G.R. No. 108444

Manila

FIRST DIVISION

G.R. No. 108444 November 6, 1997

JESUS B. FERNANDEZ, petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION and MANILA ELECTRIC COMPANY, respondents.

G.R. No. 108769 November 6, 1997

MANILA ELECTRIC COMPANY, petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION and JESUS B. FERNANDEZ, respondents.

KAPUNAN, J.:

Separate petitions for certiorari under Rule 65 were filed by the parties in this illegal dismissal case questioning the Decision of the National Labor Relations Commission (NLRC) dated December 28, 1992 and its Resolution dated January 27, 1993 denying the motions for reconsideration filed by both parties.

As culled from the records, the facts are as follows:

Jesus Fernandez was hired on April 30, 1965 as an Electrical Engineer by the Manila Electric Company (MERALCO). In January, 1986, he was promoted to Senior Branch Engineer at the San Juan Branch, Metro Manila, of MERALCO whose duty was to ensure the proper and orderly disposition of all applications for installation of electric service within the area of responsibility of MERALCO's San Juan Office.

On October 6, 1986, MERALCO received a letter, through its administrative officer, from Mariano Caballero of Dan-Dan Enterprises, complaining that Felipe Rondez, the Senior Branch Fieldman of the San Juan office and a subordinate of Fernandez was exacting "grease money" from him for the facilitation of their application for electric installation at their apartment building at 85 Apo Street, Mandaluyong, Metro Manila.

Acting on Caballero's complaint, MERALCO arranged with police authorities to entrap Rondez.

On October 10, 1986, the entrapment was scheduled. There was a last minute change of venue from Paisano Restaurant to Barrio Fiesta Restaurant along EDSA, Quezon City where Felipe Rondez, Jesus Fernandez and a certain Angelito Licuanan had lunch. They were joined in by Mariano Caballero and another man. Shortly after lunch was served, Mariano Caballero excused himself which turned out to be a pre-arranged signal to effect the arrest. Plainclothesmen arrived and started frisking the three men. The frisking stopped when one of the lawmen recovered from Rondez a wad of P100.00 bills in the amount of P2,000.00 just handed to him by Mariano Caballeros as "grease money." All three were then brought to Karingal Polices Station at Sikatuna Village and later transferred to the South Police District at Fort Bonifacio where they were detained up to the evening of October 11, 1986.

Thereafter, a criminal case for estafa was filed by Mariano Caballero against Rondez. A separate criminal complaint, also for estafa, was filed against Fernandez, Licuanan, one Manolo Argabioso and his wife, Annabelle, before the Mandaluyong Branch of the Office of the Provincial Fiscal of Rizal.

Fernandez was then placed under preventive suspension by MERALCO and investigated for his alleged involvement in the extortion.

In the course of the administrative investigation by the Special Presidential Committee of MERALCO, it was discovered that Fernandez had previously approved the application for four (4) electric meters of a certain Janet Ley in violation of MERALCO's policy prohibiting the splitting of electrical loads for a single dwelling unit.

On March 18, 1987, Fernandez sought a dismissal of the aforesaid administrative case against him for dishonesty in view of a Resolution dated February 24, 1987 of the Provincial Fiscal of Pasig dismissing the complaint for estafa filed against Fernandez by Caballero for insufficiency of evidence.1

On August 6, 1987, MERALCO, acting on the recommendation of its Special Presidential Committee and Legal Services Department dismissed Fernandez on grounds of serious misconduct resulting in loss of confidence with forfeiture of all rights and privileges. Specifically, Fernandez allegedly violated paragraphs 8 and 11 of Section 7 of MERALCO's Code on Employee Discipline, to wit:

Sec. 5. Failure to comply with official orders and/or perform regular assigned duties or specific instructions related to assigned duty.

Penalty: Reprimand to dismissal, depending upon the gravity of the offense.2

x x x x x x x x x

Sec. 7, par. 8 — Soliciting or receiving money, gift, percentage or benefits from any person, personally or through mediation of another to perform an act prejudicial to the Company.

Penalty: Dismissal.

