a driver in September 1995 and was later promoted to collector/credit investigator at JMC's Kalibo Branch. On December 11, 2006, Iguiz submitted a Daily Cash Collection Report for the week of December 4-9, 2006, but was found to be short in his remittance by P5,811. JMC's Kalibo Branch Manager, Pepito P. Estrellan, issued a memorandum requiring Iguiz to explain the shortage within 24 hours and subsequently suspended him. In his response dated December 14, 2006, Iguiz claimed that the amount was lost due to flooding caused by Typhoon "Siniang" and tendered the amount as payment.

Following this incident, JMC conducted an audit and discovered further discrepancies involving unremitted collections totaling P15,300 and $29 from 14 customers, which lacked official receipts. Estrellan issued another memorandum on February 8,...

Facts:

Employment and Promotion:

• Respondent Fernando S. Iguiz (Iguiz) was hired as a driver by petitioner J' Marketing Corporation (JMC) in September 1995. JMC is a company engaged in selling appliances and has several branches in the Visayas region. After nine months, Iguiz was promoted to the position of collector/credit investigator at JMC's Kalibo Branch.

First Incident - Shortage in Remittance:

• On 11 December 2006, Iguiz submitted a Daily Cash Collection Report and remitted his collections for the week of 4-9 December 2006. JMC discovered a shortage of P5,811 in Iguiz's remittance.
• Iguiz was directed by Pepito P. Estrellan, JMC's Kalibo Branch Manager, to explain the shortage within 24 hours and was suspended from his position.
• Iguiz responded with a notarized letter on 14 December 2006, stating that the P5,811 was lost due to a flood caused by typhoon "Siniang." He also tendered the amount as payment. JMC did not pursue further investigation.

Second Incident - Unremitted Collections:

• JMC conducted an audit of Iguiz's customers under his coverage area (Area 7). The audit revealed unremitted collections of P15,300 and $29 from 14 customers, without corresponding official receipts, covering the period from April 2005 to December 2006.
• On 8 February 2007, Estrellan issued a memorandum asking Iguiz to explain within 24 hours why he should not be reprimanded for loss of trust and confidence. An administrative investigation was conducted, but Iguiz did not sign the report.
• Iguiz denied the allegations in his reply-memorandum dated 12 February 2007, stating that he never accepted payments without issuing receipts and that no formal complaint had been filed against him.

Termination:

• On 7 March 2007, JMC issued a memorandum terminating Iguiz's employment on the grounds of dishonesty and breach of trust and confidence, citing the unremitted collections and the previous P5,811 shortage.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Substantive Due Process:

   • For a dismissal to be valid, it must be based on a just or authorized cause under the Labor Code. JMC terminated Iguiz for dishonesty and breach of trust under Article 282(c). However, the Court found that JMC failed to provide substantial evidence to prove that Iguiz willfully breached the trust reposed in him. The evidence presented by JMC, including the audit report and affidavits, was insufficient and lacked transactional details.

2. Procedural Due Process:

   • The Labor Code requires two notices and a hearing before an employee can be dismissed. JMC issued two notices to Iguiz, but the Court found that the process was rushed and did not provide Iguiz with a reasonable opportunity to defend himself. The 24-hour and 12-hour deadlines given to Iguiz to respond were insufficient and violated the implementing rules of the Labor Code.
   • The administrative investigation conducted by JMC was also flawed, as Iguiz was not given a proper opportunity to participate, present evidence, or confront witnesses.

3. Entitlement to Remedies:

   • Since Iguiz was illegally dismissed, he is entitled to reinstatement and backwages under Article 279 of the Labor Code. However, due to the strained employer-employee relationship, reinstatement is no longer feasible, and separation pay is awarded instead.
   • The Court also upheld the NLRC's award of moral damages, exemplary damages, and attorney's fees, as JMC acted in bad faith in terminating Iguiz and violated his right to security of tenure.

Conclusion:

The Supreme Court affirmed the CA's decision, ruling that Iguiz was illegally dismissed and is entitled to backwages, separation pay, damages, and attorney's fees. JMC failed to prove just cause for dismissal and did not comply with procedural due process requirements.