Century Textile Mills, Inc. vs. NLRC

The twin requirements of notice and hearing in employee dismissal are rights personal to the employee; consultation with or consent of the labor union is not a substitute for their observance, and the employer bears the burden of proving a just cause for termination. A finding of an employee's participation in a criminal conspiracy cannot rest solely on the unilateral declaration of a confirmed co-conspirator, and relief warranted by the facts alleged and proved may be granted even if not specifically prayed for in the complaint.

Century Textile Mills, Inc., through its President and General Manager Alfredo T. Escaño, operated a textile factory where private respondent Eduardo Calangi had been employed since 13 December 1974, first as an apprentice and later as a machine operator in the Finishing Department. Melchor Meliton and Antonio Santos were Calangi's supervisors at the workplace. The dispute implicated the statutory and regulatory framework governing termination of employment under the Labor Code and its implementing rules, which require that an employer furnish the worker a written notice of the causes for termination and afford him ample opportunity to be heard and to defend himself.

Since 13 December 1974, Eduardo Calangi had been employed at the factory of Century Textile Mills, Inc., working initially as an apprentice and later as a machine operator in the Finishing Department. Melchor Meliton and Antonio Santos were among his supervisors at the workplace, and Calangi and a co-worker, "Gatchie" Torrena, had been suspended from work several times at the instance of these two supervisors.

At around 12:15 a.m. on 4 June 1983, within company premises, Rodolfo Marin, a factory co-worker, chanced upon Torrena mixing some substance into the drinking water contained in a pitcher from which Meliton and Santos regularly drank. Before anyone could drink from the pitcher, Marin reported what he had observed to Meliton, who in turn informed Santos. The two supervisors took possession of the pitcher and filed a formal report of the incident with company management. The contents of the pitcher were brought to and analyzed by chemists at the Philippine Constabulary Crime Laboratory at Camp Crame, Quezon City, who found the presence of formaldehyde, a toxic chemical.

In the police investigation that followed, Torrena confessed that Calangi had personally instructed him, and that he had agreed, to place formaldehyde in the pitcher of water. Torrena also admitted that he and Calangi were then motivated by a desire to avenge themselves upon Meliton and Santos, both of whom had instigated their suspensions from work several times in the past. These circumstances moved the Corporation to preventively suspend Torrena and Calangi effective 10 June 1983 and eventually to dismiss them from its employ; criminal charges for attempted murder were likewise filed against the two employees with the Office of the Provincial Fiscal of Rizal. The Memorandum issued by the Corporation's Personnel Manager on 10 June 1983 advised all concerned that the two employees were under preventive suspension (indefinite), citing Policy Instruction No. 10 of the New Labor Code of the Philippines, Revised Edition 1982, and noting that the decision about the suspension was reached after a meeting between the union and management. On 27 July 1983, the Corporation completely terminated Calangi's services.

On 11 October 1983, Calangi filed a Complaint for illegal dismissal, docketed as Case No. NLRC-NCR-10-4518-83, with the Arbitration Branch, National Capital Region, of the then Ministry of Labor and Employment. He alleged that prior to his preventive suspension, neither the company nor any of its officers had furnished him a copy of the charges, if any, nor afforded him the opportunity to answer the same and defend himself. He claimed moral damages of P50,000.00; actual damages consisting of wages for three years (P6,520.80), ECOLA for three years (P3,841.60), 13th month pay for three years (P903.60), and vacation and sick leave of 15 days each (P627.00), or P11,893.00 in all; exemplary damages of P25,000.00; and attorney's fees of P17,398.60, for a total of P104,291.60, plus a prayer for such other reliefs and remedies consequent upon the premises.

The Labor Arbiter found that the evidence against Calangi was "so overwhelming" and "sufficient enough" to justify his dismissal, and that Calangi had himself failed inexplicably to deny or controvert the charges against him. The National Labor Relations Commission, on the other hand, found that Calangi had been effectively denied his right to due process because, prior to his preventive suspension and the termination of his services, he had not been given the opportunity either to affirm or refute the charges proffered against him. The record contained no indication that a hearing or other gathering had been held at which Calangi was given a reasonable opportunity to confront his accuser and defend against the charges; neither the Corporation nor the labor union had advised Calangi of the matters at issue, and practically everyone involved in the incident except Calangi had been interrogated by the Cainta police authorities. The criminal complaint for attempted murder against Calangi was eventually dismissed by the Provincial Fiscal of Rizal.

