G.R. No. 78763 July 12, 1989
MANILA ELECTRIC COMPANY, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION, and APOLINARIO M. SIGNO, respondents.

FACTS

Private respondent Apolinario M. Signo was employed by petitioner Manila Electric Company (Meralco) as a supervisor-leadman from 1963 until his termination on May 18, 1983. In 1981, Signo facilitated the electrical service application of Fernando de Lara for a residence located beyond Meralco’s serviceable area. Signo received P7,000.00 from de Lara and, with other employees, made it appear the application was for a sari-sari store within the serviceable zone to expedite the illegal installation. Due to a company fault, de Lara was not billed for over a year. Meralco investigated and found Signo responsible for the irregularities, leading to his dismissal for serious misconduct and breach of trust.
Signo filed a complaint for illegal dismissal. The Labor Arbiter found him guilty of violating company rules, specifically soliciting benefits for a prejudicial act and inducing others to violate rules, offenses punishable by reprimand to dismissal. However, considering his 20 years of unblemished service with commendations and that this was his first offense, the Arbiter deemed dismissal too drastic. He ordered Signo’s reinstatement without backwages. The National Labor Relations Commission affirmed this decision.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the Labor Arbiter’s decision ordering the reinstatement, without backwages, of an employee found guilty of breach of trust and violation of company rules.

RULING

The Supreme Court dismissed the petition and affirmed the NLRC resolution. The legal logic balances the employer’s right to dismiss for just cause against the principles of social justice and the state’s duty to protect labor. While an employer can dismiss an employee for just causes like serious misconduct or breach of trust under Article 282 of the Labor Code, this right is not absolute and is subject to the state’s police power aimed at preserving workers’ livelihoods.
The Court acknowledged that Signo’s acts constituted a valid ground for dismissal, as they involved soliciting money for an act prejudicial to the company and inducing violations, which eroded trust. However, the penalty must be commensurate. Citing precedents like Itogon-Suyoc Mines, Inc. v. NLRC, the Court held that dismissal is too severe a penalty for a long-term employee with a previously unblemished record of 20 years, absent a showing that his continued employment would oppress the employer or lead to its self-destruction. The ruling applies Article 4 of the Labor Code, which mandates that all doubts in interpretation be resolved in favor of labor. Thus, compassionate justice warranted reinstatement as a lesser penalty. The denial of backwales recognized the employer’s good faith in initiating the dismissal based on a legitimate cause. The temporary restraining order was lifted.