G.R. No. 90527 March 23, 1992
RURAL BANK OF BAAO, INC., and ERMELO ALMEDA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and EDUARDO FROYALDE, respondents.

FACTS

The private respondent, Eduardo Froyalde, was the manager of the Rural Bank of Baao, Inc. for 13 years, from October 3, 1973, until his termination on July 29, 1986. On July 15, 1986, he received a memorandum from the bank’s president, Ermelo M. Almeda, together with a copy of an external audit report. The memorandum placed Froyalde under preventive suspension for 15 days and directed him to show cause in writing why he should not be dismissed, warning that criminal and/or civil actions might be filed against him. Froyalde submitted a written reply on July 17, 1986. On July 29, 1986, he was dismissed on the grounds of loss of confidence, breach of trust, and violation of existing banking laws. Froyalde filed a complaint for illegal dismissal. The Labor Arbiter ruled in his favor, ordering the petitioners to pay backwages, separation pay, moral and exemplary damages, and attorney’s fees. The National Labor Relations Commission (NLRC) affirmed this decision in a Resolution dated November 29, 1988, and denied the petitioners’ motion for reconsideration in a Resolution dated September 4, 1989. The petitioners then filed this petition for certiorari.

ISSUE

Whether or not Eduardo Froyalde was dismissed without due process of law.

RULING

Yes, Eduardo Froyalde was dismissed without due process of law. The Supreme Court dismissed the petition for certiorari for lack of merit and affirmed the NLRC resolution in toto. The Court held that the bank failed to comply with the due process requirements under the Labor Code’s Implementing Rules. First, the preventive suspension was not justified as the external auditor’s report did not state, nor did the bank president’s memorandum find, that Froyalde’s continued employment posed a “serious and imminent threat” to life or property as required by the rules. Second, the bank did not follow the procedure for dismissal: it did not provide Froyalde with a written notice stating the particular acts constituting the grounds for dismissal, did not afford him ample opportunity to be heard and defend himself after his reply, and issued the notice of termination only three days after his reply without waiting for his suspension period to expire. The termination notice merely cited general grounds like “breach of trust, loss of confidence, and violations of existing banking laws” without specifying the particular acts. The Labor Arbiter found the record lacked solid, properly identified evidence to prove just cause for dismissal. The right to due process applies to all workers, including managerial employees. Therefore, the dismissal was invalid for lack of both just cause and due process.