G.R. No. 84974 May 8, 1992
Benguet Corporation, petitioner, vs. The Honorable National Labor Relations Commission (Fourth Division) and Pablo Coralis, respondents.

FACTS

Private respondent Pablo Coralis was employed as a miner by petitioner Benguet Corporation since July 6, 1976. He was dismissed on December 3, 1984, for “highgrading,” or theft of gold ore. The notice of dismissal stated that on November 13, 1984, he was caught picking out and collecting pieces of high-grade ore inside a stope in the Acupan Mines, which was not his assigned workplace. He signed a statement admitting guilt during an investigation on the same day. On December 28, 1984, Coralis filed a complaint for illegal dismissal. He later submitted an affidavit claiming he was made to sign the confession without understanding its contents and upon assurances of being allowed to return to work. Executive Labor Arbiter Norma Olegario rendered a decision on September 8, 1987, finding the dismissal was for cause and dismissing the complaint for lack of merit. However, she granted Coralis separation pay for six years of service as a mitigating measure. Benguet Corporation appealed to the NLRC, contesting only the award of separation pay, arguing that since the dismissal was for just cause, no separation pay was owed. Coralis did not appeal the finding of lawful dismissal. The NLRC, in its decision of May 31, 1988, reversed the Arbiter’s decision, held that Coralis was illegally dismissed, and ordered his reinstatement with back wages and seniority rights, or separation pay if reinstatement was impracticable.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion by reviewing and reversing the Labor Arbiter’s finding that Coralis was lawfully dismissed, despite that finding not being raised as an issue in the appeal filed by Benguet Corporation.

RULING

Yes. The Supreme Court reversed and set aside the decision of the NLRC. The Court held that the NLRC committed grave abuse of discretion by reviewing and reversing the Labor Arbiter’s finding on the legality of dismissal, which was not appealed by Coralis and was not the issue raised in Benguet Corporation’s appeal. Under the applicable NLRC Rules at the time, once an appeal is perfected, issues not raised on appeal become final and executory, and the Commission is limited to reviewing only the specific issues elevated on appeal. The only issue properly before the NLRC was the propriety of awarding separation pay despite a finding of lawful dismissal. Applying prevailing doctrine, specifically Philippine Long Distance Telephone Co. vs. NLRC, the Court ruled that separation pay is not allowed as a measure of social justice when an employee is validly dismissed for causes reflecting on moral character, such as serious misconduct like theft. Therefore, the award of separation pay by the Labor Arbiter was erroneous. The Supreme Court reinstated the Labor Arbiter’s decision only insofar as it upheld the validity of Coralis’ dismissal, and struck down the award of separation pay.