Sec. 7, par. 11. — All other acts of dishonesty which cause or tend to cause prejudice to the company.

Penalty: Subject to disciplinary action depending upon the gravity of the offense.3

On August 20, 1987, Fernandez filed a complaint for illegal dismissal with claims for moral and exemplary damages.

On April 15, 1991, not finding substantial evidence to support the claim for loss of trust and confidence, the Labor Arbiter ruled in favor of Fernandez. The dispositive portion of the decision reads, as follows:

WHEREFORE, premises considered, the respondent is hereby declared guilty of illegal dismissal and is hereby ordered to:

1. Reinstate the complainant to his former position and to pay him full backwages and other benefits without loss of seniority right.

2. Pay the complainant moral damages in the amount of P 100,000.00.

3. Pay the complainant exemplary damages in the amount of P50,000.00; and

4. Pay the complainant attorney's fee equivalent to 25% of the judgment award.4

MERALCO appealed to the NLRC.

On December 28, 1992 the NLRC ruled otherwise and found just cause for Fernandez's dismissal. Thus:

WHEREFORE, premises considered, the assailed decision of 15 April 1991 in this case is hereby Vacated and Set Aside and a new judgment entered, ordering respondent Manila Electric Company, to pay complainant Jesus (B) Fernandez, the grand total sum (of) One Hundred Twenty Thousand, Five Hundred Fifty-Two and 80/100 (P120,552.80) Pesos, Philippine Currency broken down as follows:

1. separation pay P 96,060.80;

2. emergency cost of living allowance while on payroll reinstate- ment pending appeal 5,490.00;

3. One (1) month pay mid-year bonus 7,601.00;

4. Proportionate 13th month pay for the period corresponding to his payroll reinstate- ment pending appeal 11,401.00

Grand Total
P120,552.80

The rest of complainant's claim for want of merit are hereby Dismissed.5

Unsatisfied, both Fernandez and MERALCO appealed the decision of the NLRC, docketed as G.R. Nos. 108444 and 108769, respectively. On May 5, 1993, this Court consolidated the two petitions.6

It is the rule that judicial review of labor cases does not go so far as to evaluating the sufficiency of evidence on which labor officials' findings rest.7 But when the findings of the Labor Arbiter and the NLRC are contradictory to each other, then we are constrained to examine the evidence presented. In the case at bar, we are more in accord with the findings of the Labor Arbiter.

Fernandez was dismissed by MERALCO for an alleged wilful breach of trust and confidence based on two (2) grounds:

1) Soliciting or receiving money from any person, personally or through the mediation of another to perform an act prejudicial to the Company (Sec. 7, Par. 8, Company Code on Employee Discipline).

2) Load Splitting which is tantamount to failure to comply with official orders and/or to perform regular assigned duties or specific instructions related to duty (Sec. 5, Par. B(6) Code on Employee Discipline).

(Letter of Termination dated August 6, 1987 Exhibit "P" for petitioner).8

Breach of trust has been recognized as a valid cause for dismissal of employees holding positions of trust and confidence and it is the breach of this trust that results in the petitioner's loss of confidence.9 While this ground has been used by employers, the Court must once again remind that such ground must not be availed of as a subterfuge for causes which are unjustified because what is at stake is the means of livelihood and the employee's name and reputation. There must be an actual breach of duty founded on clearly established facts sufficient to warrant the petitioner's separation from work.10 In the instant case, we find no substantial basis for Fernandez's dismissal on the ground of loss of trust and confidence.

The NLRC ruled that Fernandez was in conspiracy with Rondez in an extortion scheme to the prejudice of MERALCO considering that Fernandez was with Rondez at the Barrio Fiesta having lunch with Caballero at the time of the alleged "pay-off." To bolster its findings of conspiracy, the NLRC and MERALCO were one m considering that Fernandez's failure to report in his Engineer Survey Report (ESR) the use of an illegal jumper in the premises of Dan-Dan Enterprises was in pursuance of the extortion scheme of Rondez. Added to this was Caballero's sworn statement made on October 15, 1985 which reads in part:

T 9 — Maari bang sabihin mo kung ano-ano (sic) ang inyong napag-usapan noong magkakaharap kayo sa Barrio Fiesta nina Jesus Fernandez at Felipe Rondez at isa pang electrician?

