due process

Manila Jockey vs Trajano (G.R. No. 160982 June 26, 2013)

Manila Jockey Club Inc vs Trajano
G.R. No. 160982 June 26, 2013

Facts: MJCI had employed Trajano as a selling teller of betting tickets since November 1989. On April 25, 1998, she reported for work. At around 7:15 p.m., two regular bettors gave her their respective lists of bets (rota) and money for the bets for Race 14. Although the bettors suddenly left her, she entered their bets in the selling machine and segregated the tickets for pick up by the two bettors upon their return. Before closing time, one of the bettors (requesting bettor) returned and asked her to cancel one of his bets worth P2,000.00. Since she was also operating the negative machine on that day, she obliged and immediately cancelled the bet as requested. She gave the remaining tickets and the P2,000.00 to the requesting bettor, the money pertaining to the canceled bet. When Race 14 was completed, she counted the bets received and the sold tickets. She found that the bets and the tickets balanced. But then she saw in her drawer the receipt for the canceled ticket, but the canceled ticket was not inside the drawer. Thinking she could have given the canceled ticket to the requesting bettor, she immediately looked for him but could not find him. It was only then that she remembered that there were two bettors who had earlier left their bets with her. Thus, she went to look for the other bettor (second bettor) to ask if the canceled ticket was with him. When she located the second bettor, she showed him the receipt of the canceled ticket to counter-check the serial number with his tickets. Thereafter, the second bettor returned to Trajano and told her that it was one of his bets that had been canceled, instead of that of the requesting bettor. To complicate things, it was also the same bet that had won Race 14. Considering that the bet was for a daily double, the second bettor only needed to win Race 15 in order to claim dividends. At that point, she realized her mistake, and explained to the second bettor that the cancellation of his ticket had not been intentional, but the result of an honest mistake on her part. She offered to personally pay the dividends should the second bettor win Race 15, which the latter accepted. When Race 15 was completed, the second bettor lost. She was thus relieved of the obligation to pay any winnings to the second bettor. To her surprise, the reliever-supervisor later approached Trajano and told her to submit a written explanation about the ticket cancellation incident. The next day (April 26, 1998), she submitted the handwritten explanation to Atty. Joey R. Galit, Assistant Racing Supervisor. She then resumed her work as a selling teller, until later that day, when she received an inter-office correspondence signed by Atty. Galit informing her that she was being placed under preventive suspension effective April 28, 1998, for an unstated period of time. At the end of thirty days of her suspension, Trajano reported for work. But she was no longer admitted. She then learned that she had been dismissed when she read a copy of an interoffice correspondence about her termination posted in a selling station of MJCI.

Issue: Whether or not Trajano is validly dismissed.

Held: No. The valid termination of an employee may either be for just causes under Article 282 or for authorized causes under Article 283 and Article 284, all of the Labor Code.

Specifically, loss of the employer’s trust and confidence is a just cause under Article 282 (c), a provision that ideally applies only to cases involving an employee occupying a position of trust and confidence, or to a situation where the employee has been routinely charged with the care and custody of the employer’s money or property. But the loss of trust and confidence, to be a valid ground for dismissal, must be based on a willful breach of trust and confidence founded on clearly established facts. “A breach is willful,” according to AMA Computer College, Inc. v. Garay, “if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer.” An ordinary breach is not enough.

Moreover, the loss of trust and confidence must be related to the employee’s performance of duties.  As held in Gonzales v. National Labor Relations Commission:

Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. He must be invested with confidence on delicate matters such as the custody, handling, care and protection of the employer’s property and/or funds. But in order to constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer.

As a selling teller, Trajano held a position of trust and confidence. The nature of her employment required her to handle and keep in custody the tickets issued and the bets made in her assigned selling station. The bets were funds belonging to her employer. Although the act complained of – the unauthorized cancellation of the ticket (i.e., unauthorized because it was done without the consent of the bettor) – was related to her work as a selling teller, MJCI did not establish that the cancellation of the ticket was intentional, knowing and purposeful on her part in order for her to have breached the trust and confidence reposed in her by MJCI, instead of being only out of an honest mistake.

The procedure to be followed in the termination of employment based on just causes is laid down in Section 2 (d), Rule I of the Implementing Rules of Book VI of the Labor Code, to wit:

Section 2. Security of Tenure. —
x x x x

(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.
(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.
(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

In case of termination, the foregoing notices shall be served on the employee’s last known address.

A review of the records warrants a finding that MJCI did not comply with the prescribed procedure.

There is no question that an illegally dismissed employee is entitled to her reinstatement without loss of seniority rights and other privileges, and to full back wages, inclusive of allowances and other benefits or their monetary equivalent.

