G.R. No. 166616 ; January 27, 2006
FIRST DOMINION RESOURCES CORPORATION, Petitioner, vs. MERCURIO PEÑARANDA and ROMEO VIDAL, Respondents.

FACTS

Petitioner First Dominion Resources Corporation, a textile manufacturer, dismissed respondents Mercurio Peñaranda and Romeo Vidal for repeatedly violating Company Rule 8, which strictly prohibits sleeping while on duty. Both were night-shift employees. Peñaranda was first caught sleeping on February 22, 2001, resulting in a two-day suspension and a stern warning. He was caught a second time on March 30, 2001. Vidal was likewise first caught sleeping on March 25, 2001, receiving the same penalty and warning. He was caught a second time on May 18, 2001, sleeping inside a container van. After being asked to explain, Peñaranda merely denied the allegations, while Vidal refused to submit any explanation. Both were terminated on June 20, 2001.
The labor arbiter upheld the dismissal. The NLRC reversed, finding the dismissal illegal but withholding reinstatement and backwages. The Court of Appeals affirmed the NLRC’s finding of illegality, adding an award of full backwages and attorney’s fees, ruling the dismissals were without just cause and procedural due process.

ISSUE

Whether the Court of Appeals erred in ruling that respondents were illegally dismissed for lack of just cause and procedural due process.

RULING

The Supreme Court granted the petition, reversing the appellate court. The dismissal was for a just cause under Article 282 of the Labor Code: willful disobedience of a lawful order. The legal test requires the disobedience to be willful, characterized by a wrongful and perverse attitude, and the order violated must be reasonable, lawful, known to the employee, and pertain to his duties. Both requisites were met. Respondents’ conduct was willful; they violated the rule twice despite clear warnings. Vidal attempted to evade detection, and Peñaranda ignored his supervisor. Company Rule 8 was a reasonable and lawful exercise of management prerogative, essential for the continuous, interlocked operation of textile machinery.
Procedural due process was also satisfied. The law requires two written notices: one to explain and one for the decision. Petitioner complied by issuing notices to explain and subsequent termination notices. The absence of a formal hearing does not negate due process, as the essence is the opportunity to be heard. Respondents were given this opportunity—Peñaranda submitted a denial, and Vidal, by his refusal, waived his right. Therefore, the dismissals were valid. The decision of the labor arbiter was reinstated.