S — Bukod doon sa hinihingi nilang P2,000.00 na ibinigay ko naman ay mayroon pa silang isang proposal tungkol din doon sa opisina. Ang sabi nila na ang opisina ay mayroon apat na aircon at itong mga aircon ay naka-jumper na sa loob ng isang taon hanggang ngayon. Ang gusto nila itong paggamit namin ng 4 na aircon ay ibi-bill kami sa loob ng isang taon sa halagang P1,000.00 bawat aircon isang buwan. Kaya ang sabi nila para hindi kami mahirapan sa pagbayad sa buong halaga ay sina na lang ang aayos sa kondisyon na magbibigay ng 1/4 ng total na kabayaran at sila na ang aayos sa loob. (p. 320, Records, Exh. 26-B.)11

This conspiracy theory does not hold.

While it is true that in conspiracy, direct proof is not essential, it must however, be shown that it exists as clearly as the commission of the offense itself.12 There must at least be adequate proof that the malefactors had come to an agreement concerning the commission of a felony and decided to commit it.13

In the case at bar, it was Rondez who was found to have the marked money in his possession. Unfortunately, Fernandez happened to have lunch with him at that time but his mere presence at the scene of the entrapment does not necessarily imply conspiracy.14 The Labor Arbiter was correct in stating that:

. . . . While it may be true that the complainant was arrested with the acknowledged perpetrator of the extortion ploy, Felipe Rondez, it was just a classic and ironic case of the complainant being at the right place at the wrong time. Jesus Fernandez was at the right place, the Barrio Fiesta Restaurant to take his lunch. He was there at the wrong time for it was the precise moment when the respondent decided to arrest the extortionist demanding "grease money" from Caballero of Dan-Dan Enterprises. The evidence on record clearly established the absence of conspiracy between Fernandez and Rondez. The spontaneous declaration of Rondez given to the police immediately after their arrest succeeded in persuading this Office that the complainant was just an innocent pawn in the dangerous game of extortion conceived and perpetrated by Rondez (p. 4 Exhibit "G" for the complainant). In another statement made by Rondez the latter confirmed his earlier statement that Fernandez decline the invitation of Caballero for them to have lunch at Paisano Restaurant. . . .

x x x x x x x x x

The respondent theorizes that conspiracy existed between Rondez and the complainant. This theory is premised on the failure of the complainant to explain why Caballero showed up at the Barrio Fiesta at the precise moment Rondez and the complainant were to take their lunch. The answer is glaring in its simplicity. Fernandez cannot be expected to explain something which he does not know of. Lack of knowledge absolves a person from the obligation of explaining. Fiscal Mena Ojeda of the Fiscal's Office of Rizal saw the logic when he opined that such question may be more appropriately answered by Rondez himself and not by Jesus Fernandez. (Exhibit "Q" for the Complainant).15

Neither can we consider Fernandez's failure to report in his Engineer Survey Report (ESR) the use of the illegal jumper in Dan-Dan Enterprises as part of the conspiracy. We give credence to Fernandez's version of the story, to wit:

. . . . [S]ometime in August 1986 acting on the report of Mrs. Beth Hilvano Operating Clerk at Meralco, San Juan Branch, wherein complainant was then Senior Branch Engineer, he inspected the apartment of Mr. Senen Arabaca of Dan-Dan Enterprises consisting of six (6) units. He found a jumper and the line side partly concealed with the conduits embedded in the cement wall. The complainant removed the jumper and advised the caretaker of the premises one Celso Bianan to expose the conduits and renew the Certificate of Electrical Inspection (CEI). The complainant further advised him that the names of actual occupants of the apartment units should be reflected in the applications for electric meter connection. To compel the customer to follow his instructions, the complainant removed the terminal screw.

