G.R. No. 108444 & 108769 November 6, 1997
JESUS B. FERNANDEZ, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and MANILA ELECTRIC COMPANY, respondents. / MANILA ELECTRIC COMPANY, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and JESUS B. FERNANDEZ, respondents.

FACTS

Jesus Fernandez was hired by MERALCO on April 30, 1965 and promoted to Senior Branch Engineer in January 1986. On October 6, 1986, MERALCO received a complaint that Felipe Rondez, a subordinate of Fernandez, was exacting “grease money.” An entrapment operation was arranged on October 10, 1986. Fernandez, Rondez, and Angelito Licuanan had lunch with the complainant, Mariano Caballero, at Barrio Fiesta Restaurant. After Caballero handed marked money to Rondez, police arrested them. Fernandez was detained and a criminal complaint for estafa was filed against him, which was later dismissed by the Provincial Fiscal for insufficiency of evidence. During its administrative investigation, MERALCO discovered Fernandez had previously approved an application for four electric meters for a certain Janet Ley, violating the company’s policy against “load splitting.” On August 6, 1987, MERALCO dismissed Fernandez for serious misconduct and loss of confidence, citing violations of its Code on Employee Discipline. Fernandez filed a complaint for illegal dismissal. The Labor Arbiter ruled in favor of Fernandez, ordering reinstatement with backwages and damages. The NLRC reversed the Labor Arbiter, finding just cause for dismissal but awarded separation pay instead of reinstatement. Both parties filed separate petitions for certiorari, which were consolidated.

ISSUE

Whether MERALCO validly dismissed Jesus Fernandez on the grounds of loss of trust and confidence due to alleged conspiracy in extortion and violation of company policy on load splitting.

RULING

The Supreme Court ruled that Fernandez was illegally dismissed. On the first ground, the Court found no substantial evidence of conspiracy between Fernandez and Rondez in the extortion scheme. Mere presence at the lunch meeting did not prove conspiracy, and Rondez’s statements exonerated Fernandez. On the second ground, the load splitting violation committed by Fernandez in September 1986 was considered a first offense under MERALCO’s own memorandum dated September 18, 1986, which prescribed a penalty of a 10-day suspension for such infractions committed prior to September 1, 1986, not dismissal. The Court found that MERALCO failed to prove a willful breach of trust justifying dismissal. The Labor Arbiter’s decision was reinstated, declaring the dismissal illegal and ordering Fernandez’s reinstatement with full backwages, moral and exemplary damages, and attorney’s fees.