Chua vs. NLRC

A validly dismissed employee is not entitled to separation pay, financial assistance, or any similar award where the cause of dismissal is serious misconduct or an offense reflecting adversely on the employee's moral character. The dismissal of a criminal complaint for insufficiency of evidence does not preclude a finding by administrative authorities of just or authorized cause for termination, because the quantum of evidence required in criminal cases differs from that required in labor cases.

Petitioner Benito D. Chua was a member of the Union of Filipro Employees, which had an existing collective bargaining relationship with private respondent Nestle Philippines, Inc. The union declared a strike against the company on 10 September 1987. The strike was subsequently declared illegal in two decisions of the National Labor Relations Commission, which were affirmed by the Supreme Court. The Labor Code, specifically Article 264(e), prohibits any person engaged in picketing from obstructing free ingress to or egress from the employer's premises for lawful purposes.

On 10 September 1987, the Union of Filipro Employees, of which petitioner Benito D. Chua was a member, declared a strike against the private respondent company, Nestle Philippines, Inc. During the strike, several of the striking employees threw stones at the trucks entering and leaving the company premises. One truck, whose driver was rendered unconscious by a stone hitting him on the head, rammed a private vehicle and crashed into a beauty parlor, resulting in the death of three persons and extensive damage to private property.

A criminal complaint for multiple murder and frustrated murder was filed against petitioner and several other employees who were believed to be responsible for the stoning incident. The criminal complaint was dismissed for insufficiency of evidence. The strike itself was, however, declared illegal in two decisions of the National Labor Relations Commission, which were affirmed by the Supreme Court.

On 17 December 1987, the union and its striking members offered to return to work and were readmitted by the company except sixty-nine union officers and thirty-three union members, including petitioner. Subsequently, the union's counsel wrote to the private respondent requesting the reinstatement of five employees, including petitioner. The request was denied. On 5 February 1988, petitioner received a notice of dismissal from private respondent for having participated in the illegal strike.

Two days later, petitioner initiated a complaint for illegal dismissal against private respondent company. The Labor Arbiter found that petitioner had been validly dismissed, relying on the testimony of Mr. Maniego, Personnel Supervisor of the Cabuyao Plant, who positively saw and identified petitioner as one of the union members who actively participated and manned the barricades during the strike. Mr. Maniego testified that he was not able to report to work because of the presence of the barricade. The Labor Arbiter nevertheless awarded petitioner "financial assistance" in the form of backwages from the time of his dismissal in the amount of P75,920.00, plus separation pay equivalent to one-half month salary for every year of service in the amount of P13,376.00. Petitioner appealed to the NLRC, which affirmed in toto the decision of the Labor Arbiter.

• Lack of Substantial Evidence: Petitioner argued that no substantial evidence exists on record to support the findings of the NLRC, and that the NLRC committed grave abuse of discretion in rendering its Decision dated 18 May 1992 which affirmed the decision of the Labor Arbiter dated 22 September 1989, denying him reinstatement though granting him "financial assistance."

N/A — The decision does not recount the arguments of the respondents in detail.

• Validity of Dismissal: Whether the NLRC committed grave abuse of discretion in affirming the Labor Arbiter's finding that petitioner was validly dismissed for participating in the illegal strike.
• Award of Financial Assistance: Whether the award of "financial assistance" to petitioner, who was validly dismissed for serious misconduct, was proper.

• Validity of Dismissal: No. The dismissal of petitioner was valid, being based on lawful or authorized cause. Petitioner's participation in the illegal strike and his commission of illegal acts while the strike was in progress, specifically his participation in the barricade which barred people from entering and/or leaving the employer's premises, had been sufficiently established by substantial evidence, including the testimony of Mr. Maniego.
• Award of Financial Assistance: No. The award of "financial assistance" was unjustified and was deleted. Financial assistance is permissible only where the cause of dismissal was something other than serious misconduct on the part of the employee or other cause reflecting adversely on the employee's moral character. Petitioner's participation in the unlawful and violent strike, which resulted in multiple deaths and extensive property damage, constituted serious misconduct.

• Validity of Dismissal: The Court found petitioner's contention that no substantial evidence exists on record to support the findings of the NLRC to be without merit. Petitioner's participation in the illegal strike and his commission of illegal acts while the strike was in progress, i.e., his participation in the barricade which barred people from entering and/or leaving the employer's premises, had been sufficiently established by substantial evidence, including the testimony of Mr. Maniego, Personnel Supervisor at the Cabuyao Plant. Mr. Maniego testified that he was not able to report to work because of the presence of the barricade. The law prohibits any person engaged in picketing from obstructing free ingress to or egress from the employer's premises for lawful purposes under Article 264(e) of the Labor Code. The Court also held that the dismissal of the criminal complaint against petitioner did not preclude a finding by the competent administrative authorities that petitioner had indeed committed acts inimical to the interest of his employer. Citing Pepsi Cola Bottling Company of the Philippines vs. Guanzon, the Court held that "Private respondent's guilt or innocence in the criminal case is not determinative of the existence of a just or authorized cause for his dismissal." This doctrine follows from the principle that the quantum and weight of evidence necessary to sustain conviction in criminal cases are quite different from the quantum of evidence necessary for affirmance of a decision of the Labor Arbiter and of the NLRC.

