G & S Transport Corporation vs. Reynaldo A. Medina

A dismissal is illegal where no just cause exists, even if procedural due process was complied with; a petty quarrel involving shoving or slight pushing, without more, does not constitute serious misconduct under Article 297 of the Labor Code. The Court of Appeals does not commit grave abuse of discretion when it reviews NLRC factual findings alleged to have been arbitrarily considered or disregarded.

G & S Transport Corporation, doing business as "Avis Rent-A-Car," is a corporation engaged in renting cars to the public. It employed Reynaldo A. Medina as a driver beginning September 15, 2008, primarily to fetch tourists to and from the airport and onward to their next destination. Medina remained in G & S's employ for seven years with no derogatory record. The dispute is governed by the Labor Code's provisions on termination for just cause and procedural due process.

G & S Transport Corporation, more popularly known as "Avis Rent-A-Car," hired Reynaldo A. Medina on September 15, 2008 as a driver. Medina's primary responsibility was fetching tourists to and from the airport and onward to their next destination. He remained in G & S's employ for seven years without any derogatory record. On February 12, 2015, Medina was on his shift from 6:00 a.m. to 3:00 p.m.; at around 5:00 p.m. he left the premises, but at around 10:00 p.m. he returned to retrieve his personal belongings.

At the gate, Medina chanced upon his co-employee Felix Pogoy, who was staring sharply at him. Medina accosted Pogoy and asked if there was a problem; Pogoy fired back with the same question. A heated argument with shoving then ensued. Another employee, Jose Viggayan, broke up the melee and led Medina away from Pogoy. G & S, however, countered that Medina was drunk when he assaulted Pogoy to the point of boxing and strangling the latter. According to G & S, Medina and Pogoy had to be restrained by security guards, and Medina allegedly refused to be controlled until Viggayan arrived and led him outside the garage.

After the submission of various written explanations, Medina was placed under preventive suspension. An administrative hearing was conducted. G & S concluded that Medina violated the Code of Discipline when he fought with a co-employee inside the work premises. Medina was terminated from employment on March 20, 2015. Aggrieved, Medina filed a Complaint for illegal dismissal, actual, moral, and exemplary damages, and attorney's fees.

The Labor Arbiter and the National Labor Relations Commission found that Medina had fought with a co-employee inside the work premises, which they treated as serious misconduct and a valid ground for termination. The Court of Appeals, after reviewing the testimonies and the transcript of the administrative hearing, found that what transpired between Medina and Pogoy was a petty quarrel involving shoving or slight pushing. The incident did not cause bodily harm, except a minor scratch on Medina's knee, and did not interfere with fellow employees or the operations of the business.

• Grave Abuse of Discretion and Appellate Jurisdiction: G & S argued that the Court of Appeals gravely erred in reversing the uniform findings of the labor tribunals and exceeded its appellate jurisdiction.
• Weight of Testimony: G & S maintained that the assailed Court of Appeals Decision accorded more weight to the testimony of Viggayan.
• Findings of Fact Beyond Rule 65: G & S argued that the assailed Decision was littered with quoted testimonies of witnesses, their credibility, and the determination of their weight, which are findings of fact beyond the province of a writ of certiorari under Rule 65.

• Grave Abuse of Discretion by the NLRC: Respondent Medina argued before the Court of Appeals that the NLRC committed grave abuse of discretion in ruling that he was validly terminated from employment and was not entitled to his monetary claims.

• Grave Abuse of Discretion and Appellate Jurisdiction: Whether the Court of Appeals committed grave abuse of discretion in reversing the uniform decisions of the labor tribunals and exceeded its appellate jurisdiction.
• Serious Misconduct: Whether Medina's participation in the February 12, 2015 incident constituted serious misconduct, a just cause for termination under Article 297 of the Labor Code.
• Procedural Due Process: Whether compliance with procedural due process validated Medina's termination despite the absence of a just cause.
• Commensurate Penalty: Whether the penalty of dismissal was commensurate with the act committed.

