G.R. No. 146121-22 - San Miguel Corporation vs. National Labor Relations Commission

Respondent Ernesto M. Ibias was employed by petitioner San Miguel Corporation (SMC) since 24 December 1978, initially as a CRO operator and later as a Zamatic operator at the Metal Closure and Lithography Plant.
Ibias was an active and militant member of the labor organization Ilaw Buklod Manggagawa (IBM)-SMC Chapter.
SMC had a Policy on Employee Conduct that detailed disciplinary measures for absences without permission (AWOP) and the falsification of company records. The policy provided a graduated penalty system for AWOPs—from written warnings to suspension, and ultimately, discharge if absences persisted or reached a threshold.

Records show that in 1997, respondent incurred AWOPs on several dates: 2, 4, and 11 January; 26, 28, and 29 April; and 5, 7, 8, 13, 21, 22, 28, and 29 May.
For his AWOPs on specific dates (2, 4, 11 January and 28, 29 April), he received a written warning dated 9 May 1997, indicating that he had already accumulated five AWOPs.
For absences on 28 and 29 April and on 7 and 8 May 1997, SMC accused respondent of falsifying his medical consultation card by claiming that he had been granted sick leave by the plant clinic even though verification showed no such sick leave was given.
Multiple Notices to Explain were issued:

A Notice to Explain on 20 May 1997 regarding the alleged falsification.
A telegram sent on 29 May 1997 instructing him to explain his absence since 26 May 1997.
Two further Notices to Explain on 3 June 1997 concerning both AWOPs from 26 May to 2 June 1997 and the falsification of the medical consultation card.

On 5 June 1997, respondent submitted a handwritten explanation rejecting the allegation of falsification, stating he could not produce a falsified record and that for the days he was absent, he had supporting papers which he later failed to properly submit.
An administrative investigation was conducted on 17 and 23 June 1997, where:

Witnesses Ferdinand Siwa (staff assistant) and Dr. Angelito Marable (retainer-physician) provided testimonies.
Siwa admitted issuing a previous written warning for some AWOPs and noted that respondent produced a consultation card that, upon verification with the plant clinic, was found not to have been issued as claimed.
Marable also testified that the clinic records did not corroborate the sick leave claimed on the questioned dates.

Ultimately, based on the investigation, SMC concluded that Ibias had committed the offense of excessive AWOPs and falsification of company documents and proceeded to dismiss him.

On 30 March 1998, respondent filed a complaint for illegal dismissal before the Acting Executive Labor Arbiter.
The Labor Arbiter, on 2 September 1998, ruled that respondent was illegally dismissed and ordered his reinstatement along with the payment of full backwages, benefits, and attorney’s fees.
SMC appealed the decision to the National Labor Relations Commission (NLRC), which on 31 March 1999 affirmed the Labor Arbiter’s findings but modified the remedy by awarding separation pay (one month per year of service) instead of reinstatement and eliminated attorney’s fees.
Following motions for reconsideration by both parties (denied on 30 June 1999), the dispute was elevated through a special civil action for certiorari consolidated into one case.
The Court of Appeals, on 28 June 2000, reinstated the Labor Arbiter’s decision regarding illegal dismissal and modified the period for computing backwages, ordering payment from 2 July 1997 up to 14 October 1998.
The Court of Appeals relied on:

The inconsistent implementation by SMC of its AWOP policy, noting that warnings given for AWOPs (even when they should have incurred suspension) effectively reset the count of offenses.
The uncorroborated nature of the testimonies regarding falsification, attributing the errors to Siwa’s mishandling of the consultation card.

In its petition for review, SMC argued that the lower tribunals erred in the application of the law—particularly concerning evidentiary rules and the treatment of AWOPs—and claimed that the dismissal was justified given the number of infractions.

Whether the Court of Appeals erred in affirming the findings of the Labor Arbiter and NLRC regarding the respondent’s dismissal.

Did the evidentiary findings support the conclusion that the falsification charge was unproven or improperly weighed?
Was the insufficiency or inconsistency in the implementation of SMC’s AWOP policy a valid basis to void the disciplinary sanction, particularly the dismissal?

Whether the dismissal of respondent for accumulating AWOPs and alleged falsification, under the company policy, was justified.

Did SMC act within its management prerogative by enforcing its established disciplinary rules?
Was the punishment of dismissal proportionate and supported by substantial evidence given respondent’s attendance records and previous warnings?

How should the doctrine of “strained relations” be applied in cases of dismissal, and whether its application (or rejection) affected the outcome regarding reinstatement or separation pay.