G.R. No. 142244 November 18, 2002
ATLAS FARMS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, JAIME O. DELA PEÑA and MARCIAL I. ABION, respondents.

FACTS

Private respondent Jaime O. dela Peña was employed as a veterinary aide in December 1975, terminated in July 1989, and re-hired on July 8, 1989, with the added duty of feedmill operator. On March 13, 1993, he was allegedly caught urinating and defecating on unauthorized company premises. After refusing to receive a notice to explain and failing to provide an explanation, he was terminated on March 20, 1993, and received separation pay of P13,918.67. From his re-hiring until termination, he worked seven days a week without overtime, holiday, rest day, and service incentive leave pay, receiving a daily wage of P180.
Private respondent Marcial I. Abion was employed as a carpenter/mason on October 8, 1990. He was allegedly responsible for clogging a fishpond drainage system by improper waste disposal, causing significant damage. After similarly refusing a notice to explain, his services were terminated on October 27, 1992, and he received separation pay. He also worked seven days a week without holiday, rest day, service incentive leave, and night shift differential pay, receiving a monthly salary of P4,500.
Peña and Abion filed separate complaints for illegal dismissal, later consolidated, claiming their termination was due to petitioner’s suspicion they were leading an effort to form a new union. The labor arbiter initially dismissed the complaints for failure to exhaust the CBA’s grievance machinery. After attempting the grievance process, they refiled the case alleging “lack of sympathy” from petitioner. The labor arbiter again dismissed the complaints for lack of merit, finding the dismissals legal and noting the acceptance of separation pay. The NLRC reversed this decision. The Court of Appeals denied petitioner’s petition for certiorari, affirmed the NLRC with modifications, and denied reconsideration.

ISSUE

1. Whether private respondents were legally and validly dismissed.
2. Whether the labor arbiter and the NLRC had jurisdiction to decide the complaints for illegal dismissal.
3. Whether petitioner is liable for costs of the suit.

RULING

1. The dismissal of private respondents was illegal. The burden of proving the legality of the dismissal rests on the employer, and petitioner failed to substantiate its claim that private respondents committed acts violating company rules. Factual findings of quasi-judicial agencies like the NLRC are accorded respect and finality, and there was no showing the NLRC acted arbitrarily.
2. The labor arbiter and NLRC had jurisdiction. Article 217 of the Labor Code grants labor arbiters original and exclusive jurisdiction over termination disputes. While Article 261 grants voluntary arbitrators jurisdiction over unresolved grievances arising from CBA interpretation or company personnel policies, this case is a termination dispute not specifically involving the application or interpretation of such policies. The exception under Policy Instruction No. 56 does not apply. Furthermore, private respondents attempted but failed to avail of the grievance procedure, and the CBA did not contain an express agreement to refer termination disputes to voluntary arbitration.
3. Petitioner is liable for costs. The Court of Appeals’ award of costs against petitioner was proper, as costs generally follow the result of the litigation. The appellate court’s decision, which denied reinstatement due to acceptance of separation pay but awarded full backwages without deducting the separation pay received, was affirmed.