[ G.R. No. 234725, September 16, 2020 ]




Before this Court is a petition for review on certiorari assailing the: (1) Decision dated March 30, 2017;1 and (2) Resolution2 dated October 11, 2017 of the Court of Appeals (CA), which reversed the findings of the labor tribunals and declared that respondent Roy R. Relucio (Relucio) was illegally dismissed by petitioner Bicol Isarog Transport System, Inc. (Bicol Isarog).

The facts as summarized by the CA are as follows:

x x x Roy Radasa Relucio filed a complaint with the Labor Arbiter against private respondents Bicol Isarog Transport System, Inc., Jose Marco Hernandez Del Pilar, and Geraldo D. Abano, for illegal dismissal, illegal suspension, underpayment of salaries/wages, holiday pay, service incentive leave pay and 13th month pay, non-payment of overtime pay and night shift differential, illegal deduction (donation and cash bond), and moral and exemplary damages, x x x.

x x x x

In his position paper, [Relucio] averred that, on 11 April 2011, he was employed by [Bicol Isarog] as a bus driver x x x.

On 30 March 2013, he alleged that he was illegally dismissed by [Bicol Isarog's] officers by suspending him first, then telling him thereafter not to report for work anymore without any valid reason and due process.

He further averred that, throughout his employment, he was never given the benefits of ECOLA, PAG-1BIG and Philhealth, and his salary was also underpaid.

On the other hand, [Bicol Isarog] alleged that, sometime on April 2011, petitioner applied for employment as a bus driver with [Bicol Isarog]. Petitioner's services [were] engaged on a probationary basis.

Even as probationary employee, [Bicol Isarog] alleged that [Relucio] received compensation over and above the minimum wage required by law as he was receiving Two Hundred Forty Seven Pesos (P247.00) [per] day of work; trip allowance depending on the destination; and Lutao allowance of One Hundred Pesos (P100.00) on his rest days.

On 26 March 2012, petitioner became a regular employee of Bicol Isarog. At the start of his employment, [Bicol Isarog] explained to [Relucio] the provisions of the Code of Discipline of the company, and [Relucio] expressed his willingness to comply with the terms and conditions thereof. However, after [Relucio] became a regular employee, [Bicol Isarog] averred that he repeatedly and willfully violated the company's Code of Discipline, specifically his failure to submit the Trip Collection Report (TCR) and turnover the collection for charter buses on June 5, 8, 10, 12, 16, 17, 18 and 21, 2012.

As a result, [Bicol Isarog] issued Memorandum Circular No. BITSI-PM-2012-102-A requiring [Relucio] to submit a written explanation as regards his infraction. After reviewing his explanation and other pieces of evidence, the company issued Circular No. BITSI-2012-102-B, finding [Relucio] liable for the offense charged. [Bicol-Isarog] then imposed the penalty of suspension for a period of thirty (30) days starting from 22 June to 22 July 2012.

Then, on 28 March 2013, [Bicol Isarog] received a report that [Relucio] insisted on making a trip from Masbate to Manila with only five (5) passengers on board despite the express order of the Office-in-Charge (OIC) for Operations in Masbate for him not to proceed with the trip and to transfer, instead, the said passengers to another bus of the company. However, [Relueio] disobeyed the express instruction of said OIC and insisted on making the trip.

The Operation Manager of [Bicol Isarog], Kirby Del Castillo, then sent a text message directing [Relucio] to report to him when he [arrived] in Manila. Upon arriving at the J. Ruiz terminal in Manila in the morning of 29 March 2013, [Relucio] walked out of the company premises without reporting to the said operations manager. Hence, another text message was sent to him requiring him to report to the MR Department on 01 April 2013. However, he again failed to report to the MR Department on the said date.

Thus, [Bicol Isarog] issued Memorandum Circular No. BITSI-PM-2013-145 ("first memorandum") which stated that: (1) a report was received that [Relucio] allegedly violated company policy and disobeyed the express orders of his superior on 28 March 2013; (2) [Relucio] is being required to present himself to the J. Ruiz Office or to submit a written explanation why he should not be suspended or dismissed from work due to the incident of insubordination which occurred on 28 March 2013; and (3) his failure to comply therewith shall be taken as a waiver of his right to be heard and that respondent company shall then be entitled to decide the report against him based on available evidence.