In case the reinstatement is no longer possible, however, an award of separation pay, in lieu of reinstatement, will be justified. The Court has ruled that reinstatement is no longer possible: (a) when the former position of the illegally dismissed employee no longer exists; or (b) when the employer’s business has closed down; or (c) when the employer-employee relationship has already been strained as to render the reinstatement impossible. The Court likewise considered reinstatement to be non-feasible because a “considerable time” has lapsed between the dismissal and the resolution of the case. In that regard, a lag of eight years or ten years is sufficient to justify an award of separation pay in lieu of reinstatement.

Philworth vs PCIB (G.R. No. 161878 June 05, 2013)

Philworth Asia’s Inc vs Philippine Commercial International Bank
G.R. No. 161878 June 05, 2013

Facts: On May 31, 1991, the former Philippine Commercial International Bank (PCIB) sued petitioners in the RTC to recover upon an unpaid debt (Civil Case No. 911536), alleging that on September 22, 1988, petitioner Philworth Asia, Inc. (Philworth) had borrowed P270,000.00 from PCIB to be paid on or before November 8, 1988 in accordance with a promissory note; that petitioners Spouses Luisito and Elizabeth Mactal (Mactals) and Spouses Luis and Eloisa Reyes (Reyeses) had executed a deed of suretyship binding themselves to pay Philworth’s obligations under the promissory note should Philworth refuse to perform its obligation; that Philworth had paid only partially, leaving an unpaid balance of P225,533.33, inclusive of interest and penalty charges; that Philworth had not paid its balance despite repeated demands; and that attempts to collect from the Mactals and Reyeses had likewise failed. On July 5, 1991, the Reyeses filed their answer with special and affirmative defenses, specifically countering that PCIB had no cause of action against them; that Luis Reyes had signed the promissory note as an employee of Philworth, but had not signed the deed of suretyship in November 1988 because he had already resigned from Philworth on October 16, 1988; that Luisito Mactal, the President and General Manager of Philworth, should be the person liable under the deed of suretyship; that PCIB had not made demands upon all the parties; and that PCIB did not exhaust all the available properties of Philworth before bringing the suit also against them. JUNE2013 In their answer filed on August 20, 1991, the Mactals averred that the defendants had substantially paid their obligation, but that PCIB had unreasonably refused to properly account for and credit the payments; that PCIB had been charging exorbitant and unconscionable interest, penalties and other charges; and that if the previous payments were duly credited, the unpaid balance would only be minimal. The first pre-trial conference, which was set on May 19, 1994, was moved several times afterwards, until the parties were notified that the conference would finally be held on April 25, 1995. On April 3, 1995, petitioners sought the transfer of the conference of April 25, 1995 to May 2, 1995. They later on further moved for the conference to be held on May 12, 1995. But no conference was held on May 12, 1995. Instead, the conference was reset on two later dates, i.e., June 2, 1995 and July 21, 1995. Although petitioners again moved to reset the conference on June 1, 1995, the RTC denied petitioners’ motion for postponement on June 2, 1995, and declared them as in default because of their non-appearance and allowed PCIB to present evidence ex parte.

Issue: Whether or not petitioners were denied due process.

Held: No. It is basic that as long as a party is given the opportunity to defend his interest in due course, he would have no reason to complain, for it is this opportunity to be heard that makes up the essence of due process. Where opportunity to be heard, either through oral argument or through pleadings, is accorded there can be no denial of procedural due process. The most basic tenet of due process is the right to be heard. Where a party had been afforded an opportunity to participate in the proceedings but failed to do so, he cannot complain of deprivation of due process.

Due process is satisfied as long as the party is accorded an opportunity to be heard. If it is not availed of, it is deemed waived or forfeited without violating the Bill of Rights.

Petitioners were not denied their right to be heard. As outlined above, the RTC set the case several times for the pre-trial and the trial. In so doing, the RTC undeniably relaxed the rigid application of the rules of procedure out of its desire to afford to petitioners the opportunity to fully ventilate their side on the merits of the case. The RTC thereby acted with liberality. This was in line with the time honored principle that cases should be decided only after giving all the parties the chance to argue and prove their respective sides. Here, however, they apparently stretched the limits of the RTC’s liberality, to the point of abusing it. A review of the proceedings has given the Court the impression that they deliberately delayed the presentation of their evidence by asking postponements of the hearings. The pattern of delay that followed indicated that they did not intend to present any evidence in their favor, and that they were simply temporizing as a way of avoiding the inevitable adverse outcome of the case. Otherwise, they and their counsel would have easily completed the task of presenting their evidence and shunned the delays. They did present Ms. Garcia on direct examination, but they thereafter did not see to the completion of her testimony.