G.R. No. 112650 May 29, 1997
PAMPANGA SUGAR DEVELOPMENT COMPANY (PASUDECO), INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PASUDECO UNION OF PROFESSIONAL, TECHNICAL & DEPARTMENTAL STAFFS & MANUEL D. ROXAS, respondents.

FACTS

Petitioner PASUDECO dismissed private respondent Manuel Roxas, its Purchasing Officer since 1967, on October 16, 1990, for serious misconduct, fraud, breach of trust, and abandonment. The company alleged that from 1986 to 1990, Roxas, in conspiracy with his assistant, falsified purchase orders and overpriced supplies, causing massive losses. After the dismissal, Roxas and his union filed a complaint for illegal dismissal. An Executive Labor Arbiter ordered Roxas’s reinstatement pending grievance proceedings. Upon reporting back, PASUDECO served him a new notice and conducted an investigation in his absence, leading to a formal termination on February 11, 1991, reiterating the original charges.
The Labor Arbiter dismissed Roxas’s complaint, finding the dismissal valid. However, the National Labor Relations Commission (NLRC) reversed this decision, ruling the dismissal illegal and ordering reinstatement with full backwages. The NLRC found that PASUDECO failed to prove Roxas’s direct participation in the anomalies. It noted that his actual authority to approve purchase orders had been transferred to higher officials as early as 1982, making his title largely nominal during the period the frauds were committed.

ISSUE

Whether the NLRC committed grave abuse of discretion in reversing the Labor Arbiter and finding that PASUDECO illegally dismissed Manuel Roxas.

RULING

The Supreme Court dismissed the petition and affirmed the NLRC decision. The legal logic rests on the employer’s burden to prove just cause for dismissal with clear and convincing evidence. PASUDECO failed to discharge this burden. The Court found no substantial evidence directly linking Roxas to the falsification and overpricing. Critically, the company’s own evidence showed that Roxas’s core duty of approving purchase orders by initialing them had been removed in 1982 and later assigned to other managers. Therefore, during the period the anomalies occurred (1986-1990), he lacked the functional authority to perpetrate or prevent the frauds. Charging him with failure to supervise his assistant was untenable when he was stripped of the corresponding power.
The Court also rejected the charge of abandonment, as Roxas’s absence after his initial dismissal was a consequence of the labor dispute and his subsequent compliance with the reinstatement order negated any intent to abandon his work. Consequently, the dismissal, being unsupported by evidence and executed without affording Roxas a real opportunity to defend himself in the company investigation, was illegal. The NLRC’s findings were supported by evidence and constituted a correct application of labor law principles protecting security of tenure, and thus no grave abuse of discretion attended its decision.