• Prior Investigation and Union Consultation: Petitioners contended that the Memorandum dated 10 June 1983 issued by the Personnel Manager "clearly shows that prior investigation and consultation with the union was made," which would negate the claim that Calangi was not afforded the chance to present his side, the memorandum itself supposedly speaking otherwise.
• Company Investigation: Petitioners argued that the decision to place Calangi under preventive suspension and subsequently to terminate his services was arrived at only after the incident complained of, and Calangi, had been investigated by the company.
• Sufficiency of Evidence: Petitioners maintained that the evidence against Calangi was overwhelming and sufficient to justify his dismissal.
• Relief Not Prayed For: Petitioners argued that the Corporation could not be ordered to reinstate Calangi with full backwages and without loss of seniority rights and other benefits because such relief had not been sought in his complaint, and that it could not be ordered to pay actual damages in excess of what he had claimed.

• Denial of Due Process: Private respondent Calangi alleged in his complaint that prior to his preventive suspension, neither the company nor any of its officers had furnished him a copy of the charges, if any, nor afforded him the opportunity to answer the same and defend himself.

• Illegal Dismissal: Whether private respondent Calangi was illegally dismissed from his job as machine operator.
• Reinstatement and Backwages Not Prayed For: Whether, assuming illegal dismissal, petitioner Corporation may be ordered to reinstate Calangi to his former position with full backwages and without loss of seniority rights and other benefits, considering that such relief had not been sought in his complaint.
• Actual Damages in Excess of Claim: Whether, assuming illegal dismissal, petitioner Corporation may be ordered to pay Calangi actual damages in excess of what he had claimed in his complaint.

• Illegal Dismissal: Yes. Calangi was dismissed without just cause, the employer having failed to observe the twin requirements of notice and hearing and having failed to discharge its burden of proving a valid ground for termination under Article 278 of the Labor Code and its implementing rules.
• Reinstatement and Backwages Not Prayed For: Yes, but modified. Reinstatement and backwages are the normal consequences of illegal dismissal and may be awarded even if not prayed for, since the employee is entitled to such relief as the facts alleged and proved warrant; however, reinstatement was replaced by separation pay because it would not serve the best interests of the parties.
• Actual Damages in Excess of Claim: Yes, in effect. Backwages for three years, without qualification or deduction, are due as a matter of right upon a finding of illegal dismissal, the relief being measured by the facts alleged and proved rather than by the amount claimed in the complaint.

• Illegal Dismissal: The procedure an employer must follow before terminating an employee is set out in Article 278 of the Labor Code, which requires the employer to furnish the worker a written notice containing a statement of the causes for termination and to afford him ample opportunity to be heard and to defend himself with the assistance of his representative, in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Rule XIV, Book V of the Rules and Regulations Implementing the Labor Code reiterates these requirements: Section 2 requires a written notice stating the particular acts or omissions constituting the grounds for dismissal; Section 5 requires that the worker be afforded ample opportunity to be heard and to defend himself; and Section 6 requires the employer to notify the worker in writing of the decision to dismiss, stating clearly the reasons therefor. The twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal — notice to inform the employee of the employer's intent to dismiss and the reason therefor, and hearing to afford him an opportunity to answer the charges and defend himself before dismissal is effected. Neither requirement can be dispensed with without running afoul of the due process requirement of the 1987 Constitution. The record was bereft of any indication that a hearing or other gathering was in fact held where Calangi was given a reasonable opportunity to confront his accuser and to defend against the charges. The Corporation's "prior consultation" with the labor union was legally insufficient, since neither the Corporation nor the union actually advised Calangi of the matters at issue, and the Personnel Manager's Memorandum offered no helpful particulars. The rights to be informed beforehand of the proposed dismissal and its reasons, and to be afforded an adequate opportunity to defend oneself, are personal to the employee; consultation with or consent of the union was not a substitute for their observance, and the union could not waive them for him. Calangi's silence was not adequate to show an effective waiver, since notice and opportunity to be heard must be accorded even though the employee does not affirmatively demand them. As to the charge itself, the application for clearance to suspend or terminate cited as ground Calangi's "frustrated plan to poison Mr. Antonio Santos and Mr. Melchor Meliton last June 5, 1983," anchored mainly, if not wholly, on Torrena's sworn statement that he and Calangi had conspired to inflict physical harm on the two supervisors. A finding of participation in a criminal conspiracy cannot rest solely on the unilateral declaration of a confirmed co-conspirator; such declaration must be corroborated by other competent and convincing evidence and, in the absence thereof, must be received with considerable caution. The very least the Corporation should have done was to confront Calangi with Torrena's sworn statement, which the record does not show it did. The burden of showing the existence of a just cause for terminating Calangi's services lay on the petitioners, and they did not discharge that burden. The criminal complaint for attempted murder against Calangi was likewise dismissed by the Provincial Fiscal of Rizal.

