G.R. No. 150278 ; August 9, 2007
LANDTEX INDUSTRIES and WILLIAM GO, Petitioners, vs. COURT OF APPEALS, SALVADOR M. AYSON, and LANDTEX INDUSTRIES WORKERS UNION – FEDERATION OF FREE WORKERS (FFW), Respondents.

FACTS

Salvador Ayson, a knitting operator and union officer, was dismissed by Landtex Industries for allegedly spreading malicious rumors about the personal life of owner William Go and for an altercation with a company owner. The company initiated an investigation, but Ayson contested the vagueness of the charges and requested subsequent hearings be held at the company office to avoid salary deductions. A meeting was scheduled, which Ayson did not fully attend, and at a later meeting, he and a union officer refused to sign the attendance sheet or participate. Landtex terminated Ayson for lack of cooperation during the investigations. The union initially agreed with management to refer the dispute to a third party under the CBA but Ayson instead filed a complaint for illegal dismissal with the labor arbiter.

ISSUE

The primary issues were: (1) whether the labor arbiter had jurisdiction over the illegal dismissal case despite an existing CBA provision for voluntary arbitration; and (2) whether Ayson’s dismissal was for a just cause and effected with due process.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, ruling the dismissal was illegal. On jurisdiction, the Court held that while the CBA contained a grievance procedure, the union’s mere manifestation of a desire to refer the case to a third party did not automatically divest the labor arbiter of jurisdiction, especially since no specific voluntary arbitrator had been chosen or agreed upon. The illegal dismissal case was properly filed.
On the merits, the Court found the dismissal lacked both substantive and procedural due process. Substantively, Landtex failed to prove by substantial evidence that Ayson committed the alleged acts. The sole evidence was an unverified statement from an unnamed security guard, which constituted hearsay and was insufficient to establish willful disobedience or serious misconduct. Procedurally, the company failed to afford Ayson a real opportunity to defend himself. The initial charge was vague, and the subsequent investigation was flawed as Ayson was not presented with the alleged witnesses against him. His termination for alleged non-cooperation was unjustified given these procedural defects. Consequently, Ayson was entitled to reinstatement, backwages, and other monetary awards, with separation pay in lieu of reinstatement due to the strained relations.