• Grave Abuse of Discretion and Appellate Jurisdiction: No. The Court of Appeals acted within its Rule 65 power to review evidence alleged to have been arbitrarily considered or disregarded; its factual review did not amount to grave abuse of discretion or excess of jurisdiction.
• Serious Misconduct: No. None of the requisites of serious misconduct concurred; the incident was a petty quarrel involving shoving or slight pushing, not serious or work-related misconduct showing unfitness.
• Procedural Due Process: No. Although G & S complied with the two-notice and hearing requirements, compliance did not validate the dismissal because there was no just cause.
• Commensurate Penalty: No. Dismissal was too harsh and not commensurate with the act; a lighter penalty such as suspension would have been more just.

• Grave Abuse of Discretion and Appellate Jurisdiction: Judicial review of labor cases begins with a special civil action for certiorari under Rule 65 before the Court of Appeals, assailing the NLRC decision on the ground of grave abuse of discretion amounting to excess or lack of jurisdiction. The Court of Appeals may reverse or modify the NLRC only on that exclusive ground. The case may then be appealed to the Supreme Court through a petition for review on certiorari under Rule 45 on pure questions of law. Grave abuse of discretion is a capricious and arbitrary exercise of judgment equivalent, in the eyes of the law, to lack of jurisdiction; it exists where power is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility amounting to an evasion of a positive duty, or a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law. Its meaning has been expanded to include any action contrary to the Constitution, the law, or jurisprudence. Although NLRC factual findings are accorded great weight and respect, the Court of Appeals is not precluded from reviewing evidence alleged to have been arbitrarily considered or disregarded. It may do so when the factual findings complained of are not supported by the evidence on record; when necessary to prevent a substantial wrong or to do substantial justice; when the findings of the NLRC contradict those of the Labor Arbiter; and when necessary to arrive at a just decision. Here, the Court of Appeals reviewed the testimonies of the security guard and Viggayan and the transcript of the administrative hearing. The security guard stated that Medina boxed and strangled Pogoy, while Viggayan stated that Medina and Pogoy were pushing or shoving each other, not boxing or strangling. Medina's statements during the administrative hearing were consistent with the absence of boxing or strangling. The Court of Appeals thus concluded that the incident was a petty quarrel involving shoving or slight pushing. This review was within its powers and jurisdiction, and no grave abuse of discretion was committed.
• Serious Misconduct: Under Article 297 of the Labor Code, an employer may terminate employment for serious misconduct or willful disobedience by the employee of lawful orders of the employer or representative in connection with his work. Misconduct is generally defined as a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. In labor cases, misconduct as a ground for dismissal must be serious or of such grave and aggravated character, not merely trivial or unimportant. To justify termination on the ground of serious misconduct, the following requisites must concur: (1) the misconduct must be serious; (2) it must relate to the performance of the employee's duties, showing that the employee has become unfit to continue working for the employer; and (3) it must have been performed with wrongful intent. None of these requisites was present. The Court of Appeals found that only a petty quarrel involving shoving or slight pushing transpired between Medina and Pogoy. The incident was nipped in the bud by the intervention of the security guards and Viggayan; it did not cause work stoppage nor pose a threat to the safety of other employees. G & S did not show how Medina's misconduct adversely affected its business or how Medina became unfit to continue working for the company. Thus, there was no just cause for termination.
• Procedural Due Process: Procedural due process refers to the manner of dismissal and mandates the observance of notice and hearing. The law requires employers to furnish employees with two written notices: the first specifies the ground for termination and gives the employee reasonable opportunity to explain his or her side; the second indicates that upon due consideration of all the circumstances, there is cause to justify termination. In this case, Medina was provided several notices to explain, was given the opportunity to submit written explanations, and an administrative hearing was conducted where he narrated his version of the incident. He was also served a second notice of termination. Compliance with procedural due process, however, did not validate the termination because of the absence of a just cause. Jurisprudence states that where there is no just cause to terminate employment but the requirements of procedural due process are complied with, the dismissal is rendered illegal.
• Commensurate Penalty: While misconduct in the eyes of the employer may have been committed, it was not serious enough to result in termination of employment. Infractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. The penalty must be commensurate with the act, conduct, or omission imputed to the employee and must be imposed in connection with the disciplinary authority of the employer. The disciplinary authority of G & S is recognized but should be tempered with compassion and understanding. Medina had been employed for seven years and only recently became involved in any form of misconduct. Absent evidence showing the seriousness and aggravated character of the misconduct, the extreme penalty of dismissal should not have been imposed; a lighter penalty, such as suspension, would have been more just. There was also no basis to award moral and exemplary damages because nothing showed that G & S was motivated by bad faith. Under Article 294 of the Labor Code, an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to full backwages, inclusive of allowances, and other benefits or their monetary equivalent from the time compensation was withheld up to actual reinstatement. Following Nacar vs. Gallery Frames, the total monetary award shall earn legal interest at six percent (6%) per annum from the date of finality of the Decision until fully paid.