• Reinstatement and Backwages Not Prayed For: Article 280 of the Labor Code, as amended, provides that in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by law, and that an employee unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and to his backwages computed from the time his compensation was withheld up to the time of his reinstatement. Both reinstatement, without loss of seniority rights, and payment of backwages are the normal consequences of a finding that an employee has been illegally dismissed, and these remedies together make the dismissed employee whole. A finding of illegal dismissal having been correctly made by the public respondent Commission, Calangi is, as a matter of right, entitled to receive both types of relief made available in Article 280. It matters not that Calangi had omitted in his complaint a claim for reinstatement without loss of seniority rights, for he is entitled to such relief as the facts alleged and proved warrant, consistent with Baguioro vs. Barrios and Tupas Vda. de Atas, Aguilar vs. Rubiato and Gonzales Vila, and Rosales vs. Reyes and Ordoveza.

• Actual Damages in Excess of Claim: In view of the finding of illegal dismissal, the Corporation is liable to Calangi for payment of the latter's backwages for three (3) years, without qualification and deduction. Considering the circumstances of the case, however, reinstatement of Calangi to his former position — or to any other equivalent position in the company — would not serve the best interests of the parties involved. The Corporation should not be compelled to take back in its fold an employee who, at least in the minds of his employers, poses a significant threat to the lives and safety of company workers. Accordingly, Calangi should be given his separation pay in lieu of reinstatement, equal to one-half (1/2) month's salary for every year of service, computed from 13 December 1974 (date of first employment) until 10 June 1986 (three years after date of illegal dismissal). The amount of separation pay includes allowances regularly paid by the employer, consistent with Manila Midtown Commercial Corporation vs. NUWHRAIN and Santos vs. National Labor Relations Commission.

• Twin Requirements of Notice and Hearing in Employee Dismissal — The employer must furnish the worker a written notice stating the particular acts or omissions constituting the grounds for dismissal and must afford him ample opportunity to be heard and to defend himself with the assistance of his representative. Both requirements are essential elements of due process in cases of employee dismissal: notice informs the employee of the employer's intent to dismiss and the reason therefor, while hearing affords him an opportunity to answer the charges and defend himself before dismissal is effected. Neither can be dispensed with without running afoul of the due process requirement of the 1987 Constitution. In this case, the record showed no hearing or gathering at which Calangi was given a reasonable opportunity to confront his accuser and defend himself, and the employer's failure to observe the requirement rendered the dismissal illegal.

• Due Process Rights in Dismissal Are Personal to the Employee — The rights of an employee whose services are sought to be terminated to be informed beforehand of his proposed dismissal or suspension and of the reasons therefor, and to be afforded an adequate opportunity to defend himself from the charges, are rights personal to the employee. Consultation with or consent of the labor union is not a substitute for actual observance of those rights, and the union cannot waive them for the employee. Silence or failure to affirmatively demand them does not amount to an effective waiver, since notice and opportunity to be heard must be accorded by an employer even though the employee does not demand them. The Court applied this doctrine in rejecting the employer's reliance on its "prior consultation" with the labor union and on Calangi's silence.

• Burden of Proof on the Employer in Termination Cases — The burden of proving that the termination was for a valid or authorized cause rests on the employer. In this case, the employer failed to discharge that burden, as the record contained no evidence that Calangi had been notified, investigated, or heard, and the only evidence linking him to the alleged plot was the uncorroborated statement of a co-conspirator.

• Uncorroborated Confession of a Co-Conspirator — A finding of an employee's participation in an alleged criminal conspiracy cannot be made to rest solely on the unilateral declaration of a confirmed co-conspirator. Such a declaration must be corroborated by other competent and convincing evidence; in the absence of such other evidence, the confession implicating another must be received with considerable caution. The Court applied this doctrine in holding that Torrena's sworn statement, standing alone, could not justify Calangi's dismissal, especially since the employer never confronted Calangi with that statement.

• Relief Warranted by Facts Alleged and Proved — A party is entitled to such relief as the facts alleged and proved warrant, even if the specific relief was not prayed for in the complaint. Thus, reinstatement without loss of seniority rights and backwages may be awarded upon a finding of illegal dismissal despite their omission from the complaint, since these are the normal consequences of illegal dismissal and accrue as a matter of right under Article 280 of the Labor Code.

• Separation Pay in Lieu of Reinstatement — Where reinstatement would not serve the best interests of the parties — as where the employee, at least in the minds of his employers, poses a significant threat to the lives and safety of company workers — the employer should not be compelled to take the employee back, and separation pay may be awarded in lieu of reinstatement. The separation pay is equivalent to one-half (1/2) month's salary for every year of service, computed from the date of first employment until three years after the date of illegal dismissal, and includes allowances regularly paid by the employer.