On the same day, the Human Resource (HR) Manager, Roberto Cabilao, went to the address given by [Relucio] in his biodata, NBI and barangay clearance x x x, to personally serve the first memorandum. However, upon arriving at the said address, Robert Cabilao was told that there was no Roy Radasa Relucio living in that address, and the person he talked to refused to acknowledge receipt of the memorandum, prompting Cabilao to leave the premises with the memorandum unserved.

On 05 April 2013, [Relucio] still failed to report for work or submit a written explanation. Thus, [Bicol Isarog] issued Memorandum Circular No. BITSI-PM-2013-158 ("second memorandum") requiring [Relucio] to report for work and to submit a written explanation why he should not be disciplined, suspended or dismissed from service for not reporting for work since 31 March 2013 without official leave.

Roberto Cabilao again went to [Relucio's address], to personally serve the written memorandum but was told, for the second time, that [Relucio] was not living in that address.

Subsequently, [Bicol Isarog] issued Memorandum Circular No. BITSI-PM-20130-159 ("notice of termination"), informing [Relucio] that it is terminating his employment for his failure to report for work for five (5) consecutive days without a valid reason and official leave. However, since [Bicol Isarog] had no information as to the whereabouts of [Relucio], it was only on 18 April 2013, during the conference before the DOLE-NCR Field Office, that [Bicol Isarog] served him a copy of said notice of termination.3

In its Decision4 dated February 6, 2015, the labor arbiter dismissed Relucio's complaint for lack of merit.Ꮮαwρhi৷ There was just cause to terminate the employment of Relucio, i.e., insubordination and failure to report for work, and there was substantial compliance on the part of Bicol Isarog to observe the requirements of procedural due process in severing Relucio's employment. Finally, the arbiter ruled that Relucio is not entitled to his money claims.

On appeal, the National Labor Relations Commission (NLRC) affirmed the arbiter's Decision.5 Failing to secure a reconsideration,6 Relucio filed a petition for certiorari with the CA.7 The petition was granted in the CA Decision8 dated March 30, 2017. The CA ruled that Relucio was illegally dismissed since Bicol Isarog failed to discharge its burden to prove just cause for his dismissal. Relucio's failure to obey the order of the Officer-In-Charge (OIC) was not characterized by a wrongful and perverse penalty of dismissal. Moreover, the CA held that Bicol Isarog violated Relucio's right tc procedural due process because the memoranda issued by Bicol Isarog never reached Relucio. In fact, the notice of termination was only handed to Relucio during the proceedings before the Department of Labor and Employment (DOLE)-National Capital Region (NCR) Field Office. The CA ordered Relucio's reinstatement and the payment of backwages, holiday pay, service incentive leave pay and 13th month pay.9 Bicol Isarog moved for reconsideration, but was denied.10

Hence, this petition alleging that the CA erred in ruling that Relucio was illegally dismissed. Bicol Isarog maintains that failure to report for duty is a grave offense punishable by dismissal under the company's code for conduct. And, in effecting the dismissal, Bicol Isarog complied with the twin-notice rule when it issued two memoranda requiring Relucio to explain his alleged infractions, and another memorandum terminating his employment. Bicol Isarog likewise questions the monetary awards made by the CA for lack of factual and legal basis.11

For its part, Relucio counters that he did not defy the instructions for him to report for work. Upon arriving in Manila on March 29, 2013, he went to the office of Bicol Isarog but was not able to find any representative to talk to. The next day, Relucio returned but was told to go home because he was already dismissed. Thus, on April 1, 2013, he sought assistance from the NLRC. Relucio also claims that he did not violate any instructions given to him since he was not the on-duty driver for the Masbate-Manila route on March 28, 2013.12

In its Reply,13 Bicol Isarog reiterates its allegations in the petition that "x x x the wealth of evidence on record more than adequately establish that Relucio was dismissed for just cause, and in compliance with the requirements of due process,"14

We find the petition partly meritorious.

At the outset, the Court is not unmindful that in a petition under Rule 45 of the Rules of Court, only questions of law, not of fact, may be raised. However, where the findings of the labor tribunals contradict that of the CA, this Court may look into the records of the case and re-examine the questioned findings.15

Dismissal from employment has two facets: first the legality of the act of dismissal, which constitutes substantive due process; and, second, the legality of the manner of dismissal, which constitutes procedural due process.16

Under Article 297 of the Labor Code,17 an employer may terminate an employment for any of the following causes:

(a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

(b) gross and habitual neglect by the employee of his duties;

(c) fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

(d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and

(e) other causes analogous to the foregoing.

