Title
Oasay vs. Palacio Del Gobernador Condominium Corporation
Case
G.R. No. 194306
Decision Date
Feb 6, 2012
Petitioner challenged his dismissal by PDGCC for receiving unauthorized compensation. The CA upheld the dismissal, finding it valid based on breach of trust and lack of authorization from PDGCC.
dismissal
labor relations
unjust dismissal

Case Summary (G.R. No. 194306)

Factual Background: Additional Compensation from COMELEC

In a Memorandum dated September 27, 2005, Cruz required Oasay to submit a written report on the allowances and other compensation Oasay received in relation to his duties as Building Administrator from the government offices housed in the condominium. The record showed that Oasay had earned additional income for services rendered for COMELEC. On October 3, 2005, Oasay submitted his written report, admitting that he received additional compensation from COMELEC for services rendered after regular working hours and on Saturdays, Sundays, and holidays. He explained that COMELEC had caused the rehabilitation of the eighth floor of the condominium and that he was tasked, for stated compensation, to supervise and monitor the rehabilitation.

PDGCC’s Board of Directors referred the report to Atty. Alberto A. Bernardo, described as Assistant Secretary for Internal Audit, Office of the President, and a PDGCC board member, for study. Atty. Bernardo later opined that the services Oasay performed for COMELEC were related to duties that Oasay actually performed pursuant to his functions as Building Administrator. Atty. Bernardo further stated that, in rendering those services, Oasay acted with evident bad faith because he did not seek PDGCC’s permission nor inform COMELEC that he lacked authorization from PDGCC to do so.

Factual Background: Alleged Irregularities in Security Services Contracting

Separate from the COMELEC compensation issue, Cruz sent Oasay a letter dated December 9, 2005 requiring him to explain why he allowed EGB Security Investigation and General Services, Inc. to render services to the condominium despite the company’s alleged lack of license to operate as a security agency. Oasay responded on January 12, 2006, denying liability by asserting that he had no power to award contracts and that contract awards were the function of PDGCC’s Bids and Awards Committee.

In a letter dated February 16, 2006, after investigating the allegations, Atty. Bernardo recommended the filing of appropriate charges against Oasay for alleged violations of Republic Act No. 3019 and Republic Act No. 6713. Atty. Bernardo’s attached detailed outline report specified the acts that, according to the recommendation, justified filing charges. With respect to the security agency, Atty. Bernardo found that, as a member of the BAC, Oasay maneuvered the bidding process for security services to favor the EGB agency, which supposedly lacked the necessary license to operate. It was further found that the petitioner’s actions evidenced willful breach sufficient to support PDGCC’s position that it had lost trust and confidence in him.

PDGCC’s Decision to Replace the Building Administrator

Oasay requested early retirement in letters dated March 16, 2006 and May 10, 2006, in view of PDGCC’s decision to hand over the administration of the condominium to the Bureau of Treasury. Ultimately, on October 28, 2006, Cruz issued a memorandum informing Oasay that the PDGCC Board of Directors found his answers unsatisfactory and that the Bureau of Treasury was being appointed as the new Building Administrator. Cruz directed Oasay to turn over all of his accountabilities to PDGCC, which Oasay acknowledged in his letter dated November 17, 2006.

Labor Proceedings: Complaint for Constructive Dismissal

On January 23, 2007, Oasay filed a Complaint for constructive dismissal before the arbitration branch of the National Labor Relations Commission (NLRC) in Quezon City against PDGCC and Cruz. He sought service incentive leave pay, retirement benefits, PERA differential, and performance and incentive bonuses on important projects, plus damages.

PDGCC disputed Oasay’s status as a regular employee and claimed that, as Building Administrator, he served on a yearly basis depending on the PDGCC Board’s discretion. Assuming regular employment, PDGCC argued that Oasay was not illegally dismissed because termination had just cause, specifically loss of trust and confidence arising from his receipt of unlawful additional compensation for work rendered without PDGCC’s authority.

Findings of the Labor Arbiter and the NLRC

On November 12, 2007, the Labor Arbiter (LA) dismissed Oasay’s complaint. The LA found substantial evidence that Oasay breached PDGCC’s trust and confidence. On appeal, the NLRC rendered a Decision dated June 2, 2008 upholding the LA’s findings. Despite upholding dismissal, the NLRC invoked equity and awarded Oasay separation pay equivalent to one and a half (1 1/2) months pay for every year of service. Both parties later sought reconsideration and partial reconsideration. In a Resolution dated December 23, 2008, the NLRC denied the motions.

