Title
Mamaril vs. Red System Co., Inc.
Case
G.R. No. 229920
Decision Date
Jul 4, 2018
Employee dismissed for repeated safety violations and concealment of accidents; preventive suspension upheld; entitled to 13th month and SIL pay.
employee dismissal
safety rules violation
lawful orders
A

Case Summary (G.R. No. 229920)

Employment, Training, and Safety Rules

Red System required drivers to observe specific safety safeguards before leaving parked vehicles. During pre-employment orientation and subsequent safety seminars, drivers were reminded to place a tire choke (kalso), engage the hand brake, and shift the transmission to first gear prior to departure. These safeguards were intended to prevent the movement of a truck while it was being pushed by a forklift during loading and unloading operations. Red System’s rules were reinforced through mandatory seminars and were likewise written in the company Code of Conduct.

Mamaril complied with the orientation and, over the course of his two-year stint with Red System, attended a pre-orientation seminar and five safety seminars. His work primarily involved driving and transporting goods, which made the safety rules directly related to his duties.

First Accident and Concealment

During the early part of his employment, Mamaril failed to observe the safety requirements three days after he began work. He did not put a tire choke and shifted the truck’s gear to neutral after parking. As a result, the truck moved and caused damage to Coca-Cola products valued at Php 14,556.00. Mamaril did not report the incident and instead concealed it. When Red System conducted an administrative hearing on November 9, 2011 regarding fraudulent and anomalous re-fueling charges on the truck he had been driving, Mamaril admitted that he had encountered an accident in the past when asked whether he violated any other company regulations or had met an accident that caused damage to the truck.

After Red System discovered Mamaril’s mishap, it reassigned him as a warehouse yard driver, where he was tasked to maneuver trucks to ensure proper parking in preparation for safe loading and unloading.

Second Accident, Discovery of Damage, and Expanded Infractions

Despite the reassignment, Mamaril committed another infraction. On November 12, 2011, he parked truck PIK 726 without again putting a tire choke and engaging the hand brake. The parked truck moved and hit another vehicle, causing damage amounting to Php 25,500.00 and additional, unspecified damage to the vehicle hit. He again concealed the incident. Red System learned of the second mishap only when, in February 2012, it received a Job Order for repair of the truck from Motormall Davao Corporation.

Red System investigated and found Mamaril to be responsible. On April 10, 2012, it issued a Notice to Explain to Mamaril, warning that the charges were serious and might warrant dismissal. On May 3, 2012, Mamaril submitted a written explanation in which he admitted violating the safety rules that led to damage.

During the subsequent administrative hearing on June 8, 2012, Mamaril admitted his failure to engage the hand brake and put a tire choke that resulted in damage. Red System also discovered additional unreported violations, including pilferage, tardiness, and other breaches of its safety rules.

Preventive Suspension

While the administrative proceedings were ongoing, Red System’s officers observed that Mamaril had several near-accident “misses” and showed lack of concern for his work. He was advised to focus on his duties, but the advice was unheeded. To protect company personnel and equipment, Red System placed him under preventive suspension for one month, effective August 3, 2012. The preventive suspension was explained to Mamaril by the Site Human Resource Officer and his supervisor.

Before the expiration of the preventive suspension, Mamaril was instructed by his supervisor to report for work on September 4, 2012, but he did not comply and returned only on September 18, 2012.

Grounds for Termination Under the Labor Code and Company Code

After completion of the investigation, Red System found Mamaril guilty of violating the company Code of Conduct, particularly Article 4 on Unacceptable Conduct and Behavior, and Rule 5, Section 2 on “Other Offenses or Other Acts of Negligence, Inefficiency in the Performance of Duties or in the Care, Custody/or Use of Company Property, Funds or Equipment Where the Amount of Loss or Damage to the company amounted to more than Php 25,000.00.” Based on these findings, Red System terminated Mamaril for willful disobedience and willful breach of trust under Article 297 of the Labor Code.

Complaint for Illegal Dismissal and the Labor Arbiter’s Ruling

Mamaril filed a complaint for illegal dismissal with damages and attorney’s fees. He argued that his termination was harsh and disproportionate, and he sought reinstatement and backwages from the time of dismissal until reinstatement, as well as moral damages, exemplary damages, and attorney’s fees. He also claimed that he suffered mental anguish, social humiliation, and a besmirched reputation.

