G.R. No. 88626 - Philippine Long Distance Telephone Co. vs. Montemayor

The dispute arose from the complaints of three Traffic Operators employed at Philippine Long Distance Telephone Company’s (PLDT) Davao Exchange.
Two regular employees, Ma. Emma J. Totesora and Miricar A. Marcos, were terminated for allegedly engaging in the unauthorized practice of passing free long distance calls from Davao to Manila.
A third employee, Maria Lourdes U. Macabenta—allegedly employed on a probationary basis—was terminated for failing to meet the minimum requirements for regularization, despite her contention that she had rendered continuous service from April 1985 to August 18, 1986.
The Union representing these employees, along with the petitioner (PLDT), had previously agreed in writing to resolve the dispute through voluntary arbitration.

Ma. Emma J. Totesora and Miricar A. Marcos were caught on separate occasions passing free long distance calls.
Ms. Totesora argued that her act was not entirely “free,” claiming that she merely allowed the conversation to continue slightly beyond regulated time, whereas Ms. Marcos admitted that she placed a free call to her brother in Manila, an act contrary to company regulations.
Based on these admissions and the available records, PLDT maintained that the employees had committed acts inimical to the company’s interest, thereby justifying their dismissal.

Maria Lourdes U. Macabenta’s employment status was questioned since, although initially hired as a probationary employee, she claimed continuous employment for over one year, which by law should have made her a regular employee.
The petitioner argued that her probationary period started only on June 2, 1986 (despite her earlier start date in April 1985) and that her failure to meet the criteria for regularization warranted her dismissal effective June 17, 1986.
Macabenta contended that her prolonged service automatically qualified her as a regular employee under Article 280 of the Labor Code, and that her dismissal was therefore illegal.

The dispute was submitted to voluntary arbitration as agreed by both PLDT and the Union representing the dismissed employees.
Voluntary Arbitrator Alberto Montemayor rendered a resolution on February 14, 1989, and later denied a motion for reconsideration on May 12, 1989.
In his resolution, the arbitrator:

Found that Totesora and Marcos did indeed violate company regulations but opined that outright dismissal was too drastic for a first offense, recommending instead a transfer of assignment.
Expressed confusion over the delayed implementation of the probationary status for Macabenta and, based on the absence of any serious performance issues during her employment, concluded that her reinstatement was the only just course.

PLDT challenged the arbitrator’s resolution by filing a petition for certiorari, contending that:

The reinstatement order for Totesora and Marcos, who had committed acts of dishonesty, constituted a grave abuse of discretion.
The recommendation regarding Macabenta was erroneous because it reinstated her in a position different from her original assignment.

The petitioner maintained that reinstating employees guilty of misconduct could inadvertently encourage further fraudulent behavior, thereby harming company interests, particularly since long distance calls were a crucial revenue source.

Admissions and records establishing that Totesora and Marcos had committed acts of dishonesty affecting the company’s operations.
The continuous employment of Macabenta for more than one year, which under Article 280 of the Labor Code, effectively rendered her a regular employee.

The factual findings of the arbitrator were not disputed by the parties, thereby narrowing the focus of judicial review to questions of law and discretion.

Whether the voluntary arbitrator, in ordering the reinstatement of Totesora and Marcos despite their commission of acts undermining the trust essential to their positions, committed a grave abuse of discretion.

The petitioner argued that the acts of dishonesty involving free long distance calls, considered central to PLDT’s business, justified their dismissal rather than reprieve via reassignment.

Whether the order of reinstatement for Macabenta, a worker who had rendered more than one year of service and should have been considered a regular employee, should be maintained.

The issue involved the determination of her employment status and whether her termination, based on her purported probationary status, was legally justified.

Whether the decisions of a voluntary arbitrator, in a quasi-judicial capacity, are subject to judicial review, particularly when issues of law and allegations of abuse of discretion are raised.

The petitioner questioned the extent of judicial intervention over arbitration decisions that involve interpretations of law and the exercise of discretion.