G.R. No. 162871 ; January 31, 2007
NORSK HYDRO (PHILS.), INC. and HANS T. NEVERDAL, Petitioners, vs. BENJAMIN S. ROSALES, JR., Respondent.

FACTS

Respondent Benjamin Rosales, Jr., an Operations Manager for petitioner Norsk Hydro, was tasked to find land for a company facility. He identified a property and relayed the broker’s price terms to company president Hans Neverdal, who approved the purchase. Two years later, a different broker, Pepito Abecia, wrote to Neverdal alleging that Rosales conspired with other brokers to overprice the land, with each receiving a markup commission. Abecia executed an affidavit and filed a criminal complaint, claiming he exposed the scheme after being denied his share. Consequently, Norsk Hydro served Rosales a show-cause memorandum for serious misconduct, placed him under preventive suspension, and scheduled an administrative hearing. Rosales requested access to documents and an extension to prepare his defense, which he claimed were ignored. After the hearing, he was dismissed for loss of trust and confidence.
Rosales filed an illegal dismissal complaint. The Labor Arbiter and the NLRC upheld the dismissal, finding Abecia’s affidavit a credible basis for loss of trust and that due process was observed. The Court of Appeals reversed, ruling the dismissal illegal due to lack of substantial evidence of Rosales’s participation and a denial of due process, as his requests to examine evidence were not granted.

ISSUE

Whether the Court of Appeals erred in finding that Rosales was illegally dismissed for lack of just cause and due process.

RULING

Yes, the Supreme Court reversed the Court of Appeals and reinstated the NLRC decision. On the substantive aspect, loss of trust and confidence is a valid ground for dismissing a managerial employee. The employer’s evidence need only show a reasonable basis for the loss of confidence, not proof beyond reasonable doubt. Abecia’s detailed affidavit, a declaration against his own interest which lent it credibility, provided substantial evidence that Rosales participated in a scheme detrimental to the company. This constituted a sufficient basis for Norsk Hydro to lose trust in its manager.
On procedural due process, the twin-notice requirement was satisfied. Rosales received a show-cause memorandum detailing the charges and was given 72 hours to explain. He was also notified of and attended an administrative hearing where he was furnished copies of the incriminating documents. His failure to submit a written explanation or present evidence during the hearing was his own choice. The company evaluated the case based on the available evidence, including Abecia’s affidavit. The Court found no violation of Rosales’s right to be heard, as the opportunity was provided; he simply did not avail himself of it effectively. Therefore, his dismissal was for a just cause and effected with due process.