The complainant states that after a week he again inspected the premises and found the concealed conduits already exposed. On said occasion, complainant met the administrator of the building, Mr. Ed Leoncio, whom he required to submit the lease contracts between the owner of the apartment and the six (6) tenants so that the connection orders will be issued in the names of the actual occupants. Connection orders were issued to the occupants of five (5) units on September 1, 1986. (Exhibits "II", "JJ", "KK", "LL", and "MM"). The sixth (6th) unit was not issued a connection order because of the occupant's failure to install a fixed partition separating the sixth (6th) from the fifth (5th) unit (Exhibit "H"). Complainant's findings were reflected in his Engineer Survey Report (ESR).

The complainant alleges that on October 6, 1986, he assigned the ESR to Mr. Felipe Rondez, Senior Branch Fieldman and instructed him to inspect the remaining unit to check whether the applicant had already installed the required fixed partition.

On October 9, 1986 the complainant was approached by Rondez and was informed that one Mariano Caballero, the new Administrator of the apartments of Mr. Senen Arabaca of Dan-Dan Enterprises was inviting the two of them for lunch at the Paisano Restaurant on the following day; that the complainant told Rondez to decline the invitation; that on that occasion the complainant asked Rondez of his findings regarding the sixth (6th) unit of Senen Arabaca's apartment; that Rondez told complainant that the required fixed partition has not yet been installed; that the complainant told Rondez that Mr. Caballero, the building administrator of Senen Arabaca/Dan-Dan Enterprises must see him the following week since on October 10, 1986 he was to attend the "Communication Development Course" at respondent's main office; that complainant suggested to Rondez that since the latter will also be going to the main office to file his loan with MESALA on that day, they can have lunch together at the expense of the complainant; that Rondez told complainant that the lunch would be at his expense for he was expecting to get a substantial loan; that the two agreed to have lunch at the Barrio Fiesta Restaurant.

On October 10, 1986 the complainant together with Rondez and one Angelito Licuanan proceeded to Barrio Fiesta Restaurant; that after being seated, they ordered three bottles of beer and cold cuts; that a little later two men came near their table, one of whom greeted Rondez; that the two men joined the complainant and his companions on the table but Rondez failed to introduce these men to the complainant; that the complainant took the initiative of introducing himself and was surprised to learn that one of these men was Mariano Caballero whose invitation he declined; that to avoid embarrassment the complainant remained silent.

The complainant declares that after they finished their lunch Mr. Caballero excused himself, after which plain-clothesmen appeared frisking complainant and his companion. The frisking stopped when one of the plainclothesmen said "Tsip, eto na".

The complainant narrates that they were first brought to the Tomas B. Karingal Police Station, then to F. Bonifacio of the Southern Police District where they were detained up to midnight of October 11, 1986.ℒαwρhi৷

The complainant avers that he was shocked when he was informed by the investigating policemen that the reason for their apprehension and subsequent detention was, that they were caught while in the act of extorting P2,000.00 from Caballero and that the marked money was taken from the pocket of his companion, Rondez. The complainant claims that he did not see the money but he was only shown xerox copies thereof.16

Confirming Fernandez's innocence of the alleged extortion scheme is Rondez's statement made on November 8, 1986:

S — Noong 9 ng Oktubre, 1986, bumalik ako sa opisina at sinabi ko kay Jess Fernandez na kinukumbida tayo ni Caballero para kumain ng tanghalian bukas Biyernes, sa Paisano. Sabi ni Jess Fernandez ay hindi puwede kasi may problema ang application nila. Mabuti pa sabi ni Jess kaysa sa niyayaya tayo sa Paisano ikaw na lang Philip and kukumbidahin ko at pakainin. Sabi ko naman, sige kako, tamang tama sa tanghali magpa file ako ng loan application. At kami ay nagkasundo na magkita sa lobby ng Lopez Building noong tanghali ng Biyernes pinatawag ako ni Caballero kung ano ang resulta ng pinag-usapan namin ni Fernandez kung siya ay pumayag sa pangungumbida sa Paisano. Tinawagan ko si Caballero noong Biyernes ng umaga at ang sabi ko hindi pumayag si Fernandez at biniro pa ako na ibo-blow-out na lang ako sa Barrio Fiesta ni Fernandez kung kaya't mamayang tanghali ay kakain kami. Tumuloy kami ni Jess Fernandez noon tanghali.

