G.R. No. 160408 - Spouses Pen vs. Spouses Julian

On July 27, 1995, around 9:00 p.m., Jacqueline Tanedo and her family queued at counter No. 29 of Manila Station International for check-in on Philippine Airlines flight No. 102 bound for Los Angeles, California.
PAL employee Joseph Arriola inquired if the required travel taxes had been paid; upon receiving a negative response, he directed them to counter No. 36 for processing.
Ms. Tanedo handed over her travel documents and P2,000.00 to Arriola as payment for discounted travel taxes, but no receipt was issued.
Concurrently, another PAL employee, Arthur B. Tongson, assisted the family at counter No. 35 in completing their travel documents and obtaining boarding passes for Ms. Tanedo and her husband.
Despite assurances by Arriola that seating arrangements would be corrected, upon boarding the plane the family discovered that their seats were apart, prompting them to take a later flight.

On the following day, July 28, 1995, while checking-in again, the family was charged P3,240.00 as travel taxes, which they paid reluctantly.
Ms. Tanedo filed a written complaint with Philippine Airlines against both Arriola and Tongson for alleged extortion, corruption, and bribery related to the handling of their travel documents and payments.

Following the complaint, PAL conducted a thorough investigation.
An inter-office memorandum dated February 6, 1996, charged Arriola and Tongson with corruption, extortion, and bribery under the company’s Code of Discipline, and both employees were placed under preventive suspension for 30 days.
In his answer dated June 28, 1996, Tongson admitted processing the travel documents and verifying the payment in compliance with PTA Circular 01-87, but he denied the extortion allegation.
Subsequent clarificatory hearings in June and July 1996 were held, during which both employees failed to appear despite notice.
On August 19, 1996, PAL terminated the services of both employees after concluding they committed acts meriting dismissal.

Respondent Tongson filed a complaint with the Labor Arbiter alleging illegal suspension, illegal dismissal, and non-payment of wages and benefits, with a prayer for reinstatement, back wages, damages, and attorney’s fees (NLRC-NCR Case No. 00-11-06857-96).
The Labor Arbiter rendered a decision on September 17, 1998, finding Tongson guilty of serious misconduct based on the evidence that indicated a conspiracy between him and Arriola to extort money from Ms. Tanedo.
The NLRC affirmed the Labor Arbiter’s decision on June 15, 1999, dismissing Tongson’s appeal; subsequent motions for reconsideration were denied.
Respondent Tongson then elevated the case by filing a petition for certiorari with the Court of Appeals, contesting the NLRC’s findings and the evidentiary basis of the administrative proceedings.

On August 24, 2001, the Court of Appeals reversed and set aside the NLRC’s decision, holding that:

The issues were primarily factual and not subject to review via certiorari.
The reliance on Ms. Tanedo’s unverified complaint and her responses, being hearsay and not presented under oath or in a formal hearing, did not constitute substantial evidence.

PAL filed a motion for reconsideration on September 14, 2001, which was denied by the Appellate Court in a Resolution dated April 18, 2002.
Ultimately, the petition for review on certiorari was filed, challenging the reversal of the administrative tribunals’ findings and the strict application of evidentiary rules.

Whether the administrative disciplinary proceedings conducted by PAL—via the Labor Arbiter and the NLRC—provided sufficient basis, through substantial evidence, for the dismissal of respondent Tongson for serious misconduct.
Whether the Court of Appeals erred in reversing and setting aside the findings of the Labor Arbiter and the NLRC by applying strict evidentiary rules (including the treatment of hearsay evidence) that are not traditionally binding in non-litigious administrative proceedings.
Whether the unverified and hearsay testimony of Ms. Tanedo should have been accorded any probative value given the relaxed standards of evidence in labor tribunal proceedings.
Whether due process was ultimately observed when respondent Tongson was denied the opportunity for cross-examination of key witness testimonies in the administrative proceedings.