G.R. No. 212070 , January 27, 2016
CEBU PEOPLE’S MULTI-PURPOSE COOPERATIVE and MACARIO G. QUEVEDO, Petitioners, vs. NICERATO E. CARBONILLA, JR., Respondent.

FACTS

Respondent Nicerato E. Carbonilla, Jr. was hired by petitioner Cebu People’s Multi-Purpose Cooperative (CPMPC) as a Credit and Collection Manager on November 14, 2005. His duties expanded over time to include those of Human Resources Department (HRD) Manager, Legal Officer, and finally, Legal and Collection Manager. Beginning February 2008, CPMPC, through its HRD Manager, issued a series of memoranda to Carbonilla, Jr. requiring him to explain various alleged infractions. These included: non-attendance at a dinner meeting; non-submission of reports; allowing a contractual collector to drive without a license; failure to account for a motorcycle; insulting a superior officer (COO Bentillo) in front of subordinates; acts of insubordination and disrespect for questioning the HRD Manager’s authority on hiring; failure to turn over documents; alleged gross negligence in various tasks (e.g., failing to submit employment assessments, promoting an employee without appraisal, failing to report a cash shortage, disseminating a wrong schedule, failing to annotate an encumbrance, failing to review a security agency contract, causing payment confusion, and failing to report on firearms status); making allegations against the CEO (questioning a land sale transaction) during a Board inquiry; failure to attend a meeting; and having documents notarized by an unauthorized lawyer. Carbonilla, Jr. submitted replies to these memoranda, generally offering explanations, clarifications, or defenses for each charge. Subsequently, CPMPC terminated his employment. The National Labor Relations Commission (NLRC) ruled in favor of the employer, but the Court of Appeals (CA) reversed this, declaring Carbonilla, Jr. to have been illegally dismissed.

ISSUE

Whether or not the Court of Appeals erred in reversing the NLRC and declaring that respondent Carbonilla, Jr. was illegally dismissed.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals. The Court held that Carbonilla, Jr. was illegally dismissed. The employer, CPMPC, failed to substantiate by substantial evidence that the dismissal was for a just or authorized cause. The series of memoranda and alleged infractions, when examined, did not collectively constitute gross and habitual neglect of duties, willful disobedience, or loss of trust and confidence that would justify dismissal. Many of the charges pertained to minor or isolated incidents, and Carbonilla, Jr. provided plausible explanations for most. His act of questioning the CEO’s transaction, as a cooperative member concerned with transparency, did not amount to gross misconduct. Furthermore, the employer failed to observe the twin requirements of substantive and procedural due process in effecting the dismissal. The award of backwages and separation pay in lieu of reinstatement was upheld. The Court also ruled that the employer could not unilaterally deduct alleged unremitted collections from the monetary award, as such a claim is a separate civil liability that must be pursued in the proper forum, not through compensation or set-off against the employee’s statutory benefits.