Distribution and Control Products Inc. Vs Santos

Distribution & Control Products Inc. vs.
Santos
GR No. 212616,
July 10, 2017
FACTS:
On July 2011, the respondent filed against herein petitioners a complaint for constructive illegal
dismissal and payment of separation pay.
Respondent’s contention:
- on December 16, 2010, he received a notice that he was being placed under preventive suspension
for thirty (30) days because he was one of the employees suspected of having participated in the
unlawful taking of circuit breakers and electrical products of petitioners.
Petitioner’s contentions:
-claimed that on February 19, 2010, petitioner corporation, through its hired auditors, conducted an
inventory and it was found out that a number of electrical materials and products with an estimated
value of P457,394.35, were missing; herein respondent and the company warehouseman were the
only persons who had complete access to the company warehouse as they were entrusted with the
handling of all products from the company's suppliers; considering the size and weight of the missing
items, they can only be carried by no less than two (2) persons; petitioners demanded an explanation
from respondent and the warehouseman, but they failed to make an account as to how these
products had gone missing from the warehouse and office building; as such, petitioners filed a criminal
complaint for qualified theft and, thereafter, they suspended herein respondent; and after the lapse of
his suspension, respondent no longer returned to work.
LA, the NLRC and the CA again uniformly ruled that respondent was dismissed sans procedural due
process. (the case did not elaborate on the reason)
ISSUE:
Wether or not Respondent was illegally dismissed.
RULING:
In determining whether an employee's dismissal had been legal, the inquiry focuses on whether the
dismissal violated his right to substantial and procedural due process.
The violation of either the substantial due process right or the procedural due process right of an
employee produces different results. Termination without a just or authorized cause renders the
dismissal invalid, and entitles the employee to reinstatement without loss of seniority rights and other
privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent
computed from the time the compensation was not paid up to the time of actual reinstatement.
An employee's removal for just or authorized cause but without complying with the proper procedure,
on the other hand, does not invalidate the dismissal. It obligates the erring employer to pay nominal
damages to the employee, as penalty for not complying with the procedural requirements of due
process. AIDSTE
[Substantive due process – Loss of trust and confidence; proof required]

In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just
and valid cause; failure to do so would necessarily mean that the dismissal was illegal. Moreover, the
quantum of proof required in determining the legality of an employee's dismissal is only substantial
evidence. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise.
Loss of trust and confidence is a just cause. However, in order for the employer to properly invoke this
ground, the employer must satisfy two conditions.
First, the employer must show that the employee concerned holds a position of trust and
confidence. Jurisprudence provides for TWO CLASSES OF POSITIONS OF TRUST. The first class
consists of managerial employees, or those who, by the nature of their position, are entrusted with
confidential and delicate matters and from whom greater fidelity to duty is correspondingly
expected. The second class includes "cashiers, auditors, property custodians, or those who, in the
normal and routine exercise of their functions, regularly handle significant amounts of [the
employer's] money or property."
Second, the employer must establish the existence of an act justifying the loss of trust and
confidence. To be a valid cause for dismissal, the act that betrays the employer's trust must be
real, i.e.,founded on clearly established facts, and the employee's breach of the trust must be
willful, i.e.,it was done intentionally, knowingly and purposely, without justifiable excuse. Moreover,
with respect to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal,
requires proof of involvement in the alleged events in question, and that mere uncorroborated
assertions and accusations by the employer will not be sufficient.
It is true that respondent may indeed be considered as one who occupies a position of trust and
confidence as he is one of those who were entrusted with the handling of a significant amount or
portion of petitioners' products for sale. However, even a quick perusal of the records at hand would
show that petitioners failed to present substantial evidence to support their allegations that respondent
had, in any way, participated in the theft of the company's stolen items and that after his preventive
suspension he no longer reported for work. In other words, petitioners were not able to establish the
existence of an act justifying their alleged loss of trust and confidence in respondent.
[Procedural due process –2 notices and hearing]

Procedural due process consists of the twin requirements of notice and hearing.
(1) The first written notice to be served on the employees should contain the
specific causes or grounds for termination against them, and a directive that the
employees are given the opportunity to submit their written explanation within a
reasonable period. "Reasonable opportunity" under the Omnibus Rules means every
kind of assistance that management must accord to the employees to enable them
to prepare adequately for their defense. This should be construed as a period of at
least five (5) calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or lawyer,
gather data and evidence, and decide on the defenses they will raise against the
complaint. Moreover, in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed narration of the facts
and circumstances that will serve as basis for the charge against the employees. A
general description of the charge will not suffice. Lastly, the notice should
specifically mention which company rules, if any, are violated and/or which among
the grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct
a hearing or conference wherein the employees will be given the opportunity to: (1)
explain and clarify their defenses to the charge against them; (2) present evidence in
support of their defenses; and (3) rebut the evidence presented against them by the
management. During the hearing or conference, the employees are given the
chance to defend themselves personally, with the assistance of a representative or
counsel of their choice. Moreover, this conference or hearing could be used by the
parties as an opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers
shall serve the employees a written notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been considered;
and (2) grounds have been established to justify the severance of their employment.
The only notice given by petitioners to respondent was the notice of his 30-day preventive suspension
and, as found by the LA, nothing therein indicated that he was required nor was given the opportunity
to explain his side, considering that he was being implicated in the theft of the subject circuit breakers
and other electrical products. It is true that petitioners conducted their own investigation but the same
was made without the participation of respondent.

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Distribution & Control Products Inc. vs.

[Substantive due process – Loss of trust and confidence; proof required]

[Procedural due process –2 notices and hearing]

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