Landtex Industries v. Court Of Appeals

CARPIO, J.:

The Case This is a petition for review on certiorari1 of the Decision2 dated 13 February 2001 and of the Resolution3 dated 16 October 2001 of the Court of Appeals (appellate court) in CA-G.R. SP No. 50060. The Decision ordered petitioners Landtex Industries (Landtex) and William Go to award respondent Salvador M. Ayson (Ayson) separation pay in lieu of reinstatement, backwages, 13th month pay, service incentive leave pay, and attorney's fees. The Facts Landtex, a sole proprietorship owned by Alex Go and managed by William Go, is a business enterprise engaged in the manufacture of garments.

Ayson worked in Landtex as a knitting operator from 19 May 1979 to 6 July 1996. Ayson was an officer4 of Landtex Industries Workers Union - Federation of Free Workers (union) which had an existing collective bargaining agreement (CBA) with Landtex. Ayson received a letter5 from Landtex dated 16 March 1996 which stated that Ayson committed acts contrary to company policies on 2 and 7 March 1996.

The letter required Ayson to explain in writing within 24 hours from receipt why no disciplinary action should be taken against him for spreading damaging rumors about the personal life of an unspecified person, and for having an altercation with one of the company's owners when he was asked to submit an ID picture. Ayson replied in writing6 that he could not defend himself from the charge of spreading damaging rumors because Landtex's letter failed to state what rumors he was supposed to have spread. Ayson further explained that he merely replied in a loud voice to the company owner's request because he was carrying textiles.

Ayson then apologized for his actions. Landtex sent Ayson another letter dated 2 April 1996 informing him of its receipt of his explanation. Landtex informed Ayson that the omission of the details about the damaging rumors was intentional because other employees might be able to read the letter.

Furthermore, Landtex decided to conduct an investigation on 26 April 1996 in view of Ayson's denials. The first meeting between Ayson and Landtex's counsel took place on 26 April 1996. The minutes of the 26 April 1996 meeting state that Ayson was informed that there were witnesses who could testify that he spread rumors about the personal life of William Go and his family.

Ayson denied that he spread rumors and requested for another meeting so that he could hear the alleged witnesses and defend himself. Ayson further requested that the next investigation be held at Landtex's Mauban office because he and the union officers accompanying him suffer salary deductions for their attendance of investigations during office hours.7 Another meeting was scheduled for 5 May 1996, but Ayson was unable to attend it and went home early because he allegedly needed to look after his child. The second meeting between Ayson and Landtex's counsel took place on 5 June 1996.

The minutes of the 5 June 1996 meeting state that Ayson and a union officer accompanying him appeared but refused to sign the attendance sheet or to participate. Landtex's counsel, Atty. Generosa Jacinto, made a note in the minutes which reads, "Pls. advise mgt.

They can take any action they want."8 In a letter dated 19 June 1996, Landtex terminated Ayson's services effective 30 June 1996 because of Ayson's lack of cooperation during the investigations. Despite this notice, Ayson still reported for work until 6 July 1996. In a letter dated 8 July 1996, the union president requested Landtex for a formal dialogue regarding Ayson's case.

Landtex reaffirmed its decision to terminate Ayson in meetings with the union held on 10 and 16 July 1996.

Landtex and the union agreed to refer the matter to a third party in accordance with the provisions of law and of the CBA. Landtex expected Ayson to refer the issue to the National Conciliation and Mediation Board (NCMB) for the selection of a voluntary arbitrator. Ayson and the union, however, filed a complaint before the labor arbiter.9 The labor arbiter conducted mandatory conferences for amicable settlement with the participation of all parties.

The parties agreed to the idea of payment of separation pay in lieu of reinstatement but differed as to the amount. Ayson wanted to receive one month basic salary for every year of service while Landtex wanted to pay only one-half month basic salary for every year of service from date of hiring to termination of employment.10 The parties were not able to settle; hence, the labor arbiter ordered them to submit their position papers. In his position paper, Ayson asked whether his dismissal from employment has any just cause.

Ayson also asked whether Landtex complied with procedural due process when it terminated his employment. On the other hand, Landtex and William Go revealed in their position paper that Ayson was seen having a drinking session with other Landtex employees near the company premises. A Landtex security guard, who was a part of the drinking session but whose identity was not revealed, stated that Ayson maliciously narrated spiteful stories about the personal life of William Go.

Landtex also questioned the jurisdiction of the labor arbiter over Ayson's case. Landtex insisted that the labor arbiter should dismiss Ayson's case and refer it to the NCMB for the selection of a voluntary arbitrator. The Ruling of the Labor Arbiter On 30 September 1997, the labor arbiter promulgated his decision11 which ruled in favor of Ayson.

The labor arbiter declared that despite the union's manifestation of its desire to refer Ayson's case to "a third party in accordance with provisions of law and CBA,"12 this manifestation did not affect Landtex's termination of Ayson's employment. Ayson's termination thus properly falls under the jurisdiction of the labor arbiter. Moreover, the labor arbiter did not find any evidence supporting Landtex's allegations that Ayson spread malicious rumors about William Go or shouted at William Go's wife.

The pertinent portions of the labor arbiter's decision read: Dismissal of a worker is no trifling matter; more so, of herein [Ayson] who had been employed with [Landtex] for seventeen years, more or less. The dismissal must be for a just cause, let alone with due process, and must be based on substantial evidence. Mere allegations will not suffice.

WHEREFORE, premises considered, judgment is hereby rendered ordering [Landtex Industries and William Go] to reinstate [Ayson] to his former position without loss of seniority rights with full backwages from the date his salary has been withheld until the actual date of reinstatement. [Landtex Industries and William Go] are further ordered to pay ten (10%) percent of [Ayson's] total monetary award as attorney's fees. Backwages 6/30/96 - 8/31/97 = 14.0 mos. P165.00 x 30 x 14.00 mos. = P 69,300.00 13th Month Pay SILP = 5,775.00 5.833 days x P165.00 = 962.50