G.R. No. 118506 - Mabeza vs. National Labor Relations Commission

Petitioner Quirico Lopez was hired by respondent Alturas Group of Companies in 1997 as a truck driver.
He was assigned a specific company vehicle, an Isuzu Cargo Aluminum Van with Plate Number PHP 271, thereby placing him in a position of trust regarding the handling and protection of company property.

In November 2007, while on duty, petitioner was allegedly caught by a security guard attempting to remove 60 kilos of scrap iron, valued at approximately P840, from the company premises.
The scrap iron was reportedly intended for the production of axes made from lift springs.
During the incident, petitioner allegedly admitted to the security guard that he was taking out the scrap iron.
In response, petitioner later submitted a handwritten explanation in the Visayan dialect denying or clarifying the allegations in compliance with a Show Cause Notice dated December 5, 2007 issued by the Human Resource Department Manager.

Dissatisfied with petitioner’s explanation, the company terminated his employment by issuing a Notice of Termination effective December 14, 2007.
The grounds for dismissal included:

An investigation further implicated petitioner in the alleged smuggling and unauthorized selling of company cartons in conspiracy with a private respondent, which led to the filing of a criminal case for Qualified Theft.
Two separate criminal cases for Qualified Theft were filed against petitioner—one for the scrap iron incident and another for the theft of cartons.

Petitioner filed a complaint against the company alleging illegal dismissal and underpayment of wages.

He contended that the smuggling charge was fabricated to justify his dismissal.
He also alleged that the company’s immediate action arose after he reported the loss of an original pay slip, which allegedly could have been used as evidence in filing a labor complaint.
Furthermore, he argued that the company coerced him into executing an affidavit waiving the right to use the pay slip in any further proceedings.

The Labor Arbiter ruled that petitioner’s dismissal was justified due to his role as a truck driver—a position of trust—and substantiated the allegation of theft.
The claim of underpayment of wages was dismissed, with records showing that petitioner was paid in accordance with legal requirements.

On appeal before the National Labor Relations Commission (NLRC) Fourth Division:

The NLRC set aside the Labor Arbiter’s decision.
It found that the evidence did not sufficiently support the termination and noted discrepancies in petitioner’s alleged admission, including the failure of the security guard, Gerardo Luega, to provide an affidavit.
The NLRC also held that petitioner should have been afforded the right to counsel and a proper opportunity to be heard.

The Court of Appeals reversed the NLRC ruling by a Report dated December 18, 2009:

The appellate court held that the respondent was justified in terminating petitioner’s employment on the ground of loss of trust and confidence, citing substantial evidence including affidavits from employees such as Patrocinio Borja and Zalde Tare.
The evidence of the criminal charge—even if the subsequent acquittal occurred—did not preclude the conclusion that petitioner was guilty of conduct inimical to the employer’s interests.
However, the court found a failure to observe full procedural due process as petitioner was not given an adequate hearing.
As a remedy for the procedural due process deficiency, the court ordered petitioner to pay nominal damages of P30,000.

The appellate court ultimately upheld petitioner’s dismissal on substantive grounds (loss of trust and confidence resulting from acts of smuggling and unauthorized selling).
Notwithstanding the justification for dismissal, the breach of procedural due process (lack of opportunity to be heard) led to the imposition of nominal damages.

Whether petitioner’s act of allegedly smuggling scrap iron and engaging in unauthorized selling constituted a breach of trust sufficient to justify his dismissal.
Whether the evidence, including petitioner’s alleged admission and the supporting affidavits, was substantial enough to prove loss of trust and confidence inherent in his role.

Whether petitioner was afforded a full and fair opportunity to be heard prior to his termination.
Whether the failure to comply with procedural due process requirements (such as the right to counsel and proper hearing) invalidated the dismissal or warranted remedial damages.

Whether the filing of criminal cases for Qualified Theft, and petitioner’s subsequent acquittal in one of them, affected the justification for dismissal.
Whether the evidence from preliminary criminal investigations could be used to establish just cause for termination.