G.R. No. L-57268, March 25, 1988
MANILA MIDTOWN COMMERCIAL CORPORATION, petitioner, vs. NUWHRAIN (Ramada Chapter), ALBERTO MASANGKAY, and HON. VICENTE LEOGARDO, JR., Deputy Minister, Ministry of Labor and Employment, respondents.

FACTS

Petitioner Manila Midtown Commercial Corporation, owner of the Manila Midtown Ramada Hotel, placed its employee, private respondent Alberto Masangkay, under preventive suspension on February 13, 1980, on grounds of loss of trust and confidence. The company alleged Masangkay was criminally involved in several hotel room burglaries occurring between January 1979 and February 1980, primarily because the incidents happened in rooms assigned to him. The company filed a formal application for clearance to suspend and terminate Masangkay with the Ministry of Labor and Employment (MOLE). Masangkay and his union contested this application. The MOLE Director initially dismissed the complaint and granted the clearance application.
On appeal, Deputy Minister Vicente Leogardo, Jr. reversed the Director’s order. He found that the company had conducted four investigations into the burglaries from January 1979 to January 1980, all of which yielded no evidence linking Masangkay to the crimes. The Deputy Minister noted that other employees also had access to the rooms but were not investigated. He thus ordered Masangkay’s reinstatement with full backwages. The company’s motion for reconsideration was denied, prompting this petition for certiorari. The company later raised, for the first time in its motion for reconsideration before the Deputy Minister, additional allegations that Masangkay had violated house rules through tardiness and absences.

ISSUE

Whether the dismissal of Alberto Masangkay on the grounds of loss of trust and confidence was valid.

RULING

The Supreme Court dismissed the petition and affirmed the Deputy Minister’s orders with modifications. The legal logic is clear: for dismissal based on loss of trust and confidence to be valid, it must be substantiated by substantial evidence of breach of trust. The Court upheld the Deputy Minister’s factual finding that the company’s investigations produced no evidence connecting Masangkay to the burglaries. Mere suspicion or the circumstance that the incidents occurred in his assigned rooms, without proof, is insufficient to establish a just cause for dismissal. The failure to investigate other personnel with similar access further weakened the company’s claim.
Regarding the new grounds of tardiness and absences raised belatedly, the Court ruled that the company was precluded from introducing them at that late stage. These allegations were not part of the original clearance application and were not passed upon by the labor tribunals. A party cannot amend its cause of action on appeal to include new grounds for termination. Consequently, the dismissal was illegal. The Court awarded three years of backwages without deduction. However, due to the sensitive nature of a roomboy’s position, reinstatement was ordered to a reasonably equivalent non-sensitive position. If no such position is available or acceptable, separation pay equivalent to one-half month’s salary per year of service, computed from his hiring in 1977 until three years after his illegal dismissal in 1980, shall be paid in lieu of reinstatement.