• "The twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal: the requirement of notice is intended to inform the employee concerned of the employer's intent to dismiss and the reason for the proposed dismissal; upon the other hand, the requirement of hearing affords the employee an opportunity to answer his employer's charges against him and accordingly to defend himself therefrom before dismissal is effected. Neither of these two requirements can be dispensed with without running afoul of the due process requirement of the 1987 Constitution." — This passage states the ratio decidendi on the due process requirements in dismissal and is the canonical formulation of the twin notice-and-hearing rule applied to invalidate Calangi's termination.

• "The employee can waive those rights, if he so chooses, but the union cannot waive them for him. That the private respondent simply 'kept silent' all the while, is not adequate to show an effective waiver of his rights. Notice and opportunity to be heard must be accorded by an employer even though the employee does not affirmatively demand them." — This passage establishes that due process rights in dismissal are personal to the employee and cannot be waived by the labor union, and that silence does not amount to an effective waiver — a doctrine frequently cited in subsequent labor jurisprudence.

• "A finding of private respondent's participation in the alleged criminal conspiracy cannot, however, be made to rest solely on the unilateral declaration of Mr. Torrena himself a confirmed 'co-conspirator.' Such declaration must be corroborated by other competent and convincing evidence. In the absence of such other evidence, Mr. Torrena's 'confession' implicating Mr. Calangi must be received with considerable caution." — This passage defines the evidentiary standard for proving an employee's participation in a conspiracy based on a co-conspirator's confession and explains why the employer failed to discharge its burden of proving a just cause.

• "It matters not that private respondent Calangi had omitted in his complaint filed in Case No. NLRC-NCR-10-4518-83 a claim for reinstatement without loss of seniority rights for he is entitled to such relief as the facts alleged and proved warrant." — This passage articulates the rule that relief warranted by the facts alleged and proved may be granted despite its omission from the complaint, supporting the award of reinstatement and backwages as matters of right under Article 280 of the Labor Code.

• Santos vs. National Labor Relations Commission, G.R. No. 76721 [21 September 1987] — Cited twice: first, for the rule that both reinstatement without loss of seniority rights and payment of backwages are the normal consequences of a finding of illegal dismissal, and that these remedies together make the dismissed employee whole; and second, for the rule that the amount of separation pay includes allowances regularly paid by the employer.
• Alzosa vs. National Labor Relations Commission, 120 SCRA 611 [1983] — Cited for the same rule that reinstatement and backwages are the normal consequences of illegal dismissal.
• Baguioro vs. Barrios and Tupas Vda. de Atas, 77 Phil. 120 [1946] — Cited for the rule that a party is entitled to such relief as the facts alleged and proved warrant, even if not specifically prayed for.
• Aguilar vs. Rubiato and Gonzales Vila, 40 Phil. 570 [1919] — Cited for the same rule on relief warranted by the facts alleged and proved.
• Rosales vs. Reyes and Ordoveza, 25 Phil. 495 [1913] — Cited for the same rule on relief warranted by the facts alleged and proved.
• Manila Midtown Commercial Corporation vs. NUWHRAIN, G.R. No. 75510 [27 October 1987] — Cited for the rule that the amount of separation pay includes allowances regularly paid by the employer.

• Article 278, Labor Code — The provision on miscellaneous matters requires the employer to furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and to afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative, in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. It also provides that the burden of proving that the termination was for a valid or authorized cause rests on the employer. The Court applied this provision in holding that the employer failed to observe the required notice and hearing and failed to discharge its burden of proof.
• Rule XIV, Book V, Rules and Regulations Implementing the Labor Code, Section 2 (Notice of dismissal) — Requires any employer who seeks to dismiss a worker to furnish him a written notice stating the particular acts or omissions constituting the grounds for dismissal. The Court cited this in finding that no such notice was shown to have been given to Calangi.
• Rule XIV, Book V, Rules and Regulations Implementing the Labor Code, Section 5 (Answer and hearing) — Provides that the worker may answer the allegations stated against him in the notice of dismissal within a reasonable period from receipt of such notice, and that the employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires. The Court cited this in finding that no hearing was held.
• Rule XIV, Book V, Rules and Regulations Implementing the Labor Code, Section 6 (Decision to dismiss) — Requires the employer to immediately notify a worker in writing of a decision to dismiss him, stating clearly the reasons therefor. The Court cited this in finding that the required notice of the decision was not shown to have been given.
• Article 280, Labor Code, as amended (Security of Tenure) — Provides that in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by law, and that an employee unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and to his backwages computed from the time his compensation was withheld up to the time of his reinstatement. The Court applied this provision in awarding Calangi three years' backwages and separation pay in lieu of reinstatement.
• 1987 Constitution (due process requirement) — The Court held that neither the notice nor the hearing requirement in employee dismissal can be dispensed with without running afoul of the due process requirement of the 1987 Constitution.

Fernan (Chairman), Gutierrez, Jr., Bidin, and Cortes, JJ.