G.R. No. 214399 - Puncia vs. Toyota Shaw/Pasig, Inc.

Case Summary (G.R. No. 214399)

Key Dates and Procedural Posture

Important procedural milestones include: appointment as Marketing Professional (March 2, 2011); Notice to Explain (October 15, 2011); scheduled hearing (October 17, 2011) which Puncia failed to attend but for which he submitted a letter; Notice of Termination (October 18, 2011); LA decision dismissing the complaint but awarding money claims (May 4, 2012); NLRC reversal finding illegal dismissal and ordering reinstatement and backwages (February 14, 2013); CA First Division annulling NLRC and reinstating LA decision (June 9, 2014) with denial of reconsideration (September 23, 2014); SC resolution denying the petition with modification (June 28, 2016).

Facts Relevant to Termination

Puncia was assigned a monthly sales quota initially of seven vehicles (March–June 2011) and then reduced to three vehicles for July and August 2011. From March through August 2011 he sold five vehicles out of 34 required. Toyota issued progressive disciplinary notices for attendance and timekeeping violations from 2006 to 2010. After failing the reduced quotas and receiving a Notice to Explain, Toyota scheduled a hearing which Puncia did not attend; Toyota then terminated him citing insubordination for failure to attend the hearing and to justify his absence.

Claims and Defenses

Puncia’s claims: illegal dismissal with prayer for reinstatement and backwages, unfair labor practice, damages, and attorney’s fees; allegation that dismissal was motivated by union activity and that the ground stated in the Notice of Termination (insubordination) differed from the Notice to Explain (failure to meet quota). Toyota’s defense: dismissal was for valid just cause (repeated failure to meet quota and persistent violations of company attendance/timekeeping rules), and procedural due process was observed.

Labor Arbiter’s Findings

The LA found Puncia’s complaint lacked merit and affirmed the dismissal for just cause, characterizing repeated failure to meet sales quotas and past attendance violations as gross inefficiency/gross neglect of duties. The LA nonetheless awarded Puncia unpaid money claims (commissions, 13th month pay for 2011, sick leave, vacation leave), because Toyota did not rebut entitlement to those monetary claims.

NLRC Ruling and Reasoning

The NLRC reversed the LA, declaring Puncia illegally dismissed and entitled to reinstatement and backwages. The NLRC concluded Toyota failed to satisfy procedural due process because: (1) the written notice (Intra-Company Communication) did not specify the grounds for dismissal with sufficient particularity to allow an adequate explanation; and (2) the ground relied upon in the Notice of Termination (unjustified absence during the scheduled hearing) differed from the ground in the Notice to Explain (failure to meet sales quota), depriving Puncia of the opportunity to defend against the actual ground for dismissal.

Court of Appeals Proceedings and Ruling

Two petitions were filed to the CA; one (CA-G.R. SP No. 132674) was initially dismissed by the CA-Eleventh Division on procedural grounds but later reinstated. The CA-First Division, in CA-G.R. SP No. 132615, annulled the NLRC decision and reinstated the LA decision, holding that Toyota presented substantial evidence of just cause (gross inefficiency/neglect of duty for repeated failure to meet sales quota) and that Puncia was afforded due process because he had submitted a written explanation within the prescribed period.

Issue Presented to the Supreme Court

The Supreme Court addressed two primary issues: (a) whether the CA-First Division correctly promulgated its June 9, 2014 decision without consolidating CA-G.R. SP No. 132615 with CA-G.R. SP No. 132674; and (b) whether Puncia’s dismissal was for just cause and complied with procedural due process.

SC Analysis on Consolidation

The Court reviewed the doctrine and rules governing consolidation (Rule 31, Section 1, Rules of Court; internal CA rules) and reiterated that consolidation is a procedural device for pending actions involving common questions of law or fact. The SC found no abuse in the CA-First Division’s action because CA-G.R. SP No. 132674 had been dismissed by the CA-Eleventh Division on November 29, 2013 and therefore was not pending at the time the CA-First Division promulgated its June 9, 2014 decision. Consolidation could not be ordered where one matter had been resolved and was not then pending; the CA acted within its discretion and jurisdiction in issuing its decision without consolidation.

