G.R. No. L-50150. May 3, 1979.
CENTRAL TEXTILE MILLS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and DANIEL CORPUZ, respondents.

FACTS

Petitioner Central Textile Mills, Inc. dismissed private respondent Daniel Corpuz, an overseer, based on an accusation of theft. The charge was investigated by the Quezon City Fiscal’s Office, where two Assistant City Fiscals successively recommended the dismissal of the complaint for lack of evidence. Corpuz then filed a case for illegal dismissal. The Labor Arbiter ruled in his favor, a decision affirmed by the National Labor Relations Commission (NLRC), which ordered reinstatement. The NLRC found the accusation of theft to be a “bankrupt assertion” unsupported by proof.
The employer, petitioner Central Textile Mills, filed this petition for certiorari, arguing that the NLRC decision was arbitrary and violated due process. It further contended that even assuming the theft was unproven, the dismissal was still justified by a loss of confidence in Corpuz, allegedly a managerial employee.

ISSUE

Whether the dismissal of Daniel Corpuz was legal, and whether the NLRC correctly ordered his reinstatement.

RULING

The Supreme Court dismissed the petition and upheld the NLRC’s decision ordering reinstatement. The legal logic is anchored on the constitutional guarantee of security of tenure. First, the Court found no arbitrariness or denial of due process. The NLRC did not merely rely on the Fiscal’s findings; it conducted its own compulsory arbitration where both parties adduced evidence, and petitioner fully availed of appellate remedies. The factual finding that the theft charge was unsubstantiated is thus conclusive.
Second, the Court rejected the alternative justification of loss of confidence. Citing Philippine Air Lines, Inc. v. Philippine Airlines Employees Association, the Court ruled that loss of confidence cannot be invoked as a vague, all-encompassing pretext to circumvent security of tenure, especially where, as here, the alleged cause (theft) has been definitively disproven. To allow dismissal based on an unsubstantiated charge repackaged as “loss of confidence” would render the constitutional protection meaningless. The Court clarified that while loss of confidence may be valid for managerial employees under certain circumstances, petitioner failed to substantiate that Corpuz held such a rank with powers like hiring and firing. Therefore, the order of reinstatement stands as a necessary enforcement of the worker’s right to security of tenure. The decision was immediately executory.