Consequently, both Oasay and PDGCC filed petitions for certiorari with the Court of Appeals (CA). Oasay challenged the validity of his dismissal, while PDGCC challenged the award of separation pay.

Ruling of the Court of Appeals

On August 27, 2010, the CA issued the assailed Decision in CA-G.R. SP No. 107843. The CA dismissed Oasay’s petition for certiorari for lack of merit and granted PDGCC’s prayer regarding separation pay. The CA reversed and set aside the NLRC rulings insofar as they awarded separation pay, and it entered a new judgment finding Oasay’s dismissal valid and for just cause and without entitlement to separation pay. The CA’s reasoning emphasized that PDGCC had a valid ground for dismissal.

The CA held that Oasay’s services for COMELEC were within the scope of his duties as Building Administrator. It reasoned that by extending his hours and rendering duties within the scope of his work for a fee without PDGCC’s consent, Oasay abused his position and contracted services to the condominium’s occupants to PDGCC’s detriment. It also characterized his conduct as maliciously using his position for personal gain and misusing PDGCC’s name and goodwill by rendering fee-based services under the guise of being authorized when PDGCC had not given prior consent.

As to the security agency issue, the CA held that after an investigation uncovered Oasay, in connivance with other BAC members, violated standard bidding procedures by allowing employment and retention of EGB Security Agency despite disqualification, and by paying the security guards from PDGCC funds, these circumstances were sufficient reasons for PDGCC to breed mistrust and doubt his trustworthiness. The CA also noted that the results of the investigation prompted PDGCC to file criminal and administrative charges against Oasay. On October 29, 2010, the CA denied Oasay’s motion for reconsideration in a Resolution.

Parties’ Arguments in the Supreme Court

Oasay elevated the matter to the Supreme Court through a petition for review on certiorari under Rule 45, arguing that: first, he did not violate PDGCC’s trust and confidence; second, his right to procedural due process was violated; and third, he was illegally dismissed and therefore entitled to the benefits and monetary awards granted to illegally dismissed employees.

PDGCC, in its Comment, maintained that Oasay was not a regular employee and that dismissal was for just cause and part of management prerogative.

Issues and the Court’s Treatment of Questions of Fact

The Supreme Court treated as the crux the validity of Oasay’s termination. It underscored that, under Rule 45, the petition was limited to questions of law, not questions of fact. The Court reiterated that it is not a trier of facts and that factual findings of quasi-judicial bodies such as the NLRC, when supported by substantial evidence and affirmed by the CA, receive respect and finality. The Court found no reason to depart from these settled rules.

Nevertheless, the Court held that even disregarding the procedural limitation on review, the petition would still fail because the CA did not commit reversible error. It then proceeded to analyze both the procedural and substantive requirements for lawful dismissal.

Legal Basis and Reasoning: Substantive Cause Under the Labor Code

The Supreme Court explained that the validity of an employee’s dismissal depends on satisfaction of two substantive requirements for a lawful termination: procedural due process—the opportunity to be heard and to defend himself—and a dismissal for a cause provided under the Labor Code. For the substantive aspect, the Court found that PDGCC terminated Oasay for a cause provided in Article 282 of the Labor Code, particularly fraud or willful breach of the trust reposed in him, since PDGCC invoked loss of trust and confidence.

The Court reiterated the doctrine that loss of trust and confidence requires: (first) that the employee holds a position of trust and confidence, and (second) that there is an act that would justify loss of trust and confidence. It stressed that valid loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. It also stated that proof beyond reasonable doubt was not necessary.

Applying these requirements, the Court held that Oasay held a position of trust and confidence because the Building Administrator position was managerial in nature and thus necessarily enjoyed the employer’s trust and confidence. It then held that PDGCC established, through clear and convincing evidence, acts justifying loss of trust and confidence.

The Court adopted the LA’s observations: Oasay’s admission that he received remuneration from COMELEC, whose office was housed in PDGCC’s condominium, supported termination. The Court reasoned that Oasay could not claim that he rendered services to COMELEC only after office hours because his building administrator functions would necessarily favor COMELEC during regular hours. It further held that as Building Administrator, his active vigilance in reporting and informing PDGCC about the expired license and revoked registration of the EGB security agency was his duty. Instead of informing PDGCC, the Court fou

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