• Grave abuse of discretion — Defined as a capricious and arbitrary exercise of judgment equivalent, in the eyes of the law, to lack of jurisdiction; it exists where power is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility amounting to an evasion of a positive duty, or a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law. The meaning has been expanded to include any action contrary to the Constitution, the law, or jurisprudence. In this case, the Court of Appeals' review of the evidence and its conclusion that Medina was illegally dismissed did not constitute grave abuse of discretion.
• Judicial review of labor cases — Review begins with a special civil action for certiorari under Rule 65 before the Court of Appeals, assailing the NLRC decision on the ground of grave abuse of discretion amounting to excess or lack of jurisdiction. The Court of Appeals may reverse or modify the NLRC only on that exclusive ground. The case may then be appealed to the Supreme Court through a petition for review on certiorari under Rule 45 on pure questions of law. The Supreme Court resolves whether the Court of Appeals correctly determined whether grave abuse of discretion attended the NLRC's determination.
• Court of Appeals review of NLRC factual findings — Although NLRC factual findings are accorded great weight and respect, the Court of Appeals is not precluded from reviewing evidence alleged to have been arbitrarily considered or disregarded. It may do so when the factual findings complained of are not supported by the evidence on record; when necessary to prevent a substantial wrong or to do substantial justice; when the findings of the NLRC contradict those of the Labor Arbiter; and when necessary to arrive at a just decision. To make this finding, the Court of Appeals must view the evidence to determine if the NLRC ruling had basis in evidence.
• Serious misconduct as a just cause for termination — Misconduct is a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. Under Article 297 of the Labor Code, it must be serious or of such grave and aggravated character, not merely trivial or unimportant. The requisites are: (1) the misconduct must be serious; (2) it must relate to the performance of the employee's duties, showing that the employee has become unfit to continue working for the employer; and (3) it must have been performed with wrongful intent. None concurred in Medina's case.
• Procedural due process in dismissal — Procedural due process refers to the manner of dismissal and mandates notice and hearing. The employer must furnish two written notices: the first specifies the ground for termination and gives the employee reasonable opportunity to explain; the second indicates that upon due consideration of all circumstances, there is cause to justify termination. Compliance with procedural due process does not validate a dismissal where there is no just cause; the dismissal is still illegal.
• Commensurate penalty and disciplinary authority — Infractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. The penalty must be commensurate with the act, conduct, or omission imputed and must be imposed in connection with the employer's disciplinary authority, which should be tempered with compassion and understanding. Absent evidence of seriousness and aggravated character, the extreme penalty of dismissal should not be imposed; a lighter penalty such as suspension is more just.
• Reinstatement, backwages, and damages — Under Article 294 of the Labor Code, an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to full backwages, inclusive of allowances, and other benefits or their monetary equivalent from the time compensation was withheld up to actual reinstatement. Moral and exemplary damages are not warranted absent proof that the employer was motivated by bad faith.
• Legal interest on monetary awards — Following Nacar vs. Gallery Frames, the total monetary award shall earn legal interest at the rate of six percent (6%) per annum from the date of finality of the decision until fully paid.

• "The CA may review evidence alleged to have been capriciously, whimsically, and arbitrarily relied upon or disregarded in the following instances: [The CA can grant this prerogative writ] when the factual findings complained of are not supported by the evidence on record; when it is necessary to prevent a substantial wrong or to do substantial justice; when the findings of the NLRC contradict those of the LA; and when necessary to arrive at a just decision of the case." — This passage states the exceptional circumstances under which the Court of Appeals may review NLRC factual findings despite the respect ordinarily accorded to them.
• "To justify termination on the ground of serious misconduct, the following requisites must concur: (1) the misconduct must be serious; (2) it must relate to the performance of the employee's duties, showing that the employee has become unfit to continue working for the employer; and (3) it must have been performed with wrongful intent." — This is the Court's canonical formulation of the requisites for serious misconduct as a just cause for dismissal.
• "In a situation where there is no just cause to terminate employment, but the requirements of procedural due process are complied with, jurisprudence states that the dismissal is rendered illegal." — This passage states the ratio for why G & S's compliance with notice and hearing did not save Medina's dismissal.
• "It is a hornbook principle that 'infractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. The penalty must be commensurate with the act, conduct or omission imputed to the employee and must be imposed in connection with the disciplinary authority of the employer.'" — This passage anchors the Court's holding that dismissal was too harsh and that suspension would have been more just.

