G.R. No. L-55624 November 19, 1982
Baguio Country Club Corporation, petitioner, vs. National Labor Relations Commission, First Division, Labor Arbiter Benigno Ayson and Jimmy Sajonas, respondents.

FACTS

The Baguio Country Club Corporation filed an application for clearance to terminate the employment of its bartender, Jimmy Sajonas, on grounds of willful breach of trust, dishonesty (specifically pocketing a customer’s cash payment and manipulating a charge chit), threatening a co-employee, and multiple rule violations. Sajonas opposed, alleging dismissal lacked just cause. After conciliation failed, the case was referred to Labor Arbiter Benigno Ayson for compulsory arbitration. The petitioner submitted a position paper with supporting sworn statements during conciliation. Sajonas initially filed only a brief opposition and did not submit a formal position paper during arbitration, leading the Club to adopt its earlier submission.
The Labor Arbiter, however, allowed Sajonas to file a last-minute position paper without furnishing a copy to the Club or providing it an opportunity to rebut the contents. The Arbiter then denied the application for clearance, citing insufficiency of evidence, and ordered Sajonas’s reinstatement with full backwages. The National Labor Relations Commission affirmed this decision, dismissing the Club’s appeal.

ISSUE

Whether the public respondents (Labor Arbiter and NLRC) committed grave abuse of discretion by denying the petitioner due process in the arbitration proceedings, particularly by deciding the case based on a position paper not served upon the employer and without affording it a chance to rebut.

RULING

Yes. The Supreme Court granted the petition, finding grave abuse of discretion. The Court emphasized that while administrative bodies like the NLRC are not bound by strict technical rules of procedure, they cannot disregard the fundamental requirements of due process. The labor arbiter’s procedure was irregular and one-sided: by admitting and considering Sajonas’s belated position paper without serving a copy on the Club and without allowing any rebuttal, the arbiter effectively deprived the employer of its right to be heard and to present countervailing evidence. This procedural flaw tainted the entire decision.
The NLRC compounded the error by affirming this irregular procedure. The Court held that the statutory grant of power to use summary procedures should heighten, not diminish, concern for due process. Examining the substantive evidence on record, which the public respondents failed to properly consider, the Court found sufficient grounds for dismissal, including established acts of dishonesty and threats to a co-employee that eroded the trust essential to the employment relationship. Consequently, the decisions of the NLRC and Labor Arbiter were set aside, and the Ministry of Labor was ordered to grant the clearance to terminate Sajonas’s employment.