Soco vs. Mercantile Corporation of Davao

An employee who voluntarily submits to the jurisdiction of a quasi-judicial body and seeks affirmative relief therein is estopped from later challenging that body's jurisdiction after an adverse ruling on the merits. Additionally, an employer's reasonable company rules and disciplinary measures are valid management prerogatives, and repeated violations thereof, coupled with a stubborn refusal to explain or attend grievance conferences, warrant dismissal, notwithstanding the employee's length of service — though separation pay may be awarded as equitable relief in appropriate circumstances.

Private respondent Mercantile Corporation of Davao (MERCO) is engaged in the sale and distribution of ice cream in Davao City. Petitioner Domiciano Soco was employed as a driver of MERCO's delivery van and served as President of the MERCO Employees Labor Union (MELU), an affiliate of the Federation of Free Workers (FFW). MERCO maintained Company Rule No. 19(a), which prohibited the unauthorized use of company vehicles for private purposes and prescribed a penalty of suspension of fifteen days for a first offense and dismissal for succeeding offenses. At the time of the events, Soco was attempting to transfer MELU's affiliation from the FFW to the Southern Philippines Federation of Labor (SPFL).

Mercantile Corporation of Davao (MERCO) is engaged in the sale and distribution of ice cream in Davao City. Domiciano Soco was employed as a driver of MERCO's delivery van and was the President of the MERCO Employees Labor Union (MELU), an affiliate of the Federation of Free Workers (FFW). In the last week of January 1979, MERCO's personnel officer conducted an investigation into reports that Soco was conducting union activities during working hours for the purpose of transferring MELU's affiliation from the FFW to the Southern Philippines Federation of Labor (SPFL), and that he was using the company vehicle for this purpose, in violation of Company Rule No. 19(a), which prescribed suspension of fifteen days for a first offense and dismissal for succeeding offenses.

On January 25, 1979, Soco was ordered to deliver ice cream to the Imperial Hotel and Maguindanao Hotel at CM Recto Avenue and to Your Goody Mart at Anda Street, all in Davao City. He deviated from his usual route and went to Kiosk No. 4 on San Pedro Street to talk to Bartolome Calago, a co-employee who was then off-duty. The personnel officer advised Soco to report to the office to explain his unauthorized deviation, but Soco did not comply. On January 30, 1979, MERCO wrote the FFW requesting a grievance conference to be scheduled not later than February 13, 1979. When Soco manifested his unwillingness to attend, the FFW relayed this to MERCO. Due to Soco's refusal to submit to a formal conference, MERCO, by memorandum dated February 13, 1979, suspended him for five days effective February 15, 1979, for violation of Company Rule No. 19(a), and reported the action to the Ministry of Labor.

On the same day, February 13, 1979, at 10:30 A.M., Soco was instructed to deliver ice cream to the New City Commercial Corporation at R. Magsaysay Avenue and Gempesaw Store at Gempesaw Street. After making these deliveries, he proceeded to the SPFL Union office at the Puericulture Center building on Alvarez Street. John Ferrazzini, MERCO's Manager, saw the company vehicle parked along the street and, after verifying that Soco was the driver, called Rogelio Galagar, Secretary of MELU, and another employee; in their presence, he removed the rotor of the van. When Soco emerged from the building and was unable to start the engine, he called for company assistance. An officer of MERCO again advised Soco to report to the office to explain the unauthorized deviation, but he did not do so. On February 14, 1979, MERCO wrote the FFW requesting a grievance conference on February 15, 1979, which was reset to February 21, 1979 to afford the FFW sufficient time to notify Soco. On February 20, 1979, the FFW informed MERCO that the grievance conference would not be held because Soco found it unnecessary.

On February 14, 1979, Soco filed a complaint for unfair labor practice against MERCO with the Regional Office of the Ministry of Labor, docketed as LRD Case No. LR-30-79, alleging that the five-day suspension was imposed on account of his union activities. On February 21, 1979, he was placed on preventive suspension pending approval of MERCO's application for clearance to terminate his employment, filed on February 22, 1979 and docketed as LRD Case No. ROXI-C-209-79. The two cases were consolidated and tried jointly. The Regional Director, in an order dated May 21, 1979, granted MERCO's application to terminate Soco's employment, upheld the preventive suspension, and dismissed the ULP complaint. The Deputy Minister of Labor affirmed this order on October 25, 1979. The Regional Director found that Soco had violated Company Rule No. 19(a) twice — first on January 25, 1979, and second on February 13, 1979, when he was caught by no less than MERCO's Manager using the company vehicle for private purposes during working hours.