• Philam Homeowners Association, Inc. vs. De Luna, G.R. No. 209437, March 17, 2021 — Cited for the rule that judicial review of labor cases begins with a Rule 65 certiorari petition in the Court of Appeals on the ground of grave abuse of discretion, and for the Court of Appeals' authority to review evidence alleged to have been arbitrarily considered or disregarded by the NLRC.
• Empas vs. Mariwasa Siam Ceramics, Inc., G.R. No. 246176 (Notice), December 7, 2021 — Cited for the definition of misconduct and the requisites of serious misconduct as a just cause for termination.
• Pioneer Texturizing Corp. vs. National Labor Relations Commission, 345 Phil. 1057, 1066 (1997) — Cited for the rule that where there is no just cause to terminate employment but procedural due process is complied with, the dismissal is rendered illegal.
• King of Kings Transport, Inc. vs. Mamac, 553 Phil. 108, 114 (2007) — Cited for the definition of procedural due process as the manner of dismissal and for the notice and hearing requirements.
• Sagales vs. Rustan's Commercial Corporation, 592 Phil. 468, 482 (2008) — Cited for the principle that the penalty must be commensurate with the act, conduct, or omission imputed to the employee and must be imposed in connection with the employer's disciplinary authority.
• Nacar vs. Gallery Frames, 716 Phil. 267, 283 (2013) — Cited for the rule that the total monetary award shall earn legal interest at six percent (6%) per annum from the date of finality of the decision until fully paid.
• Paredes vs. Feed the Children Philippines, Inc., 769 Phil. 418, 443 (2015) — Cited for the Court of Appeals' power to examine the records and evaluate evidence in order to confirm their materiality and significance, and to disregard the labor tribunal's factual findings when not substantiated by the evidence.
• Eastern Shipping Lines, Inc. vs. Canja, 771 Phil. 169, 176 (2015) — Cited for the rule that the NLRC's factual findings are accorded great weight and respect, even finality, if supported by sufficient and substantial evidence.

• Article 297 [282], Labor Code of the Philippines — Provides that an employer may terminate employment for serious misconduct or willful disobedience by the employee of lawful orders of the employer or representative in connection with his work. The Court applied this provision and found that Medina's conduct did not constitute serious misconduct because none of the requisites concurred.
• Article 292 [277], Labor Code of the Philippines — 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 ample opportunity to be heard and to defend himself or herself. The Court found that G & S complied with this requirement, but that compliance did not validate the dismissal absent a just cause.
• Article 294 [279], Labor Code of the Philippines — Provides that an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to full backwages, inclusive of allowances, and other benefits or their monetary equivalent from the time compensation was withheld up to actual reinstatement. The Court held that Medina was entitled to these awards.
• Book V, Rule XXIII, Section 2 (I), Omnibus Rules Implementing the Labor Code — Sets the standards of due process for termination based on just causes: a first written notice specifying the ground and giving reasonable opportunity to explain; a hearing or conference; and a written notice of termination indicating that upon due consideration of all circumstances, grounds have been established to justify termination. The Court found these requirements complied with.
• Rule 45, Rules of Court — Governs the petition for review on certiorari filed by G & S before the Supreme Court, which may raise only pure questions of law. The Court applied this rule in reviewing the Court of Appeals' determination.
• Rule 65, Rules of Court — Governs the special civil action for certiorari filed by Medina before the Court of Appeals, assailing the NLRC decision on the ground of grave abuse of discretion amounting to excess or lack of jurisdiction. The Court applied this rule in assessing the Court of Appeals' review.

Gesmundo, C.J. (Chairperson), Zalameda, Rosario, and Marquez, JJ., concur.