The Labor Arbiter dismissed the complaint on November 20, 2013. The Labor Arbiter held that Mamaril was validly dismissed because he was negligent in failing to follow Red System’s safety instructions, and Mamaril had admitted complicity in such negligence. The Labor Arbiter found that Mamaril’s propensity to violate safety rules and conceal his misdeeds rendered him unfit to remain in service. The Labor Arbiter also refused to award thirteenth month pay and service incentive leave (SIL) pay, reasoning that they were not substantiated and were not properly discussed or included in his position paper.

NLRC Review and Modification

On appeal, the NLRC affirmed the Labor Arbiter’s decision with modification through a Resolution dated April 24, 2014. The NLRC concluded that Mamaril was validly dismissed because he violated Red System’s Code of Conduct. It rejected Mamaril’s claim for reinstatement and backwages, and likewise denied moral and exemplary damages for lack of evidence of malice or bad faith. It also denied attorney’s fees for lack of legal and factual basis.

The NLRC rejected Mamaril’s theory that he had been subjected to a “double penalty.” It clarified that his initial suspension was preventive suspension, a disciplinary measure imposed pending investigation, not a final penalty.

However, the NLRC awarded Mamaril’s thirteenth month pay and SIL pay. It found that Red System failed to present documents proving payment and thus Mamaril remained entitled to these benefits. The NLRC limited the monetary award to three (3) years prior to the filing of the complaint in line with Article 291 of the Labor Code. It directed the computation of the money claims during pre-execution proceedings.

Court of Appeals Ruling

Mamaril then filed a petition for certiorari under Rule 65 with the Court of Appeals. On September 9, 2016, the Court of Appeals denied the petition and affirmed the NLRC. It found no reversible error in the findings that Mamaril was validly terminated. The Court of Appeals reasoned that Mamaril’s repeated failure to comply with safety instructions constituted just cause. It treated his acts as willful disobedience, negligence, and willful breach of trust under the Labor Code. It also affirmed the characterization of the suspension as preventive rather than punitive, concluding that Red System was not liable for double penalty.

The Court of Appeals further upheld the award of thirteenth month pay and SIL.

Issues Raised Before the Supreme Court

Before the Supreme Court, the issues were confined to whether (i) Mamaril was illegally dismissed and therefore entitled to reinstatement and full backwages, and (ii) Red System committed a prohibited “double penalty” by suspending him and later dismissing him for the same infraction.

Mamaril maintained that the preventive suspension was improper and effectively amounted to a penalty. He argued that the administrative hearing involved incidents that occurred earlier and that the preventive suspension was imposed only in September 2012, despite his continued employment from February until September 2012. He contended that if he were a threat, preventive suspension would have been necessary earlier. He also argued that the dismissal was harsh and excessive because he admitted his misdeeds and offered to pay the cost of the damage, which he claimed warranted a lesser penalty.

Red System responded that the preventive suspension was correctly issued pending investigation and that Mamaril’s dismissal remained valid even if the preventive suspension had been challenged. It asserted that after the administrative investigation, Mamaril was found guilty of grave and blatant violation of the company’s safety rules. It also relied on the pattern of violations revealed during the two-year employment, including repeated safety breaches and other infractions, to support termination.

Scope of Review Under Rule 45

The Supreme Court reiterated that jurisdiction under Rule 45 in a petition for review on certiorari was limited to reviewing errors of law, not errors of fact. It stated that factual findings would not be disturbed unless they were completely devoid of support in the record or the assailed judgment was based on gross misapprehension of facts. The Court concluded that no such circumstance existed and that the issues principally required reevaluation of evidence, which was outside the proper province of a Rule 45 review.

Legality of Dismissal for Willful Disobedience

The Court upheld the dismissal and rejected the claim of illegal termination. It reaffirmed the constitutional commitment to workers’ security of tenure but emphasized that social justice did not require every labor dispute to be resolved in labor’s favor. It recognized that labor law also protects the employer’s right to manage its operations, including the dismissal of employees, provided management prerogative was exercised reasonably and in good faith and not to defeat or circumvent workers’ rights.

The Court invoked the statutory standard under Article 297 (formerly Article 282) which allows termination for serious misconduct or willful disobedience of lawful orders, gross and habitu

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