SC Analysis on Substantive Due Process — Just Cause

On substantive due process, the SC applied the standards under the Labor Code (Articles 297–299, formerly 282–284) and relevant jurisprudence cited in the record. The Court found ample evidence that Puncia repeatedly failed to meet reasonable productivity standards: he sold only five vehicles out of 34 required over the relevant six-month period, despite a quota reduction as a leniency measure. The SC treated repeated failure to meet quota as gross inefficiency or gross neglect of duties — recognized just causes for dismissal — and referenced controlling precedents that permit termination for failure to attain work quotas or reasonable productivity standards.

SC Analysis on Procedural Due Process — Notice and Hearing

Although substantive grounds existed, the SC found a procedural due process defect. The Notice to Explain charged Puncia with failure to meet sales quotas (gross inefficiency), whereas the Notice of Termination invoked gross insubordination for failure to attend the scheduled hearing. Because Puncia was given the opportunity to explain and defend against the charge of gross inefficiency but was ultimately dismissed for a different charge (insubordination), his right to procedural due

Case Syllabus (G.R. No. 214399)

Facts

Petitioner Armando N. Puncia (Puncia) worked for respondent Toyota Shaw/Pasig, Inc. (Toyota) since 2004 initially as a messenger/collector and was later appointed on March 2, 2011 as a Marketing Professional with a monthly sales quota of seven (7) vehicles. (Rollo, pp. 35, 37)
Puncia failed to meet the seven-vehicle quota, selling only one vehicle in July and none in August 2011. (Rollo, p. 37)
Toyota lowered Puncia’s quota to three (3) vehicles for July and August 2011 as an act of leniency, yet he still failed to comply. (Rollo, pp. 36-37)
Over a six-month span Puncia sold five (5) vehicles out of thirty-four (34) required, a repeated failure to reach quotas which Toyota characterized as gross inefficiency. (Rollo, pp. 36-37)
Toyota sent Puncia a Notice to Explain dated October 15, 2011, requiring explanation for his failure to meet quota. (Rollo, p. 328)
Toyota scheduled a hearing for October 17, 2011 regarding the charge in the Notice to Explain; Puncia failed to appear at that hearing but submitted a letter-memorandum dated October 17, 2011 explaining his side. (Rollo, pp. 198, 37)
On October 18, 2011, Toyota served a Notice of Termination dismissing Puncia for insubordination due to his failure to attend the scheduled hearing and justify his absence. (Rollo, p. 199)
Puncia filed a complaint for illegal dismissal with prayers for reinstatement and backwages, unfair labor practice, damages, and attorney’s fees, alleging among other things that his dismissal was retaliatory after Toyota discovered his union directorship and that the stated ground in the Notice of Termination (insubordination) differed from the ground in the Notice to Explain (failure to meet quota). (Rollo, pp. 85-87)

Labor Arbiter (LA) Decision and Findings

In a Decision dated May 4, 2012, the Labor Arbiter dismissed Puncia’s complaint for lack of merit, finding that Puncia was validly dismissed for just cause. (Rollo, pp. 58-65)
The LA concluded the dismissal was not due to union involvement but for just cause arising from inefficiency manifested by repeated violations of attendance rules (2006–2010) and failure to meet monthly quota. (Rollo, pp. 61-63)
Despite dismissing the complaint, the LA awarded Puncia money claims—earned commissions, 13th month pay for 2011, sick leave and vacation leave benefits—because Toyota failed to deny or rebut his entitlement to such claims. (Rollo, pp. 64-65)
Puncia appealed the LA decision to the NLRC via Memorandum of Appeal dated June 13, 2012. (Rollo, pp. 66-82)

