G.R. No. 152568 ; February 16, 2004
Tomas Claudio Memorial College, Inc., petitioner, vs. Court of Appeals and Pedro Natividad, respondents.

FACTS

Pedro Natividad was employed by Tomas Claudio Memorial College (TCMC) starting in 1983, eventually promoted to Liaison Officer with the rank of Assistant Registrar. On June 10, 1996, he was arrested without a warrant for alleged violation of the Dangerous Drugs Act. Based on this arrest, TCMC’s President issued a memorandum dated June 13, 1996, terminating Natividad’s employment effective immediately, citing the arrest as a just cause and barring him from campus. A criminal case was filed but later dismissed by the State Prosecutor in October 1996 for lack of merit, finding the arrest and search unlawful.
Natividad was arrested again in November 1996 on another drug charge, for which he posted bail. He filed a complaint for illegal dismissal with the NLRC only on June 11, 1997. The Labor Arbiter and the NLRC initially dismissed his complaint. However, the Court of Appeals reversed, declaring the dismissal illegal and ordering reinstatement with full backwages. TCMC elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether the Court of Appeals erred in ruling that Natividad was illegally dismissed and in awarding reinstatement and backwages.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The termination was illegal for failure to comply with substantive and procedural due process. Substantively, the mere fact of an arrest or filing of a criminal complaint does not constitute a just cause for dismissal under Article 282 of the Labor Code. At the time of termination, Natividad had not been convicted; he enjoyed the presumption of innocence. The first criminal case was subsequently dismissed for lack of merit, undermining TCMC’s basis. The employer’s reliance on unsubstantiated rumors and a discreet investigation did not establish guilt or provide lawful grounds for termination.
Procedurally, TCMC failed to observe the twin-notice requirement. The June 13, 1996 memorandum was a summary dismissal without affording Natividad an opportunity to explain his side or a hearing, violating his right to due process. On the award of remedies, reinstatement is appropriate as the dismissal was illegal, and there was no supervening event rendering it impossible. The grant of backwages is a separate, distinct relief intended to restore lost earnings from the time of illegal dismissal until actual reinstatement. It is not conditional upon the employee’s interim earnings and is awarded as a public reparation for the unlawful act of dismissal. The pendency of a second criminal case does not bar these awards, as Natividad remains presumed innocent until final conviction.