G.R. No. 146367 - Picar vs. Shangri-La Hotel

Case Digest (G.R. No. 146367)
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Facts:

Employment relationship and job duties

Shangri-La Hotel employed Silverio T. Picar as repair and maintenance supervisor of its Engineering Department on November 11, 1993.
Picar was in charge of respondent’s employees as well as the workers provided by KC Agency, an independent contractor.

Complaints against Picar

Sometime in November 1995, an employee of Shangri-La Hotel and three KC Agency workers filed complaints against Picar.
The complainants alleged that Picar:

Required them to work in the renovation of his house in Tondo, Manila.
Conducted the “trade test” at his house.
Used materials belonging to Shangri-La Hotel in renovating his house.
Extended loans with exorbitant interest rates to his subordinates.

Preventive suspension and initial denial

By letter dated December 14, 1995, Shangri-La Hotel asked Picar to comment on the complaint.
Shangri-La Hotel placed Picar under preventive suspension for fifteen (15) days.
In his comment, Picar denied using respondent’s materials in the renovation of his house.
Picar admitted, however, that he hired several employees of respondent to work for him during their days off.

Administrative investigation and dismissal

A formal administrative investigation ensued, during which both parties were given an opportunity to present evidence.
On February 22, 1996, Shangri-La Hotel dismissed Picar from the service.
Although the record showed that Picar did not use respondent’s materials for the house renovation, Shangri-La Hotel found that Picar:

Required its employees to work for him.
Lent money to his subordinates with high interest rates.
Disregarded respondent’s Code of Discipline.
Breached the trust reposed in him.

The dismissal was anchored on Article 282 of the Labor Code.

Illegal dismissal complaint before the NLRC

Picar filed with the National Capital Region Arbitration Branch, Quezon City, a complaint for illegal dismissal against respondent.
The case was docketed as NLRC NCR Case No. 00-02-01461-96.

Labor Arbiter ruling

On September 30, 1996, the Labor Arbiter rendered a Decision finding that Picar was legally dismissed.

NLRC ruling

On appeal, the NLRC reversed the Labor Arbiter’s Decision.
The NLRC held that Picar’s dismissal was illegal.
The NLRC ordered respondent to pay:

Full backwages from dismissal up to finality.
Separation pay equivalent to twelve (12) month salary for every year of service.
Ten percent (10%) of the total award as attorney’s fees.

Court of Appeals ruling via certiorari

Respondent filed a petition for certiorari with the Court of Appeals.
On November 29, 2000, the Court of Appeals reversed the NLRC and affirmed the Labor Arbiter.

Court of Appeals reasoning on due process and cause

The Court of Appeals stated the two requisites for a valid dismissal:

Dismissal must be for causes expressed in Article 282 of the Labor Code.
The employee must be accorded due process.

The Court of Appeals found no dispute that due process was complied with because:

Picar was asked to answer written charges.
A formal investigation and hearing occurred.
Complainants testified.
Respondent allowed cross-examination.
Respondent allowed Picar to present witnesses in his behalf.

The Court of Appeals treated the remaining issue as whether the cause for termination was established.
The Court of Appeals adopted and quoted the Labor Arbiter’s disquisition, as follows:

Picar claimed that the contractor’s workers worked voluntarily on their days off and that they were not forced.
The Labor Arbiter found that as supervisor in the repair and maintenance section, Picar could decide which contractor employees continued to work at the hotel.
The Labor Arbiter found that workers assigned to Picar’s house worked many weekends on their days off.
The Labor Arbiter noted that an applicant took a “trade test” helping others remodel Picar’s house.
The Labor Arbiter concluded that the hotel had reasons to believe casual workers helped remodel Picar’s house out of fear for their jobs.
Picar admitted during investigation that he lent money to the contractual workers and received interest voluntarily.
Picar later denied receiving interest, and the contradiction affected credibility.
The Labor Arbiter found it doubtful that Picar, a salaried employee, would lend money to low-salaried casual workers who would insist on paying interest absent being required.
The Labor Arbiter held that the hotel had reason to believe Picar abused his power by lending money at exorbitant rates to casual workers.

The Court of Appeals also found that Picar was a supervisor or, in any case, a managerial employee, in whom trust was reposed.
The Court of Appeals held that loss of trust and confidence justified termination for supervisors or personnel occupying positions of r...(Subscriber-Only)

Issues:

Validity of the dismissal

Whether Picar was illegally dismissed from employment.
Whether the dismissal was justified under Article 282 of the Labor Code.

Loss of trust and confidence and evidentiary sufficiency

Whether the Court of Appeals correctly found that Picar’s acts warranted termination for breach of trust/loss of trust and confidence.
Whether the requirements for dismissal based on loss of trust and confidence were satisfied in the case of a supervisor or managerial employee.

...(Subscriber-Only)

Ruling:

(Subscriber-Only)

Ratio:

(Subscriber-Only)

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Case Digest (G.R. No. 146367)
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