NLRC Decision and Findings

The National Labor Relations Commission (NLRC) in a Decision dated February 14, 2013 reversed the LA ruling, declared Puncia illegally dismissed, and ordered reinstatement and backwages. (Rollo, pp. 84-97)
The NLRC held there were no valid grounds to justify termination and found procedural defects in Toyota’s actions: (a) the written notice (Intra-Company Communication providing company rules) did not categorically indicate the specific ground for dismissal or explain that the deficiency merited dismissal; and (b) the ground in the Notice to Explain (failure to meet sales quota) differed from the ground in the Notice of Termination (unjustified absence at hearing), depriving Puncia of a reasonable opportunity to explain the precise charge against him. (Rollo, pp. 90-94)
Motions for reconsideration by the parties were denied in an NLRC Resolution dated August 30, 2013. (Rollo, pp. 100-108)

Court of Appeals Proceedings (Two Dockets and Consolidation Issues)

Toyota filed a petition for certiorari before the Court of Appeals (CA) docketed as CA-G.R. SP No. 132615 (filed October 19, 2013). (Rollo, pp. 376-411)
Puncia filed his own petition for certiorari before the CA docketed as CA-G.R. SP No. 132674 (filed November 13, 2013). (Rollo, pp. 416-437)
The CA-Eleventh Division dismissed CA-G.R. SP No. 132674 outright on procedural grounds in a Resolution dated November 29, 2013. (Rollo, p. 439)
Puncia moved for consolidation of the dismissed CA-G.R. SP No. 132674 with CA-G.R. SP No. 132615 by filing an Omnibus Motion (Dec. 26, 2013) and a Supplement (Dec. 27, 2013). (Rollo, pp. 255-265, 344-345)
The CA-First Division denied consolidation in a Resolution dated January 24, 2014 on the ground that CA-G.R. SP No. 132674 had already been dismissed and thus could not be consolidated with CA-G.R. SP No. 132615. (Rollo, p. 440)
On June 9, 2014, the CA-First Division promulgated a Decision in CA-G.R. SP No. 132615 annulling and setting aside the NLRC decision and reinstating the LA Decision, holding Toyota established just cause (gross inefficiency) and complied with due process because Puncia submitted a written explanation within the period given. (Rollo, pp. 34-45, esp. pp. 41-45)
Puncia filed a motion for reconsideration to the CA-First Division dated June 23, 2014, which was denied in a Resolution dated September 23, 2014. (Rollo, pp. 454-459; 48-49)
Separately, the CA-Eleventh Division reconsidered its dismissal and reinstated CA-G.R. SP No. 132674 in a Resolution dated July 22, 2014 and ordered Toyota to file its comment. (Rollo, pp. 496-497)

Issues Presented to the Supreme Court

Whether the CA-First Division correctly promulgated its June 9, 2014 Decision in CA-G.R. SP No. 132615 without consolidating it with CA-G.R. SP No. 132674. (Rollo, pp. 10-30)
Whether Puncia was dismissed from employment for just cause. (Rollo, pp. 10-30)

Legal Standards and Authorities Cited

Consolidation under Rule 31, Section 1 of the Rules of Court is a procedural device permitting joint hearing/trial of actions involving common questions of law or fact to avoid unnecessary costs or delay; it is proper where cases involve common questions of law, related facts, or same parties and where actions are pending. (Rollo, citing Rule 31, Sec. 1 and jurisprudence)
Consolidation must involve actions that are pending; a matter already resolved and final cannot be consolidated, per Honoridez v. Mahinay (504 Phil. 204 (2005)). (Rollo, pp. 59)
The Court’s consolidation decisions rest on sound discretion and will not be disturbed absent manifest abuse tantamount to evasion of a duty. (Rollo, citing Deutsche Bank AG v. CA and Domdom v. Sandiganbayan)
Substantive and procedural due process are required for valid dismissal: substantive due process requires dismissal be for just or authori