G.R. No. 193219 , July 17, 2015
COPY CENTRAL DIGITAL COPY SOLUTION and/or VIRGILIO MONTANO, Petitioners, vs. MARILYN DOMRIQUE and CARINA LEAÑO, Respondents.

FACTS

Respondents Marilyn Domrique and Carina Leaño were employed as photocopy machine operators by petitioners Copy Central Digital Copy Solution and/or Virgilio Montano. Domrique started on February 21, 1993, and Leaño on January 1996, assigned at the Laoag City branch. Their duties included handling machines, keeping materials, and collecting money. On October 12, 2005, Leaño and another employee filed a complaint with the DOLE regarding alleged labor standards violations. A DOLE inspection on October 18, 2005, found violations. On November 2, 2005, the manager, Susana Montano, ordered an audit of the branch, which allegedly revealed discrepancies in meter reading reports submitted by respondents, leading to a conclusion that they conspired to cheat and pocket differences (Domrique: ₱31,472.50; Leaño: ₱3,501.00). The matter was recorded in the police blotter on November 3, 2005. On the same day, respondents were made to execute a document titled “Naiget Nga Kari” (Solemn Promise). On November 4, 2005, termination letters were issued to both respondents, citing loss of trust and confidence due to fraud and false meter reading reports, with Domrique also accused of misappropriating bond paper. Respondents filed complaints for illegal dismissal and money claims on November 9, 2005. They denied misappropriation, explaining that discrepancies were due to allowed credit arrangements with customers and ongoing collections during the audit period. They claimed they signed the “Naiget Nga Kari” to promise remittance of receivables to end the controversy and subsequently delivered partial payments (Domrique: ₱17,000; Leaño: ₱1,600) on November 8, 2005, but were not reinstated. Petitioners contended dismissal was for just cause, citing loss of trust and confidence, and noted a criminal complaint for qualified theft was filed.

ISSUE

Whether the dismissal of respondents from employment was legal, both substantively (existence of a just cause) and procedurally (observance of due process).

RULING

The Supreme Court affirmed the Court of Appeals’ decision, ruling that the dismissal was illegal for lack of just cause and failure to observe procedural due process. On substantive grounds, the evidence, including the “Naiget Nga Kari” and partial payments, was insufficient to prove loss of trust and confidence. The document and payments did not constitute an admission of misappropriation but were consistent with respondents’ explanation of settling receivables. The findings of the audit were not substantiated by substantial evidence. On procedural grounds, petitioners failed to afford respondents the twin notice requirement. The termination letters dated November 4, 2005, which informed respondents of the charges, were the same letters that effected their dismissal, and they contained no statement offering respondents an opportunity to explain their side. Thus, respondents were illegally dismissed and entitled to backwages, separation pay, and attorney’s fees as awarded by the Labor Arbiter.