G.R. No. 153947 December 5, 2002
ANTONIO I. RODRIGUEZ, JR. and the BOARD OF DIRECTORS OF THE FIRST COMMUNITY COOPERATIVE (FICCO), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC), 5th DIVISION and ESTELA G. GADIAN, respondents.

FACTS

Private respondent Estela G. Gadian was hired as an internal auditor by petitioner First Community Cooperative (FICCO) on September 6, 1993. From August to November 1997, she took grocery items and merchandise worth P13,842.25 from FICCO’s consumer store. Three store personnel executed a joint affidavit stating she took the goods without paying and did not sign any loan application or authorize salary deduction. Based on this, FICCO filed an administrative case for grave misconduct and a criminal case for qualified theft against her. After an investigation on January 31, 1998, she was found guilty and dismissed on February 6, 1998. On February 13, 1998, she filed a complaint for illegal dismissal. The City Prosecutor dismissed the criminal case, finding FICCO failed to report any theft loss during the period and the payroll showed deductions for the goods from her salary from August to November 1997; this dismissal was affirmed by higher prosecutorial authorities. The Labor Arbiter declared the dismissal illegal, ordered reinstatement with backwages, and awarded moral and exemplary damages. The NLRC affirmed the illegal dismissal but deleted the moral and exemplary damages. The Court of Appeals affirmed the NLRC. Petitioners filed this petition, also contending the Labor Arbiter should have inhibited himself due to a prior collection case FICCO filed against him, which was later amicably settled.

ISSUE

Whether the dismissal of Estela G. Gadian was valid.

RULING

The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals. The dismissal was illegal. First, the petition suffered from a procedural defect: the verification and certification of non-forum shopping were signed by Vicente B. Rana, FICCO’s General Manager, without proof of authority via a board resolution, rendering the petition subject to dismissal. On the merits, the dismissal failed to meet the two requisites for validity: (1) a just cause under Article 282 of the Labor Code, and (2) due process. Petitioners failed to prove by clear and convincing evidence the alleged dishonesty, as the goods were fully paid through salary deductions and FICCO reported no theft loss. Furthermore, private respondent was not given the required two written notices (notice to explain and notice of termination) before dismissal, violating due process. Under Article 279 of the Labor Code, an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and payment of full backwages from the time compensation was withheld until actual reinstatement. The allegation of bias against the Labor Arbiter was without basis, as the prior case had been amicably settled, and the issue was not raised in earlier proceedings.