G.R. No. 122279 November 22, 1999
C & A CONSTRUCTION CO., INC. and ATTY. MELECIO ARRANZ, JR., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and LORNA E. PIMENTEL, respondents.

FACTS

Danilo Pimentel, head of the maintenance division of C & A Construction Co., was dismissed alongside three subordinates after second-hand spare parts were stolen from the company’s maintenance area on July 3, 1993. The three subordinates admitted guilt. Pimentel, upon learning he was implicated, wrote a letter denying involvement, citing illness. The company dismissed him effective July 22, 1993. Pimentel filed a complaint for illegal dismissal on October 8, 1993, but died on October 22, 1993, leading to the substitution of his widow, Lorna Pimentel, as complainant. Prior to his death, on October 18, 1993, the company gave Lorna P15,000.00 as financial assistance, for which she executed a statement waiving any further claims against the company.
The Labor Arbiter ruled the dismissal illegal, finding insufficient evidence of Pimentel’s complicity in the theft and a lack of due process, but deducted the P15,000.00 from the monetary award. The NLRC affirmed the decision, dismissing the company’s appeal. The company then filed this petition for certiorari, challenging the findings on illegal dismissal, the invalidation of the waiver, and the award of exemplary damages.

ISSUE

The primary issues were: (1) whether Danilo Pimentel was illegally dismissed; (2) whether the quitclaim/waiver executed by Lorna Pimentel was valid; and (3) whether the award of exemplary damages was proper.

RULING

The Supreme Court partially granted the petition. It upheld the findings of the Labor Arbiter and NLRC that Pimentel was illegally dismissed. The evidence presented by the company—affidavits from the three employees and an investigation report—did not substantiate Pimentel’s direct participation or negligence in the theft. The statements did not clearly implicate him, and the company failed to conduct a proper investigation or afford him due process. The Court emphasized that findings of fact by the NLRC, when supported by substantial evidence, are accorded great respect.
Regarding the quitclaim, the Court ruled it was invalid. Following the doctrine in St. Gothard Disco Pub & Restaurant vs. NLRC, a waiver or quitclaim executed during the pendency of a labor case requires approval by the Labor Arbiter before whom the case is pending to ensure its voluntariness. The payment and waiver here occurred after the complaint was filed, and no such approval was obtained. However, applying the principle against unjust enrichment, the P15,000.00 received was correctly deducted from the monetary award.
Finally, the Court deleted the award of P50,000.00 in exemplary damages. Such damages are recoverable only if the dismissal was effected in a wanton, oppressive, or malevolent manner. The Labor Arbiter provided no justification for the award, and the record did not establish that the company acted with such malice or bad faith warranting exemplary damages. The dismissal, while illegal due to insufficient cause and procedural lapses, was not shown to be tainted by the requisite degree of misconduct.