GR 211185; (December, 2020) (Digest)
G.R. No. 211185, December 09, 2020
JIMMY PAEZ, PETITIONER, VS. MARINDUQUE ELECTRIC COOPERATIVE, INC., WILLIAM BOBIS, BEETHOVER AREVALO, JOEL PALATINO, AND CARMENCITA GAAN, RESPONDENTS.
FACTS
Petitioner Jimmy Paez was a Sub-Office Chief of respondent Marinduque Electric Cooperative, Inc. (MARELCO) with 21 years of service. In 2004, MARELCO investigated irregularities in its Smart and Globe cell site projects, including illegal power connections. An Ad-hoc Committee invited Paez to explain who ordered the energization of a specific Globe cell site. Paez stated the approval came from someone in the Technical Services Department via telephone, but he could not identify the person. He subsequently failed to attend further investigation hearings.
MARELCO placed Paez on floating status, accusing him of concealing information amounting to collusion or conflict of interest, and later terminated his employment on March 21, 2005. Paez filed a complaint for illegal dismissal. The Labor Arbiter dismissed the complaint, finding just cause for dismissal due to serious misconduct and breach of trust. The National Labor Relations Commission (NLRC) reversed this, ruling the dismissal illegal, as Paez’s failure to identify a person did not constitute fraud or dishonesty warranting termination.
ISSUE
Whether the Court of Appeals erred in reversing the NLRC and ruling that petitioner Jimmy Paez was validly dismissed on the ground of loss of trust and confidence.
RULING
The Supreme Court granted the petition, reversed the Court of Appeals, and reinstated the NLRC Decision. The Court held that while Paez committed an infraction by approving the energization without ensuring proper procedure and by being evasive during the investigation, his outright dismissal was not commensurate with the offense. Loss of trust and confidence must be based on willful breach founded on clearly established facts. Paez’s act of energizing the site, believing documents were complete and payments made, and his subsequent inconsistent statements, did not rise to the level of willful dishonesty or deliberate deceit required for dismissal on this ground.
Crucially, the Court emphasized the principle of proportionality in imposing penalties. Considering Paez’s 21 years of unblemished service and the absence of any prior infraction, the penalty of dismissal was too severe. The NLRC’s finding of illegal dismissal, supported by substantial evidence, was thus reinstated. The employer’s prerogative to dismiss must be exercised humanely and with due regard to the employee’s length of service and record.