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LIBERAL INTERPRETATION OF THE RULES IS PRIMARILY GRANTED TO EMPLOYEES AND NOT EMPLOYER
The liberality of procedural rules is qualified by two requirements: (1) a party should adequately explain any delay in the submission of evidence; and (2) a party should sufficiently prove the allegations sought to be proven; Liberal interpretation of the rules.
Liberal interpretation of the rules is primarily granted for the employee’s favor, and not the employer. Thus, the SC held in the following case:
Reyes vs. Rural Bank of San Rafael (Bulacan) Inc., et al.
G.R. No. 230597, March 23, 2022
Due process; Due process has been described as a “malleable concept anchored on fairness and equity;” Indeed, at its core is simply the reasonable oppo1iunity for every party to be heard; Technical rules of procedure; Interest of substantial justice; Liberal policy; Liberality of procedural rules; The liberality of procedural rules is qualified by two requirements: (1) a party should adequately explain any delay in the submission of evidence; and (2) a party should sufficiently prove the allegations sought to be proven; Liberal interpretation of the rules; Liberal interpretation of the rules is primarily granted for the employee’s favor, and not the employer; In certain cases, of course, a liberal approach to the rules may be had even if it favors the employer; Such allowance, however, must be measured against standards stricter than that imposed against the worker, and only in compelling and justified cases where the employer will definitely suffer injustice should such liberal interpretation be disallowed; Willful disobedience; For willful disobedience to be a ground, it is required that: (a) the conduct of the employee must be willful or intentional and (b) the order the employee violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties that he had been engaged to discharge. Willfulness must be attended by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with proper subordination
Facts:
Respondent Rural Bank of San Rafael (Bulacan) Inc. (RBSR) is a domestic banking corporation while RBSR, et al. Florante Veneracion (Veneracion), Celerina Sabariaga (Sabariaga), Alicia Flor Kabiling (Kabiling), Fidela Manago (Manago), Ceferino De Guzman (De Guzman), and Rizalino Quintos (Quintos) (collectively, RBSR, et al.), are members of RBSR’s Board of Directors.
Sometime in 2012, several stockholders of RBSR complained about the discrepancies in the amounts of the purchase price of stock subscriptions appearing in the original receipts as against the duplicate copies issued by the bank. The anomaly involved several millions of pesos collected from stockholders of RBSR which, if not corrected, will certainly tarnish the image and integrity of the latter.
Acting on this anomaly, RBSR conducted an investigation and confinned the irregularities. It was discovered that in the original receipts given to the stockholders, the stated price of shares ranged from P250.00 to P275.00, but in the duplicate copies retained by RBSR, only Pl 00.00 was indicated. Moreover, the original receipts were signed by Flordeliza Cruz, then President of RBSR, while the duplicate copies were signed either by its then Treasury Head Emilline C. Bognot (Bognot), or Branch Manager Reynaldo Eusebio, Jr. (Eusebio).
Thus, in compliance with the Manual of Regulations for Banks mandating the prompt report of anomalies to the Bangko Sentral ng Pilipinas (BSP), RBSR’s Board of Directors approved a Report on Crimes and Losses and directed Reyes – as Compliance Officer – to certify the same. However, Reyes refused to certify the report, reasoning that no independent investigation was conducted, and that he cannot completely validate the same for lack of material data and evidence, and that he was being
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pressured to certify the report.
Thereafter, Reyes claimed that instead of furnishing him the hard copies of the reports and its original attachments to enable him to verify and certify the same, RBSR issued him two show cause orders and put him on preventive suspension for neglect of duty. Meanwhile, RBSR contended that several administrative hearings were scheduled to hear Reyes’ side, but all were ignored.
On March 25, 2013, Reyes, together with Bognot and Eusebio (complainants) -who were principally accused of theft/misappropriation of funds in connection with the anomaly – filed a Complaint against RBSR, et al. for illegal suspension and money claims. An Amended Complaint was subsequently filed to include illegal dismissal, in view of their eventual dismissal from work.