The burden of proving that the termination of an employee was for a just or authorized cause lies with the employer. If the employer fails to meet this burden, the conclusion would be that the dismissal was unjustified and therefore, illegal.18 To discharge this burden, the employer must present substantial evidence, which is that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion,19 and not based on mere surmises or conjectures.20

In particular, insubordination, as a just cause for the dismissal of an employee, necessitates the concurrence of the following requisites: (1) the employee's assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge.21

Here, Relucio was given specific instructions, by the OIC for Operations in Masbate, not to push through with his trip to Manila on March 28, 2013 since he only had five passengers. The OIC reminded Relucio that it is a policy to transfer passengers to another bus with more passengers to save an operational costs. However, he insisted on pursuing his trip. Thereafter, Relucio was ordered to report to the Operations Manager of Bicol Isarog upon arriving in Manila. But, when Relucio reached Manila on March 29, 2013, he failed to abide by the summons. Through a text message, Relucio was directed to go to the Human Resource (HR) Department on April 1, 2013. Again, he did not heed the directive, prompting Bicol Isarog to issue Memorandum Circular No. BITSI-PM-2013-145, which served as a notice of Relucio's infraction and order to submit his explanation.22 The order not to continue with the trip is reasonable, lawful, made know to Relucio and pertained to his duty as a bus driver of Bicol Isarog. Relucio did not deny nor offered any explanation for his disobedience. Thus, there is just cause to terminate his employment.

There is no doubt, an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees so long as they are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements. Company policies and regulations are generally valid and binding on the parties and must be complied with until finally revised or amended, unilaterally or preferably through negotiation, by competent authority.23 Bicol Isarog's Code of Conduct categorized insubordination and failure to report for duty as a grave offense, which merits the penalty of dismissal.24

However, to effect a valid dismissal on the ground of a just cause, the employer must substantially comply with the following standards of due process.25 (a) a first written notice - containing the specific cause or grounds for termination under Article 297 of the Labor Code, and company policies, if any; detailed narration of the facts and circumstances that will serve as basis for the charge; and a directive to submit a written explanation within a reasonable period;26 (b) after serving the first notice, the employer should afford the employee ample opportunity to be heard27 and to defend himself; and (c) after determining that termination of employment is justified, the employer shall serve the employee a written notice of termination indicating that all circumstance involving the charge against the employee have been considered; and the grounds have been established to justify the severance of his employment. These standards were refined in Unilever Philippines, Inc. v. Rivera,28 to wit:

[T]he following should be considered in terminating the services of employees:

1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees.

2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.

3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment.29

Here, the memoranda issued by Bicol Isarog never reached Relucio. Although the first notice to explain was served at the last known address of Relucio, consistent with the requirements of the implementing rules and regulations of the Labor Code,30 Bicol Isarog's HR Manager, Roberto Cabilao, discovered that Relucio was no longer residing at the given address. Yet, to feign compliance with the rules, Cabilao returned to the same address to deliver the second memorandum/notice to explain. Notably, the notice of termination was only given by Bicol Isarog to Relucio during the Single Entry Approach conference before the DOLE-NCR. Clearly, there was no substantial compliance with the dictates of procedural due process in the dismissal of Relucio. The CA aptly observed:

In this case, We find that the requirements of procedural due process was not complied with. Records show that the only effort to comply with procedural due process in dismissing petitioner were the two memoranda which were never served to and received by petitioner. In fact, the notice of termination was only made known to petitioner during the proceedings before the DOLE-NCR Field Office. Neither was there any showing that petitioner was given the chance to explain his side or to respond to the charges against him and present evidence in his defense.31

The employer bears the burden of proving compliance with the above two-notice requirement.32 Bicol Isarog's attempts to furnish the notices to Relucio is not sufficient. In effect, Relucio was not afforded ample opportunity to intelligently respond to the accusations hurled against him as he was not given a reasonable period to prepare his defense. Also, based on the records, Bicol Isarog never scheduled a hearing or conference where Relucio could have responded to the charge and presented his evidence. Indubitably, Bicol Isarog failed to comply with the proper procedural requirements, despite having a just cause to dismiss Relucio. Thus, Relucio is entitled to nominal damages in the amount of P30,000.00 in accordance with prevailing jurisprudence.33

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated March 30, 2017 and Resolution dated October 11, 2017 of the Court of Appeals are SET ASIDE. Petitioner Bicol Isarog Transport System, Inc. is ORDERED to indemnify respondent Roy R. Relucio the amount of thirty thousand pesos (P30,000.00) as nominal damages for failure to comply with the due process requirements in terminating the employment of the respondent.