• Jurisdiction: Petitioner contended that under Policy Instruction No. 6 of the Ministry of Labor and Employment, the Regional Director had no jurisdiction to hear and decide unfair labor practice cases, as exclusive original jurisdiction over such cases belonged to the Conciliation Section of the Regional Office, and that such cases should first be resolved by the Labor Arbiter and not the Regional Director.
• Findings of Fact: Petitioner averred that the Deputy Minister of Labor erred in affirming the Regional Director's finding that he had violated Company Rule No. 19(a) twice, and that his dismissal was therefore unwarranted — a question he framed as factual.
• Security of Tenure and Proportionality: Petitioner asserted that affirming his dismissal violated the constitutional provision on security of tenure of employees, and that assuming he violated the company rule, the damage caused to MERCO was only minimal and should not warrant dismissal. He emphasized his eighteen years of employment and argued that his misuse of the company vehicle did not hamper the smooth business operations of MERCO.

• Estoppel on Jurisdiction: Respondent, through the Office of the Solicitor General, argued that petitioner had voluntarily submitted to the Regional Director's jurisdiction by agreeing to the consolidation of the two cases and by presenting his evidence without challenging the Director's authority, and could not thereafter repudiate that jurisdiction after an adverse ruling.
• Validity of Dismissal: Respondent maintained that petitioner was caught twice violating Company Rule No. 19(a), and that the ULP complaint filed on February 14, 1979 was an anticipatory move brought about by the fact that he was caught the second time on February 13, 1979.
• Management Prerogative: Respondent asserted the employer's prerogative to prescribe reasonable rules and regulations necessary for the conduct of its business and to enforce disciplinary measures to ensure compliance.

• Jurisdiction: Whether the Regional Director had jurisdiction to hear and decide the consolidated unfair labor practice and clearance-to-terminate cases, or whether such jurisdiction exclusively belonged to the Labor Arbiter.
• Findings of Fact: Whether the Deputy Minister of Labor erred in affirming the Regional Director's findings that petitioner violated Company Rule No. 19(a) twice.
• Validity of Dismissal: Whether the dismissal of petitioner was valid, or whether it violated his constitutional right to security of tenure given the minimal damage caused and his length of service.

• Jurisdiction: No. Petitioner was estopped from challenging the Regional Director's jurisdiction after having voluntarily submitted to it and sought affirmative relief without objection.
• Findings of Fact: No. The findings of fact of quasi-judicial bodies, when supported by evidence, are binding on the Supreme Court; petitioner was caught a second time by MERCO's Manager himself in actual violation of the rule.
• Validity of Dismissal: No. The dismissal was a valid exercise of management prerogative to enforce reasonable company rules; however, separation pay was awarded as equitable relief in view of petitioner's eighteen years of service.

• Jurisdiction: At the initial hearing on March 7, 1979, the parties agreed to consolidate the two cases, as both involved the same parties and interrelated issues. Petitioner presented his evidence before the Regional Director without challenging that official's authority. Having invoked the Regional Director's jurisdiction to secure affirmative relief, petitioner could not later repudiate it after failing to obtain a favorable outcome. The Court applied the doctrine from Tijam vs. Sibonghanoy that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. This was reiterated in Ching vs. Ramolete, where the Court held that while jurisdiction may be challenged at any time, sound public policy bars a party from doing so after having procured that jurisdiction himself, speculating on the fortunes of litigation.

• Findings of Fact: The issue raised by petitioner regarding whether he violated Company Rule No. 19(a) twice was a question of fact. As a general rule, the findings of fact of trial courts or quasi-judicial bodies are binding on the Supreme Court. This principle applied because the findings of the Deputy Minister of Labor were supported by the evidence on record. Petitioner was caught for the second time by no less than the Manager of MERCO in actual violation of the rule prohibiting the use of the company vehicle for private purposes — after making his assigned deliveries, he proceeded to the SPFL Union office, and the manager found the vehicle parked along the street and removed its rotor.

