G.R. No. L-58004. May 30, 1983.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION and FREE TELEPHONE WORKERS UNION, et al., respondents.

FACTS

The thirteen private respondents were regular employees of PLDT. In February 1979, they were arrested and detained by military authorities under an Arrest, Search and Seizure Order (ASSO) issued by the Minister of National Defense. The arrest stemmed from suspicions of their involvement in a “telehygienic” racket, where telephone subscribers were allegedly coerced into buying hygienic mouthpieces under threat of service disruption. PLDT, citing this arrest and detention, placed the employees under preventive suspension effective the dates of their arrest and subsequently filed an application for clearance to dismiss them on grounds of serious misconduct and willful breach of trust.
The private respondents, after their release from detention, reported for work but were refused admission. They then filed a complaint for illegal dismissal. The Labor Arbiter denied PLDT’s application for clearance and ordered the reinstatement of the employees with full backwages. This decision was affirmed by the National Labor Relations Commission (NLRC). PLDT petitioned the Supreme Court, arguing the Labor Arbiter and NLRC committed grave abuse of discretion, contending the arrest provided sufficient basis for dismissal and that it had lost trust and confidence in the employees.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the Labor Arbiter’s decision which denied PLDT’s application for clearance to dismiss the employees and ordered their reinstatement with backwages.

RULING

The Supreme Court dismissed the petition and affirmed the NLRC’s decision, with modification on the backwages award. The Court held there was no grave abuse of discretion. While serious misconduct and willful breach of trust under Article 283 of the Labor Code are valid grounds for dismissal, the employer bears the burden of proving these grounds by substantial evidence. PLDT failed to discharge this burden.
The record was devoid of competent evidence proving the employees’ actual participation in the alleged racket. PLDT relied solely on the fact of their military arrest and detention, without conducting its own independent investigation. Notably, the military authorities did not present any finding of guilt, and the Office of the City Fiscal, after preliminary investigation, found no probable cause to file criminal charges for Malicious Mischief or Obstruction to Means of Communication against the employees. The investigating fiscal explicitly noted the absence of any witness to identify the respondents and that the case rested on mere assumptions.
Therefore, PLDT’s alleged loss of confidence was unsubstantiated. The constitutional right to security of tenure under Article 280 of the Labor Code protects employees from dismissal without just or authorized cause. Since no valid cause was proven, the dismissal was illegal, warranting reinstatement. However, considering the employees had been laid off for over four years and were not precluded from other gainful employment, the Court modified the backwages award to be limited to two years without deductions.