Rondez further testified that:

T — Kailan at saan unang nagkita si Caballero at si Jess Fernandez?

S — Sa San Juan Branch Office sila nagkita pero hindi ko sila naipakilala sa isat-isa. Una silang nagkakilala doon sa Barrio Fiesta (Exhibit "B" p. 2).17

While Fernandez may have been delinquent in his duties as Branch Senior Engineer for failing to indicate in the ESR the irregularity in Dan-Dan's electrical connection, or "lax and administratively remiss in placing too much reliance" on his subordinate Rondez, there is no evidence of Fernandez's participation in Rondez's extortion scheme. For conspiracy to exist, it is essential that there must be conscious design to commit an offense. Conspiracy is not the product of negligence but of intentionality on the part of the cohorts.18 Apart from his laxity, there is no other proof that Fernandez committed acts tending to show conspiracy to extort money from Caballero.

Anent the other charge of his having approved an application for the installation of four (4) electric meters covering a single dwelling unit despite the company's prohibition against splitting the electric load of a single dwelling unit, Fernandez has an explanation which we find sufficient enough to exculpate him from any liability. His approval of the application was based on the Customer Services Guide Manual, Second Edition19 which reads:

C. A business place or area used for non-domestic purposes within a residential structure may be granted a separate meter service under General Service or General Power rate depending on the electrical load. Structural delineation of the living space for residential use and clear definition of the area assigned for non-domestic purposes are preferable for proper determination of applicable rate and necessary separation of electrical wiring installation but not mandatory. The applicant must submit a copy of Business Permit issued by the concerned agency of the Municipal/National Government. A structure or portion of it being applied for separate meter/service shall have an independent electrical installation distinct and separate from other existing services. The applicant shall comply with company standard requirement such as Certificate of Electrical Inspection, electric service deposit, contracts, written consent of building owner and etc. . . .20

Thus:

(a) One electric meter for the first and second floors of the building which were presented to the petitioner as the proposed residence of Mrs. Janet Ley and so the petitioner approved the installation of a meter thereat at the residential rate.

(b) One electric meter for that part of the basement which had a separate door from the Ley's proposed residence which was presented to petitioner as the Office of Ley Construction and Development Corp. As proof, a Business Permit issued by the Office of the Municipal Mayor of Mandaluyong, Metro Manila was submitted (Exh. "K"). Said permit gave the address of Ley Construction and Development Corp. as 677 Notre Dame Street, Mandaluyong, Metro Manila and indicated that the place was being rendered by it effective August 1986 at P1,600.00 per month. Thus, petitioner approved the installation of separate electric meter thereat at the commercial rate.

(c) One electric meter for that room at the basement which was presented to petitioner as the bodega of Mr. Kenneth Ty, of Metro Container Corp. for his tin can products. A Certification (Exh. "L") issued by the owner, Janet Ley, to Mr. Ty authorizing the latter to apply for electric service connection for his bodega was submitted to petitioner, hence, he also approved the electrical connection with a separate meter at the commercial rate. The bodega had also a separate door entrance.

(d) Another meter for the water pump (accessory facility) which was to be used by the above three different occupants of the building, at the commercial rate.21

From the foregoing, we find no deliberate intent on the part of Fernandez to prejudice the company at all since one meter of Janet Ley was charged at residential rate while the three other meters were charged at the commercial rate. Such a set-up would even yield higher proceeds for MERALCO. It can be safely said that at worst, Fernandez committed an error of judgment, but such infraction which was the only one he had ever committed in his long years of service with MERALCO, should not be harshly taken against him. This was the first time that Fernandez was ever charged of "split loading." Possibly, the most severe penalty that should have been imposed on him under the rules of the company is ten (10) days suspension only.22

In view of all the foregoing, there being no sufficient evidence in support of the charges against Fernandez and considering his record of 22 years of service in the company which was otherwise unblemished, his dismissal on the ground of loss of trust and confidence is unwarranted.

