Title
Manila Electric Co. vs. National Labor Relations Commission
Case
G.R. No. 84282
Decision Date
Mar 6, 1990
Meralco employee dismissed after unproven extortion allegations; SC ruled illegal dismissal due to lack of due process, insufficient evidence, and denied confrontation rights.
illegal dismissal
employee
due process
A

Case Summary (G.R. No. 84282)

Factual Background

Isagani V. De La Cruz served as a meter reader for Manila Electric Company and was responsible for reading electric meters and delivering notices of consumption. On October 20, 1985, he and his brother-in-law, Jaime R. Munera, were reported in the vicinity of the PNR Compound in Paco, Manila. Local residents informed barangay authorities, who referred them to the police. Two residents executed sworn statements alleging that the pair introduced themselves as company inspectors and extorted money in relation to alleged illegal electrical connections.

Company Investigation and Criminal Proceedings

During the police inquiry, company line patrol inspector Edilberto O. Sierra testified that an electric meter installed at the residence of Lydia F. Ortaleza corresponded to an inactivated meter previously recorded under Agueda A. Cajigal. Sierra stated that the private respondent lacked authority to install meters. Two criminal complaints followed: one for robbery-extortion by Encarnacion Alipio, dismissed for failure to prosecute; and one for qualified theft by Sierra, dismissed for insufficiency of evidence. The company placed the private respondent under preventive suspension on December 2, 1985 and commenced a company investigation on December 9, 1985.

Private Respondent's Account

The private respondent denied misconduct. He submitted a sworn statement that he accompanied his brother-in-law to look for a friend at the PNR Compound and that earlier they had retrieved an inactivated meter at Sta. Ana which his brother-in-law subsequently installed at Ortaleza’s residence. He asserted that he objected to the installation, that he identified himself when the barangay authorities arrived, and that he did not extort money. His brother-in-law admitted installing the meter but denied any extortion and characterized his act as a prank.

Labor Arbiter Proceedings and Ruling

The labor arbiter resolved the complaint on the basis of the parties’ position papers and without a clarificatory hearing. The arbiter found the private respondent and his brother-in-law’s explanations incredible and concluded that retaining the private respondent would be unfair to the company. The arbiter therefore sustained the dismissal for cause but ruled that the employer violated Section 4, Rule XIV of the Rules implementing Batas Pambansa Blg. 130 by imposing preventive suspension in excess of thirty days. The arbiter awarded P5,542.00 for the excess preventive suspension and compassionate financial assistance of P6,927.50, totaling P12,469.50.

National Labor Relations Commission Decision

On appeal, the Fourth Division of the Commission set aside the labor arbiter’s decision and declared that the private respondent was illegally dismissed. The Commission ordered reinstatement without loss of seniority and awarded backwages from March 5, 1987 until actual reinstatement. It also directed payment of two months’ salary withheld during the period of preventive suspension in excess of thirty days and provided that, if reinstatement proved infeasible, separation pay should be given. The Commission concluded that the company investigation denied the private respondent the opportunity to confront his accusers and that the charges against him lacked clear and convincing proof.

Issues Presented on Certiorari

The petition raised before the Supreme Court alleged that the Commission violated its Rules by reversing the labor arbiter, that the Commission disregarded settled jurisprudence affording deference to arbiter findings supported by substantial evidence, and that the Commission committed grave abuse of discretion. The petitioner sought annulment of the Commission Decision and a temporary restraining order against its enforcement.

Parties' Contentions Before the Court

Manila Electric Company contended that the labor arbiter properly exercised discretion under Section 3, Rule VII of the Revised Rules of the National Labor Relations Commission to resolve the case on pleadings without a clarificatory hearing and that the Commission improperly substituted its own factual conclusions for those of the arbiter. The respondents argued that the Commission correctly found denial of procedural due process at the company level and at arbitration, and that the Commission’s factual appraisal was justified by the record.

Supreme Court's Analysis of Procedural Due Process

The Court treated the main pleading as a special civil action for certiorari in line with precedents such as Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219 (1987), and reiterated that labor cases are properly reviewed by certiorari. The Court observed that although the labor arbiter has discretion under Section 3, Rule VII to determine the need for a hearing, that discretion must be exercised prudently. The Court found that despite the private respondent’s claim that he had not been allowed to confront his accusers, the arbiter proceeded to resolve the case on position papers, thereby depriving the private respondent of the opportunity to confront adverse witnesses and to present evidence in his defense.

Supreme Court's Evaluation of the Evidence and Findings

The Court reviewed the record and endorsed the Commission’s view that doubt attended the propriety of the dismissal. The Court noted material circumstances supporting the Commission’s conclusion: a plausib

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