G.R. No. 159448 December 16, 2005
WAH YUEN RESTAURANT, Petitioner, vs. PRIMO JAYONA, Respondent.

FACTS

Primo Jayona was hired as Assistant Manager by Wah Yuen Restaurant in December 1998. On January 5, 2000, the restaurant’s president, Betty Chua, issued a letter-memorandum directing Jayona to explain within 72 hours why he should not be dismissed for grave dishonesty and loss of confidence for allegedly underbilling a customer on January 3, 2000. The memorandum warned that a repetition would cause automatic dismissal. A handwritten note on the memorandum indicated Jayona refused to acknowledge receipt. Subsequently, on April 5, 2000, petitioner terminated Jayona’s services effective immediately, citing a second similar incident on April 3, 2000.
Jayona filed a complaint for illegal dismissal. The Labor Arbiter dismissed the complaint, ruling that as a managerial employee, loss of trust and confidence justified dismissal. The NLRC affirmed, noting the January 5 memorandum served as sufficient notice. The Court of Appeals reversed, finding the dismissal illegal. It cast doubt on the first incident, noting Jayona received a salary increase on January 15, 2000, and ruled the employer failed to establish the infractions with substantial evidence and to comply with procedural due process.

ISSUE

Whether respondent Primo Jayona was illegally dismissed.

RULING

Yes, the Supreme Court affirmed the Court of Appeals and declared the dismissal illegal. The legal logic proceeds from the employer’s dual burden in dismissal cases: to prove by substantial evidence the existence of a just or authorized cause, and to show observance of procedural due process. First, on substantive due process, the Court found petitioner failed to discharge its burden of proving the alleged infractions by substantial evidence. The evidence presented, primarily the January 5 memorandum, was insufficient. The Court agreed with the appellate court’s observation that the grant of a salary increase shortly after the alleged first infraction undermined the charge’s credibility. Loss of trust and confidence, to be a valid ground, must rest on clearly established facts, which were not proven here.
Second, on procedural due process, the Court ruled petitioner failed to comply with the twin-notice requirement. The January 5 memorandum, even if received, was merely a notice to explain. The termination letter dated April 5, 2000, served on the same date it was to take effect, constituted the notice of termination. There was no showing that a hearing or conference was conducted between these two notices to afford Jayona a real opportunity to be heard. This failure violated his right to procedural due process. Consequently, the dismissal was illegal, entitling Jayona to reinstatement, full backwages, and other benefits.