G.R. No. 188747 - Manila Water Co. vs. Del Rosario

Case Summary (G.R. No. 188747)

Key Dates

Employment with MWSS began: 22 October 1979. Absorption by Manila Water: 1 August 1997. Memorandum directing explanation: 23 June 2000. Formal investigation/hearing: 29 June 2000. Dismissal: 3 July 2000. Labor Arbiter decision: 30 May 2002. NLRC dismissal of appeal for lack of certification against forum shopping: 30 September 2003; motion for reconsideration denied: 28 April 2005. Court of Appeals decision reversing NLRC and affirming award (with modification): 31 March 2009; denial of reconsideration: 7 July 2009. Supreme Court decision: 29 January 2014.

Applicable Law and Constitutional Basis

Constitution: 1987 Philippine Constitution (applicable because decision date is 2014). Statutory provisions and rules: Article 282 (now Article 297, Labor Code) enumerating just causes for termination (serious misconduct; willful disobedience; gross and habitual neglect; fraud or willful breach of trust; commission of a crime against employer or family; analogous causes); Section 7, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code regarding termination and separation pay; prevailing jurisprudence on separation pay as compassionate/equitable relief (Philippine Long Distance Telephone Co. v. NLRC; Toyota Motor Phils. Corp. Workers Association v. NLRC; Tirazona v. Philippine EDS Techno-Service, Inc.; Daabay v. Coca‑Cola Bottlers; Central Pangasinan Electric Cooperative, Inc. v. NLRC), and procedural precedents regarding appeals and the limits of appellate relief (Unilever Philippines, Inc. v. Rivera; Aklan College, Inc. v. Enero).

Factual Background

Manila Water discovered the loss of 24 water meters in May 2000 and, after investigation, implicated Del Rosario and a co-employee. A 23 June 2000 memorandum required Del Rosario to explain within 72 hours. Del Rosario submitted a letter admitting his involvement and pleading for forgiveness. A formal hearing was conducted on 29 June 2000; the investigation found him responsible under Section 11.1 of the company’s Code of Conduct. Manila Water dismissed Del Rosario on 3 July 2000 for the misconduct.

Procedural History: Labor Arbiter and NLRC

Del Rosario filed for illegal dismissal. The Labor Arbiter, after weighing evidence, dismissed his complaint for lack of merit but nonetheless awarded separation pay equivalent to one-half month’s salary for every year of service (computed from 1 August 1997 to June 2000, total Php 118,062.00). Manila Water appealed to the NLRC, which dismissed the appeal for failure to append a certification against forum shopping (30 September 2003). Manila Water’s motion for reconsideration before the NLRC was denied (28 April 2005).

Court of Appeals Ruling

The Court of Appeals reversed the NLRC’s dismissal as a grave abuse of discretion for dismissing on a technicality. It reinstated the Labor Arbiter’s decision, subject to a modification on the computation period for separation pay (counted from 1 August 1997 to June 2000), and refused a motion for reconsideration.

Issue Presented to the Supreme Court

Whether the award of separation pay to Del Rosario was proper despite his dismissal for conduct amounting to serious misconduct (stealing company property), given the rule that employees dismissed for just causes under Article 282 are not entitled to separation pay, subject to narrow equitable exceptions.

Limits on Review: Finality of Certain Issues

The Supreme Court noted that the legality of the dismissal as adjudicated by the Labor Arbiter was not an open issue in this petition because Del Rosario did not appeal the Labor Arbiter’s dismissal ruling; he only benefited from the Labor Arbiter’s award of separation pay and did not seek reversal of that dismissal. Under settled appellate practice, a party who did not appeal cannot obtain affirmative relief beyond what was granted in the appealed decision; due process forbids awarding additional relief to parties who did not appeal.

Governing Principles on Separation Pay and Social Justice

The Court reiterated established precedent: separation pay as a measure of social justice (or equitable relief) is available only when a valid dismissal is for causes other than serious misconduct or those reflecting on moral character. Cases cited (PLDT v. NLRC; Toyota; Tirazona; Daabay; Central Pangasinan) establish that theft (an offense involving moral turpitude and breach of trust) constitutes serious misconduct and precludes entitlement to sepa

Case Syllabus (G.R. No. 188747)

Procedural Posture

Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules of Court, assailing the 31 March 2009 Decision of the Court of Appeals in CA-G.R. SP No. 92583 and the Court of Appeals Resolution of 7 July 2009 refusing reconsideration.
Case citation in the Supreme Court: G.R. No. 188747; decision rendered 29 January 2014; reported at 725 Phil. 513; Decision penned by Justice Perez.
Relief sought by petitioner Manila Water Company: reversal of the Court of Appeals' decision and resolution which affirmed award of separation pay to respondent Carlito Del Rosario.
Supreme Court disposition: petition GRANTED; the assailed Decision and Resolution of the Court of Appeals REVERSED and SET ASIDE.

