G.R. No. 98137 September 15, 1997
PHILIPPINE RABBIT BUS LINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER ROLANDO D. GAMBITO, and REYNATO B. AGUINALDO, respondents.

FACTS

Private respondent Reynato B. Aguinaldo, a bus conductor for Philippine Rabbit Bus Lines, Inc., was placed under preventive suspension on September 18, 1988, following an inspection trip. Inspectors found two unticketed passengers and eight unaccounted bundles of flowers on his bus. Aguinaldo issued tickets for the passengers and paid for the additional freight from his own money. A company memorandum dated September 21, 1988, confirmed his suspension, stated the grounds, and required him to report for investigation. During the investigation on September 26, 1988, Aguinaldo admitted to the violations. After 30 days, he reported for work but was refused entry. He filed a complaint for illegal dismissal on April 26, 1989. A notice of termination dated April 11, 1989, was served on him on May 3, 1989.
The Labor Arbiter found the dismissal illegal due to lack of just cause and due process, ordering reinstatement with full backwages or separation pay. The NLRC affirmed but modified the award to reinstatement with one year of backwages. Petitioner appealed, contending it complied with legal requirements for dismissal, citing Aguinaldo’s past violations and the serious nature of his duties involving fare collection.

ISSUE

Whether the dismissal of Reynato B. Aguinaldo was valid.

RULING

The Supreme Court ruled that the dismissal was for a just cause but was effected without due process. The Court found that Aguinaldo’s negligence in his duties as a conductor, particularly in failing to properly account for passengers and cargo, constituted gross negligence justifying loss of trust and confidence, a valid ground for dismissal under Article 282 of the Labor Code. His admitted violations and prior record supported this finding.
However, the employer failed to comply with procedural due process. The memorandum for investigation did not satisfy the requirement for a written notice stating the specific grounds for termination and giving the employee a reasonable opportunity to respond. Furthermore, his preventive suspension was unlawfully extended beyond the 30-day limit prescribed by the Omnibus Rules without payment of wages. Consequently, while the dismissal was substantively valid, the procedural defect warranted an award of indemnity. In line with social justice, and considering Aguinaldo’s 20 years of service and the absence of serious misconduct reflecting on moral character, the Court awarded separation pay. The NLRC decision was set aside. Petitioner was ordered to pay Aguinaldo P1,000.00 as indemnity for procedural violation and P40,220.00 as separation pay in full settlement of his claims.