GR 165153; (August, 2010) (Digest)
G.R. No. 165153 ; August 25, 2010
CARLOS DE CASTRO, Petitioner, vs. LIBERTY BROADCASTING NETWORK, INC. and EDGARDO QUIOGUE, Respondents.
FACTS
Petitioner Carlos de Castro was dismissed from his position as chief building administrator at respondent Liberty Broadcasting Network, Inc. (LBNI) on grounds of serious misconduct, fraud, and loss of trust. LBNI alleged multiple acts, including soliciting commissions from suppliers, theft of company property, and abusive behavior towards co-employees. De Castro filed a complaint for illegal dismissal. The Labor Arbiter ruled in his favor, a decision initially reversed but later reinstated by the NLRC, which found the charges unsubstantiated. The Court of Appeals reversed the NLRC, upholding the dismissal. In a Decision dated September 23, 2008, the Supreme Court granted de Castro’s petition, reinstating the NLRC resolution and finding the dismissal illegal due to unsubstantiated charges.
LBNI filed a Motion for Reconsideration, arguing it had valid grounds for dismissal based on loss of trust and that the witness affidavits should not have been disregarded. Crucially, LBNI also moved to suspend proceedings, citing a Stay Order issued by the RTC of Makati in August 2005 in relation to corporate rehabilitation proceedings it had initiated.
ISSUE
The primary issue is whether the Motion for Reconsideration of the September 23, 2008 Decision should be granted. Subsidiarily, whether the execution of the judgment in favor of de Castro should be suspended due to LBNI’s corporate rehabilitation.
RULING
The Supreme Court denied the Motion for Reconsideration and affirmed its prior Decision. On the substantive merits, the Court found no compelling reason to reverse its finding of illegal dismissal. The charges against de Castro remained doubtful and unsubstantiated. Key witness Jose Aying had recanted his affidavit, while other witnesses were company employees who had prior altercations with de Castro. Applying Article 4 of the Labor Code, all doubts are resolved in favor of labor. The Court reiterated that loss of trust and confidence, to be a valid cause for dismissal, must be based on willful breach founded on substantial evidence, which LBNI failed to establish.
However, the Court granted the plea to suspend the execution of the judgment due to the corporate rehabilitation proceedings. Pursuant to the Interim Rules on Corporate Rehabilitation, the enforcement of all claims against a corporation under rehabilitation is suspended upon issuance of a Stay Order. This includes monetary claims from labor cases. The NLRC was thus directed to suspend execution until the Stay Order is lifted or the rehabilitation proceedings are terminated. To balance interests, LBNI was ordered to submit quarterly reports on its rehabilitation status to the NLRC, subject to contempt for non-compliance.