Relevant Chronology of Events

22 October 1979: Del Rosario employed as Instrument Technician by Metropolitan Waterworks and Sewerage System (MWSS).
Sometime in 1996: MWSS reorganized pursuant to Republic Act No. 8041 and Executive Order No. 286; some employees absorbed by Manila Water.
1 August 1997: Del Rosario officially became an employee of Manila Water.
May 2000: Manila Water discovered 24 water meters missing from its stockroom; initial investigation implicated Del Rosario and co-employee Danilo Manguera in pilferage and sale to a company contractor.
23 June 2000: Manila Water issued Memorandum directing Del Rosario to explain in writing within 72 hours why he should not be dealt with administratively.
Del Rosario submitted a letter-explanation admitting involvement and pleading for forgiveness.
29 June 2000: Manila Water conducted a hearing; Del Rosario found responsible for loss and violating Section 11.1 of the Company’s Code of Conduct.
3 July 2000: Manila Water dismissed Del Rosario from employment.
30 May 2002: Labor Arbiter issued Decision dismissing Del Rosario’s illegal dismissal complaint for lack of merit but awarding separation pay.
30 September 2003: NLRC dismissed Manila Water’s appeal for failure to append a certification against forum shopping in its Memorandum of Appeal.
28 April 2005: NLRC denied Manila Water’s Motion for Reconsideration.
31 March 2009: Court of Appeals reversed NLRC Resolutions (finding grave abuse of discretion) and reinstated Labor Arbiter Decision, affirming award of separation pay with modification on computation period (from 1 August 1997 up to June 2000).
7 July 2009: Court of Appeals denied petition for reconsideration.
29 January 2014: Supreme Court decision granting Manila Water’s petition and reversing the Court of Appeals.

Factual Background (Employment and Misconduct Allegations)

Del Rosario’s employment origin: hired by MWSS on 22 October 1979; later absorbed by Manila Water after MWSS reorganization.
Allegation: 24 water meters missing from Manila Water stockroom; investigation implicated Del Rosario and another employee in pilferage and sale to a contractor.
Notice and investigation: memorandum dated 23 June 2000 required written explanation within 72 hours; Del Rosario’s written admission and plea for forgiveness; formal hearing on 29 June 2000 where he again admitted involvement.
Company rule breached: Section 11.1 of the Company’s Code of Conduct; Manila Water regarded the act as theft and a ground for dismissal.
Administrative sanction: termination effective 3 July 2000.

Labor Arbiter Proceedings and Ruling

Case filed by Del Rosario for illegal dismissal.
Position of Del Rosario: admission coerced and made without counsel; admission therefore should not be basis for termination; dismissal without valid cause.
Position of Manila Water: proof of involvement in taking and selling meters; confession in writing and during investigation; act punishable by dismissal under Company Code.
Labor Arbiter Decision dated 30 May 2002:
- Dismissed the illegal dismissal complaint for lack of merit (i.e., did not find dismissal illegal).
- Nonetheless ordered Manila Water to pay separation pay to Del Rosario equivalent to one-half (1/2) month’s salary for every year of service based on basic salary Php 11,244.00 at time of dismissal.
- Computation period stated as from 1 August 1997 up to June 2000; total amount awarded Php 118,062.00.

NLRC Action and Grounds for Dismissal of Appeal

NLRC Resolution dated 30 September 2003 dismissed Manila Water’s appeal for failure to append a certification against forum shopping in the Memorandum of Appeal.
Manila Water’s Motion for Reconsideration denied by NLRC in Resolution dated 28 April 2005.
Court of Appeals later found NLRC’s dismissal on technicality to be grave abuse of discretion.

Court of Appeals Disposition

Decision dated 31 March 2009:
- Reversed the NLRC’s Resolutions of 30 September 2003 and 28 April 2005 as grave abuse of discretion; set them aside.
- Reinstated the Labor Arbiter’s Decision granting separation pay to Del Rosario, subject to modification that computation of separation pay is counted from 1 August 1997 to June 2000.
- Held that Del Rosario’s 21 years of service withou