Peralta, C.J. (Chairperson), Caguioa, Reyes, Jr. and Lazaro-Javier, JJ., concur.


1Rollo, pp. 54-73; penned by Court of Appeals Associate Justice Elihu A. Ybanez, with the concurrence of Associate Justices Magdangal M. De Leon and Carmelita Salandanan Manahan.

2Id. at 74-75; penned by Court of Appeals Associate Justice Elihu A. Ybańez, with the concurrence of Associate Justices Magdangal M. De Leon and Carmelita Salandanan Manahan.

3Id. at 55-58.

4Id. at 59. The dispositive portion of the Labor Arbiter's Decision, as cited in the CA Decision, reads:

WHEREFORE, premises considered, judgment is hereby rendered dismissing the above captioned complaint for lack of merit.

All other claims are dismissed.


5Id. at 60. The Resolution of the NLRC dated March 31, 2015, cited in the CA Decision, disposed of Relucio's appeal as follows:

WHEREFORE, premised on the foregoing considerations, the instant appeal is hereby DISMISSED for lack of merit. Decision appealed from STANDS.


6Id. at 60. As cited in the CA Decision, Relucio moved for reconsideration of the NLRC's March 31, 2015, which was denied in a Resolution dated May 25, 2015.

7Id. at 11.

8Id. at 54-73. The dispositive portion of the CA Decision dated March 30, 2017 reads:

FOR THESE REASONS, the instant petition is GRANTED, and the Resolution dated 31 March 2015 and Resolution dated 25 [May 2015 are] SET ASIDE. Respondent company is ordered to reinstate petitioner to his former position or its equivalent without loss of seniority rights and to pay him full backwages from the time of his dismissal up to the finality of this Decision. Respondent company is also ordered to pay petitioner his holiday pay, service incentive leave pay, 13th month pay and attorney's fees. The case is, therefore, REMANDED to the Labor Arbiter for the proper computation of the said money claims.

SO ORDERED. Id. at 71-72.


10Rollo, pp. 74-75. Bicol Isarog's Motion for Reconsideration was resolved in the CA's Resolution dated October 11, 2017, as follows:

After carefully reviewing the arguments raised in the motion, We find the same to be mere reiteration of matters previously considered and found to be without merit in the Decision subject of this recourse. We thus see no compelling reason to modify, reverse, or set aside Our previous Decision.

WHEREFORE, the instant Motion for Reconsideration is hereby DENIED.

SO ORDERED. Id. at 75.

11Id. at 10-53.

12Id. at 78-85.

13Id. at 89-115.

14Id. at 90.

15Coca Cola Bottlers Phils., Inc., et al. v. IBM Local I, et al., 800 Phil. 645, 661 (2016); Maersk-Filipinas Crewing, Inc., et al. v. Avestruz, 754 Phil. 307, 317-318 (2015).

16Maula v. Ximex Delivery Express, Inc., 804 Phil. 365, 378 (2017), citing NDC Tagum Foundation, Inc. v. Sumakote, 787 Phil. 67, 73 (2016) and Agullano v. Christian Publishing, et al., 588 Phil. 43, 49 (2008).

17Previously, Article 282 of the LABOR CODE.

18Maersk-Filipinas Crewing, Inc., et al, v. Vetruz, supra note 15 at 318, citing ALPS Transportation v. Rodriguez, 711 Phil. 122, 131 (2013), citing Nissan Motors Phils., Inc. v. Angelo, 673 Phil. 150, 162 (2011).

19Id. at 318, citing Skippers United Pacific, Inc. v. NLRC, 527 Phil. 248, 257 (2006).

20Id., citing ALPS Transportation v. Rodriguez, supra note 18.

21Supra note 15 at 319, citing Grandteq Industrial Steel Products, Inc. v. Estrella, 661 Phil. 735 (2011).

