G.R. No. 237166 . March 06, 2019
FIRST GLORY PHILIPPINES, INC., PETITIONER, VS. BRIAN L. LUMANTAO, STEVE J. PETARCO, ROY P. CABATINGAN, AND ZYZAN T. LADRAZO, RESPONDENTS.

FACTS

Petitioner First Glory Philippines, Inc. (FGPI) is a garment manufacturer. Respondents, all sewers and union officers/members, were issued memoranda on August 16, 2013, alleging various offenses. Cabatingan, Petarco, and Ladrazo were accused of manipulating the company’s Radio Frequency Identification (RFID) system to record erroneous high-efficiency ratings, while Lumantao was cited for repetitive poor performance and attendance violations. They were placed under preventive suspension and directed to submit written explanations and attend an investigation. The respondents did not comply, and the Union instead filed a Notice of Strike alleging unfair labor practice. FGPI offered a second chance during conciliation proceedings, but respondents again failed to participate. Consequently, FGPI terminated their employment on September 13, 2013, for the cited violations.
The respondents filed complaints for illegal dismissal and unfair labor practice. The Labor Arbiter and the National Labor Relations Commission (NLRC) dismissed the complaints, upholding the dismissal as valid and for just cause, and finding that procedural due process was observed. The Court of Appeals (CA) reversed the NLRC decision. While it sustained the findings of no unfair labor practice and proper procedural due process, it held that the dismissal was illegal. The CA ruled that FGPI failed to prove that the penalty of dismissal was commensurate to the alleged offenses, particularly for Lumantao, whose infractions pertained to performance and attendance, not fraud.

ISSUE

Whether the Court of Appeals erred in ruling that the respondents were illegally dismissed.

RULING

The Supreme Court denied the petition and affirmed the CA decision, with modification regarding the award of separation pay. The legal logic is anchored on the twin requirements for a valid dismissal: just or authorized cause under Article 282 of the Labor Code, and observance of procedural due process. The Court agreed with the CA that procedural due process was satisfied, as FGPI issued notices, conducted investigations, and provided opportunities to be heard, which the respondents waived.
On substantive due process, the employer bears the burden of proving by substantial evidence that the dismissal was for a just cause and that the penalty was appropriate. For Lumantao, the alleged infractions—poor efficiency and habitual absenteeism/tardiness—constitute neglect of duties. However, the Court found that FGPI failed to establish that these acts were gross and habitual enough to warrant dismissal. The records showed prior disciplinary actions but not that these were for the same offenses culminating in dismissal. Dismissal is a severe penalty, last in the hierarchy of sanctions. For Petarco, Cabatingan, and Ladrazo, the charge was serious dishonesty through RFID manipulation. The Court, however, noted the CA’s finding that FGPI did not sufficiently prove the alleged manipulation was willful or that the system was foolproof. Given the factual findings of the CA, which are generally conclusive, the Court upheld the conclusion that the dismissals lacked sufficient just cause. Consequently, the respondents were illegally dismissed. They are entitled to reinstatement or separation pay and full backwages. Following established jurisprudence, separation pay in addition to backwages may be awarded as an equitable measure where reinstatement is no longer viable, as in this case where the dismissal, though illegal, was not tainted by bad faith.