G.R. No. 240184. July 06, 2022
MUSAHAMAT WORKERS LABOR UNION-1-ALU, PETITIONER, VS. MUSAHAMAT FARMS, INC. FARM 1, RESPONDENT.

FACTS

The case involves the termination of five watchmen (Ernesto Suril, Jr., et al.) by Musahamat Farms, Inc. On February 14, 2016, the watchmen protested their reassignment to farm operations. The following day, several banana bunches were chopped down on the farm. The respondent initiated an investigation and subsequently issued notices of preventive suspension to the watchmen. After concluding its investigation, the respondent terminated the watchmen’s employment on April 12, 2016, citing serious misconduct and loss of trust and confidence, alleging they were responsible for the vandalism.
The Voluntary Arbitrator ruled the dismissal illegal, finding the evidence against the watchmen—primarily affidavits from witnesses who allegedly overheard them planning the act—insubstantial. The Arbitrator also held that procedural due process was violated, as the suspension notices did not specify the charges; these were only detailed in the termination letter. The Court of Appeals reversed this decision. It gave credence to the witness affidavits as circumstantial evidence and found substantial compliance with due process, reasoning the watchmen were aware of the accusations against them during the investigation.

ISSUE

The core issue is whether the Court of Appeals erred in reversing the Voluntary Arbitrator’s finding that the dismissal of the watchmen was illegal, both on substantive (existence of just cause) and procedural (observance of due process) grounds.

RULING

The Supreme Court granted the petition, reinstated the Voluntary Arbitrator’s decision, and declared the dismissals illegal. On substantive grounds, the Court held the employer failed to prove by substantial evidence that the watchmen committed the alleged misconduct. The relied-upon affidavits constituted hearsay, as the affiants did not testify and were not cross-examined. The claim that a witness identified the watchmen in a meeting was uncorroborated and insufficient. For a dismissal based on loss of trust and confidence, the breach must be willful, deliberate, and proven by the employer. Mere suspicion or circumstantial evidence, especially of this weak character, does not suffice.
On procedural grounds, the Court ruled the employer failed to observe the twin-notice requirement. The first notice (the preventive suspension notice) did not inform the employees of the specific charges, depriving them of a meaningful opportunity to prepare their defense. The charges were only specified in the termination notice itself. This sequence violated the fundamental requirement of providing an employee with clear notice of the accusations and a real opportunity to be heard before termination. Consequently, the dismissals were procedurally infirm. The watchmen were awarded reinstatement with full backwages, or separation pay if reinstatement is not viable, and nominal damages for the procedural violation.