22Rollo, pp. 15-16. The Memorandum states:

Ang tanggapan pong ito ay tumanggap ng ulat tungkol sa diumanong nagawang paglabag sa alituntunin ng kompanya. Ayon sa ulat, noong Marso 28, 2013 ay pinapilitan mo di umanong [sic] na bumyahe mulasa [sic] Masbate patungong Manila sakabila [sic] ng lima (5) lang ang iyong sakay na pasahero at sinabihan ka ng OIC for operations sa Masbate nai-transfer [sic] nalang ang iyong pasahero sa isa nating bus na may sakay na 20 napasahero [sic] at sa susnod na araw ka nalang bumyahe. Sa kabila ng kanyang utos na huwag ka muna bumyahe dahil say[a]ng ang krudo na gagamitin at gagastos lang ang kompanya ng walang pakinabang, sinuway mo parin ang kanyang utos at tumuloy ka pa rin na bumyahe (Insubordination).

Base sa paunang pagsisiyasat, lumalabas na maaaring nilabag mo ang alituntunin ng kompanya ukol sa "Insubordination or willful disobedience of or refusal to follow supervisor[']s lawful orders or reasonable request, instructions or to perform assigned work" naisang [sic] "serious misconduct" at kapag napatunayang totoo ay may karampatang parusa ng thirty (30) days suspension or dismissal sa unang opensa at dismissal sa ikalawang opensa.

Dahil sa pangyayaring ito, ikaw po Mr. Relucio at inuutusan ng tanggapang ito na agad mag-report sa opisina at magbigay ng nakasulat na paliwanag sa loob ng limang (5) araw Simula sa araw namatanggap [sic] mo ang memorandum na ito upang ipaliwanag kung bakit hindi karapat-dapat mapatawan ng naaangkop na disciplina.

Ang pagtanggi/pagsuway ninyo sakautusang [sic] ito upang magbigay ng inyong nakasulat napaliwanag [sic] or sumailalim sa paunang pagsisiyasat ay mangangahulugang pagbitiw ninyo sa karapatan ninyong magpaliwanag at pinauubaya ninyo sa pangasiwaan na ibase nalamang [sic] ang igagawad na desisyon sasumbong/ulat [sic] laban sa inyo at anumang ebidensyang makuha namin.

23Genuino Ice Company, Inc. v. Magpantay, 526 Phil. 170, 186 (2006), citing Coca-Cola Bottlers, Phils. Inc. v. Kapisanan ng Malayang Manggagawa sa Coca-Cola-FFW, 492 Phil. 570 (2005).

24Rollo, pp. 26-27.

25Section 5.1, DOLE Department Order No. 147-15, series of 2015, which amended the Implementing Rules and Regulations of Book VI of the Labor Code of the Philippines, as amended.

26Id. "Reasonable period" should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employee an opportunity to study the accusation, consult or be represented by a lawyer or union officer, gather data and evidence, and decide on the defenses against the complaint.

27Id. citing Perez, et al. v. Phil. Telegraph and Telephone Co., et al, 602 Phil. 522 (2009), and Section 12, DOLE Department Order 18-A. "Ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him/her and submit evidence in support of his/her defense, whether in a hearing, conference or some other fair, just and reasonable way. A formal hearing or conference become mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.

28710 Phil. 124(2013).

29Id. at 136-137, citing King of Kings Transport, Inc. v. Mamac, 553 Phil. 108, 1 15-116 (2007); as cited in Puncia v. Toyota Shaw/Pasig, Inc., 788 Phil. 464, 480-481 (2016).

30Department Order No. 147-15, series of 2015 -Amending the Implementing Rules and Regulations of Book VI of the Labor Code of the Philippines, as Amended. The relevant provision of the rules states:


APPLICATION OF JUST AND AUTHORIZED CAUSES OF TERMINATION Section 5. Due Process of Termination of Employment, x x x

5.1. Termination of Employment Based on Just Causes. As defined in Article 297 of the Labor Code, as amended, the requirement of two written notices served on the employee shall observe the following:

x x x x

The foregoing notices shall be served personally to the employee or to the employee's last known address.

31Rollo, p.68.

32Santos v. Integrated Pharmaceutica, Inc., et al, 789 Phil. 477, 495 (2016), citing University of the Immaculate Conception v. Office of the Secretary of Labor and Employment, et al., 769 Phil. 630, 660 (2015).

33Puncia v. Toyota Shaw/Pasig, supra note 29 at 482, citing Sang-an v. Equator Knights Detective and Security Agency, Inc., 703 Phil. 492, 503 (2013), citing Agabon v. NLRC, 485 Phil. 248 (2004).

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