• Validity of Dismissal: An employer has the prerogative to prescribe reasonable rules and regulations necessary for the conduct of its business and to provide disciplinary measures to ensure compliance. A rule prohibiting employees from using company vehicles for private purposes without authority is reasonable, proper, and necessary for the orderly conduct of business. Petitioner twice used the company vehicle for personal interests during company time, deviating from his authorized route without permission, and stubbornly refused to explain or attend grievance conferences. To condone such conduct would erode the discipline an employer must uniformly apply, rendering company rules ineffectual. The Court agreed with the Solicitor General's observation that the ULP complaint was an anticipatory move filed after petitioner was caught the second time. Nevertheless, in light of Soco's eighteen years of service, the Court deemed it proper to afford equitable relief by ordering separation pay equivalent to one month's salary for every year of service.

• Estoppel by Voluntary Submission to Jurisdiction — A party who voluntarily submits to the jurisdiction of a court or quasi-judicial body and seeks affirmative relief therein is estopped from later challenging that body's jurisdiction after an adverse decision on the merits. Sound public policy bars a party from speculating on the fortunes of litigation by invoking jurisdiction to secure relief and then attacking it when the outcome is unfavorable. The Court applied this doctrine to hold that petitioner, having agreed to consolidation and presented his evidence before the Regional Director without objection, could not thereafter challenge the Director's jurisdiction.

• Binding Effect of Findings of Fact of Quasi-Judicial Bodies — As a general rule, the findings of fact of trial courts or quasi-judicial bodies are binding on the Supreme Court, particularly when such findings are supported by the evidence on record. The Court applied this principle to uphold the Deputy Minister of Labor's affirmation of the Regional Director's findings that petitioner violated Company Rule No. 19(a) twice.

• Management Prerogative to Prescribe and Enforce Reasonable Company Rules — An employer has the prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business and to provide disciplinary measures to implement those rules and assure compliance. A rule prohibiting the unauthorized use of company vehicles for private purposes is reasonable and necessary for orderly business operations. Repeated violations, coupled with a refusal to explain or attend grievance conferences, warrant dismissal, as condonation would erode discipline and render company rules ineffectual.

• Equitable Relief of Separation Pay for Dismissed Employees with Long Service — While a dismissal may be valid, the Court may, in the exercise of equity, award separation pay to a dismissed employee in recognition of long years of service. In this case, the Court awarded separation pay equivalent to one month's salary per year of service, given petitioner's eighteen years of employment with MERCO.

• "after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court." — This passage, quoting Tijam vs. Sibonghanoy, articulates the doctrine of estoppel by voluntary submission to jurisdiction, which was the controlling basis for rejecting petitioner's jurisdictional challenge.

• "Having invoked the jurisdiction of the trial court to secure an affirmative relief against his opponents, petitioner may not now be allowed to repudiate or question the same jurisdiction after failing to obtain such relief." — This quotation from Ching vs. Ramolete reinforces the estoppel doctrine, emphasizing that public policy bars a party from speculating on the fortunes of litigation.

• "A rule prohibiting employees from using company vehicles for private purpose without authority from management is, from our viewpoint, a reasonable one." — This passage defines the standard for evaluating the reasonableness of company rules and confirms that the prohibition on unauthorized personal use of company vehicles satisfies that standard.

• "Certainly, to condone petitioner's own conduct will erode the discipline that an employer should uniformly apply so that it can expect compliance to the same rules and regulations by its other employees." — This statement articulates the rationale for upholding the dismissal: that uniform enforcement of reasonable company rules is essential to maintaining workplace discipline.

• Tijam vs. Sibonghanoy, 23 SCRA 29 — Controlling precedent on estoppel by voluntary submission to jurisdiction. The Court relied on this case to hold that petitioner, having voluntarily submitted to the Regional Director's jurisdiction and sought affirmative relief, could not later challenge that jurisdiction after an adverse ruling.

• Ching vs. Ramolete, 51 SCRA 14 — Followed and quoted as reiterating the doctrine from Tijam. The Court applied the principle that sound public policy bars a party from repudiating jurisdiction after having invoked it to secure affirmative relief.

• Policy Instruction No. 6, Ministry of Labor and Employment — Petitioner invoked this issuance to argue that the Regional Director lacked jurisdiction over unfair labor practice cases, claiming exclusive original jurisdiction belonged to the Conciliation Section of the Regional Office. The Court did not rule on the merits of this argument, holding instead that petitioner was estopped from raising it.

• Constitutional Provision on Security of Tenure — Petitioner asserted that his dismissal violated the constitutional guarantee of security of tenure. The Court rejected this contention, finding that the dismissal was a valid exercise of management prerogative to enforce reasonable company rules, and that the constitutional guarantee does not protect an employee from the consequences of repeated violations of lawful company regulations.

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