G.R. No. L-70688 January 7, 1987
ROMULO J. FUENTEBELLA and JOSE ANGELO LLANEZA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, HI MARKETING CORPORATION, MANUEL H. PUEY and RIBOLU D. TERRE, respondents.

FACTS

Petitioners Romulo J. Fuentebella and Jose Angelo Llaneza were a salesman and a sales supervisor, respectively, for respondent Hi Marketing Corporation (HIMARK). On August 13, 1982, their manager, respondent Ribolu Terre, abruptly ordered them to submit their resignations without stating any cause, pending an audit. Fuentebella, who had collected P6,000.00 from a customer that same week, informed management he would withhold this remittance until his status and his claim for unpaid commissions were clarified. Llaneza, upon being asked to surrender his provisional receipts, inquired in writing about the reason but received no follow-up demand for their return.
Subsequently, the company comptroller offered petitioners separation pay in exchange for their resignations and the return of the P6,000.00 and receipt booklets. They refused, insisting on a formal investigation. Instead, they were served termination letters dated August 31 and September 1, 1982. They filed a complaint for illegal dismissal. The Labor Arbiter ruled in their favor, but the NLRC reversed, sanctioning the dismissal.

ISSUE

Whether the dismissal of petitioners Fuentebella and Llaneza was valid.

RULING

The Supreme Court ruled the dismissals were illegal. The legal logic centers on the absence of a just or authorized cause for termination and the failure to observe due process. For a dismissal to be valid, it must be for a just or authorized cause under the Labor Code and the employee must be afforded procedural due process, including notice and hearing. Here, the employer failed on both counts.
The Court found that the alleged grounds—Fuentebella’s withholding of the P6,000.00 collection and Llaneza’s failure to immediately surrender receipt booklets—were not valid causes. Fuentebella’s act was a protective measure, motivated by the company’s unexplained order for his resignation and its failure to pay his substantial accrued commissions. No demand for the remittance was made prior to his termination; thus, his withholding did not constitute willful disobedience or breach of trust. Llaneza’s written query about the receipts was a reasonable response, and the company’s subsequent inaction negated any claim of insubordination. The Court saw the dismissals as retaliatory, triggered by petitioners’ refusal to accede to an unlawful demand from their manager for a share of their commissions. Consequently, the NLRC decision was set aside and the Labor Arbiter’s ruling reinstated, declaring the dismissals illegal.