G.R. No. 204620. July 11, 2016.
ROWENA A. SANTOS, PETITIONER, VS. INTEGRATED PHARMACEUTICAL, INC. AND KATHERYN TANTIANSU, RESPONDENTS.

FACTS

Petitioner Rowena A. Santos was employed as a Clinician by respondent Integrated Pharmaceutical, Inc. On April 6, 2010, she received a memorandum from her supervisor concerning her failure to remit collections and return a demonstration unit. Subsequently, on April 19, 2010, she was called to a meeting where she was confronted about allegedly padding her transportation expense report. On April 21, 2010, respondents attempted to serve a “Memo on Padding of Expense Report,” charging her with coercion and insubordination and requiring a written explanation, but she refused to accept it. She later received via registered mail a “Termination of Employment” memorandum dated the same day, which listed five infractions, including the padding of expenses, coercion, unpleasant attitude, failure to remit collections, and insubordination, as grounds for her dismissal.
Santos filed a complaint for illegal dismissal. The Labor Arbiter ruled in her favor, finding that the termination was illegal due to the employer’s failure to comply with the two-notice requirement and lack of just cause. The National Labor Relations Commission (NLRC) affirmed this decision. The Court of Appeals (CA), however, reversed the NLRC, holding that there was just cause for dismissal but that procedural due process was not observed.

ISSUE

Whether the dismissal of petitioner Santos was valid, considering the presence of a just cause and the alleged non-compliance with procedural due process requirements.

RULING

The Supreme Court affirmed the CA’s ruling that the dismissal was for a just cause but procedurally infirm. The Court found that Santos committed serious misconduct, specifically dishonesty in padding her expense report, which constitutes a valid ground for termination under Article 282 of the Labor Code. The act of falsifying a claim for reimbursement is a breach of trust that strikes at the heart of the employer-employee relationship.
However, the Court held that the employer failed to comply with the procedural due process requirements outlined in the Labor Code. The two-notice rule was not strictly followed. The first notice (the April 21 memo) was not properly served as Santos refused to accept it, and the subsequent termination notice did not provide her with a real opportunity to be heard. Following the doctrine established in Agabon v. NLRC, the dismissal based on a just cause remains valid, but the employer is liable for nominal damages for its failure to observe the proper procedural steps. The Court awarded Santos nominal damages in the amount of Thirty Thousand Pesos (P30,000.00) for this violation. The award of separation pay and backwages was correctly deleted by the CA, as the dismissal was for a just cause. The decision underscores the distinction between substantive and procedural aspects of dismissal, where a just cause validates the termination but procedural lapses incur a monetary penalty.