G.R. No. 220434 July 22, 2019
SM DEVELOPMENT CORPORATION, JOANN HIZON, ATTY. MENA OJEDA, JR., and ROSALINE QUA, Petitioners vs. TEODORE GILBERT ANG, Respondent

FACTS

Respondent Teodore Gilbert Ang was the Project Director of petitioner SM Development Corporation (SMDC). In March 2012, he received a Notice to Explain regarding project costs for the Field Residences, to which he submitted a detailed response. Subsequently, during a meeting, management asked him to resign without stating specific reasons. While on an approved vacation leave, he received messages about an “imminent resignation” and a turnover of functions. Upon his return on April 16, 2012, he was served a Show Cause Notice listing several infractions (e.g., alleged cost overruns, sale of non-existing parking slots) and was placed under a 30-day preventive suspension. He was later dismissed via a termination letter dated May 15, 2012, which referenced administrative hearings on May 7 and 9 that he claims he never received notice for.
The Labor Arbiter and the National Labor Relations Commission (NLRC) dismissed Ang’s complaint for illegal dismissal, finding valid grounds for termination due to gross neglect of duties and loss of trust and confidence. The Court of Appeals (CA) reversed, ruling that Ang was illegally dismissed because the charges were not substantiated and the procedural requirements for dismissal were not observed. The CA ordered his reinstatement with full backwages. Petitioners elevated the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

Whether respondent Teodore Gilbert Ang was illegally dismissed.

RULING

The Supreme Court granted the petition, reversing the CA and reinstating the NLRC decision. The Court held that there was a valid cause for dismissal but a procedural defect. On substantive grounds, Ang, as a Project Director, held a position of trust and confidence. The employer presented substantial evidence, including audit reports and memoranda, demonstrating specific acts constituting gross neglect and breaches justifying loss of trust. These acts, such as the alleged unauthorized expenses and mismanagement leading to financial exposure, were directly related to his functions and were not mere errors in judgment.
Procedurally, however, the employer failed to comply with the twin-notice requirement. The termination letter referenced administrative hearings of which Ang had no notice, violating his right to be heard. Nevertheless, jurisprudence establishes that where dismissal is for a just cause, the failure to observe due process does not render the termination illegal but results in liability for nominal damages. Consequently, the dismissal is upheld as valid, but petitioners are ordered to pay Ang nominal damages of ₱30,000.00 for the procedural lapse. The award of backwages and reinstatement ordered by the CA is set aside.