G.R. No. 89876 - Pangasi III Electric Cooperative Inc. vs. National Labor Relations Commission

PANELCO III, a cooperative electric entity in Pangasinan, was nearing bankruptcy when the National Electric Administration (NEA) took over its management in September 1984.
The new management conducted a performance audit of all employees and inspected the kilowatt hour (KWH) meters of all consumers—including those of its employees.

Luzon Perejas was employed by PANELCO III as a meter reader since December 21, 1981.
An audit revealed irregularities between April 1984 and November 1984:

Perejas manipulated KWH meter readings of his co-employees by underreading their electric consumptions.
A jumper wire was discovered attached to the KWH meter at his residence, indicating tampering.

On December 1, 1984, Perejas received a memorandum requiring him to explain—within twelve hours—the presence of the tampered meter in his house.
A second memorandum was issued on December 3, 1984, again demanding a written explanation within twelve hours.
On December 4, 1984, Perejas submitted a letter admitting the charge regarding the meter in his residence, apologizing and promising not to repeat the offense.
On December 6, 1984, a further memorandum required him to explain, within six hours, why he manipulated the meter readings of his co-employees; he again admitted the misconduct in writing the following day.
On the same day (December 6, 1984), PANELCO III issued a notice terminating his employment effective at the close of business on December 8, 1984.

On January 3, 1985, Perejas filed a complaint with the National Labor Relations Commission (NLRC) in Dagupan City alleging illegal dismissal as well as underpayment of wages and allowances.
Concurrently, on April 18, 1985, PANELCO III filed a criminal complaint against Perejas in the Municipal Trial Court of Rosales, Pangasinan for theft of electric current using a jumper.
On December 10, 1986, the Labor Arbiter ordered:

Reinstatement of Perejas without loss of seniority rights.
Payment of back wages from the date of dismissal until reinstatement.
Payment of an additional amount (P675.00) covering salary and emergency cost-of-living allowance differentials.

On appeal, the NLRC modified the back wages award to cover only six months, while affirming the remaining parts of the decision.

The court noted that Perejas’s written admissions (regarding the tampered meter and manipulation of readings) constituted substantial evidence of his misconduct.
Although the meter reading cards were not submitted by the petitioner, the admissions made by Perejas sufficed to support the charges.
The employer’s omission to further investigate or provide a formal hearing—especially given the short time frames (twelve and six hours) provided in memoranda—raised issues of procedural due process.

The Labor Arbiter initially classified PANELCO III as a commercial utility firm, applying non-agricultural wage rates which led to an award for salary differentials and allowances.
Upon reconsideration, it was acknowledged that PANELCO III qualifies as a retail establishment (or service entity), thereby affecting the applicable wage ordinance rates.
Ultimately, while there was no underpayment under Wage Orders Nos. 4 and 5, under Wage Order No. 6, Perejas was underpaid by P2.00 per day rather than by P6.00.

Whether the evidence (particularly the written admissions and tampering findings) was sufficient to justify the dismissal of Perejas for theft of electric current.
Whether the omission of meter reading cards and further documentary evidence materially affected the determination on the just cause for dismissal.

Whether the petitioner complied with the procedural requirements under Rule XIV of the Omnibus Rules Implementing the Labor Code, particularly the mandates to provide an “ample opportunity” for the employee to be heard.
Whether the short time frames (twelve hours, and then six hours) given for Perejas to explain his actions constituted a denial of the right to due process, including the opportunity to secure legal counsel.

Whether immediate dismissal, following Perejas’s admissions, was justified in light of the absence of a formal investigation or hearing.
The appropriateness of sanctions imposed on PANELCO III for failing to follow the due process requirements, notwithstanding the substantive evidence of employee misconduct.

Whether the petitioner’s classification of PANELCO III as a commercial utility firm was proper, given its nature as a retail establishment.
The resultant impact on wage computations, particularly the determination of salary differentials and allowances under the relevant Wage Orders.