Considering that the dismissal was without basis, reinstatement with payment of backwages is in order. However, due to the strained relations between the parties brought about by the litigation in this case and MERALCO's consistent stand that there was just cause for Fernandez's dismissal for dishonesty, we find that separation pay should be awarded as an alternative to reinstatement.

WHEREFORE, for reasons as stated above, the Decision of the NLRC dated December 28, 1992 is REVERSED and the Decision of the Labor Arbiter dated April 15, 1991 is REINSTATED, except that in lieu of Fernandez's reinstatement to his former position, MERALCO is hereby ordered to pay him separation pay.

SO ORDERED.

Davide, Jr., Bellosillo and Vitug, JJ., concur.

Footnotes

1 Records, p. 47.

2 Rollo, G.R. No. 108444, p. 67.

3 Id., at 66.

4 Rollo, G.R. No. 108444, p. 103.

5 Id., at 76; Corrections in parenthesis.

6 Rollo, G.R. No. 108769, p. 164-a.

7 Philippine Overseas Drilling & Oil Dev. Corp. v. Ministry of Labor, 146 SCRA 79 (1986).

8 Rollo, G.R. No. 108444, p. 14.

9 San Miguel v. NLRC, 211 SCRA 353 (1992).

10 San Antonio v. NLRC, 250 SCRA 359 (1995).

11 Id., at 70-71.

12 People v. Salodaga, 247 SCRA 93 (1995).

13 People v. Halili, 245 SCRA 340 (1995).

14 People v. Adon, 233 SCRA 187 (1993).

15 Rollo, G.R. No. 108444, pp. 95-98.

16 Rollo, G.R. No. 108444, pp. 81-84.

17 Id., at 96; emphasis ours.

18 Sabiniano v. Court of Appeals, 249 SCRA 24 (1995).

19 Records, p. 520.

20 Id., at 527.

21 Rollo, G.R. No. 108444, pp. 24-25; emphasis in the original.

22 Records, p. 67.

September 18, 1986

MEMORANDUM

To : MR. RAOUL A. VILLANUEVA From : COMMITTEE ON PENALTY FOR INFRACTIONS Subject : PENALTY FOR INFRACTIONS ON LOAD SPLITTING

After a thorough discussion, the committee headed by Mr. P.U. Costales, recommend the following penalties for infractions on Load Splitting:

A. Penalty for infractions on load splitting committed prior to September 1, 1986.

1. one offense — 10 working days suspension

2. other similar offense — 3 working days suspension for every offense, will not be considered as repetition.

B. Penalty for infractions on load splitting committed after September 11, 1986.

With in 12 month Period 1st 2nd 3rd 4th

1. If the approval of the splitloading after due investigation is clearly intentional violating Section 5, "Neglect of Duty" & Section 7, Dishonesty: 10 days 15 days Dismissal

11. All other acts of dishonesty which cause or tend to cause prejudice to the Company, which is subject to disciplinary action depending upon the gravity of the offense.

2. If the approval of the split loading Reprimand after due investigation is found out to be in good faith, considering the case, its gray area of right or wrong. Violation of Section 5, Neglect of Duty: 3 days 5 days 10 days

b-6 Failure to comply with official orders and/or perform regular assigned duties or specific instruction related to his duty, which is punishable from reprimand to dismissal, depending upon the gravity of the offense

b-7 Knowingly furnishing false, . . . data or information to persons duly authorized to receive the same, arising out of the employee's neglect or failure to discharge his duty . . . or . . . , which act causes prejudice to the Company, "which is punishable from reprimand to dismissal depending upon the gravity of the offense.

All offenses committed prior to September 1, 1986, will be considered as 1st offense, regardless of number of days suspension after due notice of suspension has been rendered.

Suspension of 3 days will be imposed continuously for every infraction committed prior to September 1, 1986, as just similar offense as in (A) and not as a repetition.

For your approval.

(Sgd.) R. L. SANTIAGO

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