• Award of Financial Assistance: The Court disagreed with the award by the Labor Arbiter of "financial assistance" to petitioner and with the NLRC's affirmance of that portion of the award. The Court ruled that "financial assistance," whatever form it might assume, is permissible where the employee has been validly dismissed only in those instances where the cause of dismissal was something other than serious misconduct on the part of the employee or other cause reflecting adversely on the employee's moral character. Citing Cosmopolitan Funeral, Inc. vs. Maalat and quoting Philippine Long Distance Telephone Company (PLDT) vs. NLRC, the Court held that "separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character." In the case at bar, petitioner's participation in the unlawful and violent strike, which strike resulted in multiple deaths and extensive property damage, constituted serious misconduct on his part; accordingly, the award of "financial assistance" was bereft of basis and would moreover render the finding by the Labor Arbiter and the NLRC of just or authorized cause for termination of petitioner's services merely illusory. The Court noted that although private respondent did not appeal from the decisions of the Labor Arbiter and the NLRC, the resolution of the issue of the lawfulness of the award of "financial assistance" to petitioner was essential for the Court to render substantial justice as between the parties. The Court added that there is no legal impediment to the private respondent making a grant on a voluntary and ex gratia basis to petitioner, but the Labor Arbiter and NLRC had no authority legally to compel the private respondent to pay the "financial assistance" they awarded.

• Substantial Evidence in Labor Cases — The quantum and weight of evidence necessary to sustain conviction in criminal cases are quite different from the quantum of evidence necessary for affirmance of a decision of the Labor Arbiter and of the NLRC. Thus, the dismissal of a criminal complaint for insufficiency of evidence does not preclude a finding by competent administrative authorities that the employee had committed acts inimical to the interest of his employer. The Court applied this doctrine in affirming the validity of petitioner's dismissal despite the dismissal of the criminal complaint against him.

• Financial Assistance to Validly Dismissed Employees — Separation pay, financial assistance, or any similar award shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. A contrary rule would have the effect of rewarding rather than punishing the erring employee for his offense. The Court applied this doctrine in deleting the award of financial assistance to petitioner, whose participation in the unlawful and violent strike constituted serious misconduct.

• Obstructing Free Ingress to or Egress from Employer's Premises — The Labor Code, under Article 264(e), prohibits any person engaged in picketing from obstructing free ingress to or egress from the employer's premises for lawful purposes. The Court applied this provision in affirming the validity of petitioner's dismissal, as his participation in the barricade which barred people from entering and/or leaving the employer's premises constituted an illegal act.

• "Private respondent's guilt or innocence in the criminal case is not determinative of the existence of a just or authorized cause for his dismissal." — This passage, quoted from Pepsi Cola Bottling Company of the Philippines vs. Guanzon, establishes the doctrine that criminal acquittal or dismissal does not bar a finding of just cause for dismissal in labor cases, given the different quantum of evidence required.

• "We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character." — This passage, quoted from Philippine Long Distance Telephone Company (PLDT) vs. NLRC through Cosmopolitan Funeral, Inc. vs. Maalat, articulates the controlling rule on when financial assistance or separation pay may be awarded to a validly dismissed employee.

• "A contrary rule would, as the petitioner correctly argues, have the effect of rewarding rather than punishing the erring employee for his offense." — This passage explains the policy rationale behind the rule that financial assistance is not available to employees dismissed for serious misconduct, as awarding it would negate the disciplinary purpose of the dismissal.

• Pepsi Cola Bottling Company of the Philippines vs. Guanzon, 172 SCRA 571 (1989) — Cited as controlling precedent for the doctrine that an employee's guilt or innocence in a criminal case is not determinative of the existence of a just or authorized cause for dismissal.
• Cosmopolitan Funeral, Inc. vs. Maalat, 187 SCRA 108 (1990) — Cited as clarifying the instances where "financial assistance" to an employee who had been dismissed for cause may be awarded by the Labor Arbiter or the NLRC.
• Philippine Long Distance Telephone Company (PLDT) vs. NLRC, 164 SCRA 671 (1988) — Cited as the case that reexamined and abandoned the doctrine that employees dismissed for cause are nevertheless entitled to separation pay on the ground of social and compassionate justice.
• Union of Filipro Employees vs. Nestle Philippines, Inc., 192 SCRA 396 (1990) — Cited as the case affirming the declaration of the strike as illegal.
• Hydro Resources Contractors Corp. vs. Court of Appeals, 204 SCRA 309 (1991) — Cited in support of the Court's authority to pass upon the issue of the lawfulness of the award of "financial assistance" even though private respondent did not appeal.

• Article 264(e), Labor Code — Prohibits any person engaged in picketing from obstructing free ingress to or egress from the employer's premises for lawful purposes. The Court applied this provision in affirming the validity of petitioner's dismissal, as his participation in the barricade constituted a violation of this prohibition.

Narvasa, C.J., Regalado, Nocon, and Campos, Jr., JJ., concurred.

N/A — No dissenting opinions were noted in the decision.