LA Ruling:
The Labor Arbiter (LA) found RBSR guilty of illegally dismissing Reyes, Bognot, and Eusebio.
The arbiter’s ruling was mainly based on RBSR’s failure to file its Position Paper and submit its evidence during the proceedings, which constrained the arbiter to rule on the matter based solely on the complainants’ evidence. Based on the complainants’ evidence and submissions, the arbiter found that complainants’ dismissal was without a valid cause, and that they were denied due process for having been summarily dismissed.
Further, it is incumbent upon the employer to show proof that the employee was dismissed for a just or authorized cause, which the bank failed to establish since it did not file its Position Paper and submit its evidence.
Thus, RBSR, et al. elevated the case to the National Labor Relations Commission (NLRC).
NLRC Ruling:
The NLRC reversed the arbiter’s ruling.
Notably, the NLRC applied a liberal interpretation and relaxed procedural rules, and held that substantial justice must prevail over technicalities. Thus, the NLRC allowed RBSR, et al. to submit countervailing evidence even on appeal.
On the substantial issue, the NLRC found that complainants were not illegally dismissed. RBSR, et al. were able to discharge the burden of proving that they had a just cause to terminate complainants’ employment.
Aggrieved, Reyes and Bognot filed a Petition for Certiorari before the Court of Appeals (CA). They imputed grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC in relaxing procedural rules and allowing RBSR, et al. to submit their evidence for the first time, even if the case was already on appeal.
Meanwhile, Eusebio no longer pursued his case.
CA Ruling:
The CA affirmed the NLRC Decision and found no grave abuse of discretion on the part of the latter in relaxing its procedural rules. The CA held that the RBSR, et al.’ failure to file their Position Paper and submit their evidence was justified and satisfactorily explained, “since they were not given summons, nor notified of the scheduled preliminary conference and further hearings after the amended complaint was filed.”
After having settled the procedural issue, the CA proceeded to rule that “petitioners were validly dismissed for a just and valid cause.
Reyes and Bognot filed a Motion for Reconsideration, but it was denied in a Resolution. Unyielding, Reyes elevated the case before the Supreme Court (SC) via a Petition for Review on Certiorari. On the other hand, Bognot yielded and no longer joined Reyes’ petition.
Issue/s:
Whether or not the two requirements for the application of liberality of procedural rules are satisfied
Whether or not the liberal interpretation of the rules is primarily granted for the employee’s favor, and not the employer
Whether or not an employee who refused to obey the order of the employer to submit report is willful in character
SC Ruling:
The SC found the appeal meritorious.
RBSR, et al. assert that the NLRC and CA were correct in allowing them to present evidence, albeit belatedly; otherwise, their right to due process would have been denied. Further, they claim that “there was no summons sent to any of the private RBSR, et al. after the filing of the amended complaint.
Due process has been described as a “malleable concept anchored on fairness and equity.” Indeed, at its core is simply the reasonable opportunity for every party to be heard.
The late constitutionalist Father Joaquin G. Bernas, S.J., further expounds on this concept: “Whether in judicial or administrative proceedings, therefore, the heart of procedural due process is the need for notice and an opp0rtunity to be heard. Moreover, what is required is not actual hearing but a real opportunity to be heard. Thus, one who refuses to appear at a hearing is not thereby denied due process if a decision is reached without waiting for him.”
Applying this principle, a review of the records will reveal that during the proceedings before the arbiter, RBSR, et al. have been accorded ample opportunity to present their side.
Based on this undisputed finding, it appears that RBSR, et al. have unjustifiably missed at least two settings: that on June 4, 2013, and that on June 19, 2013. To stress, RBSR, et al. missed the hearing on June 19, 2013 despite having been directed prior by the arbiter to attend. Moreover, it must be noted that RBSR, et al., at this point in time, have already obtained a copy of the amended complaint which would have enabled them to intelligently respond.
While it may be true that the arbiter failed to issue summons, such circumstance cannot operate as a denial of RBSR, et al.’ right to due process because the fact remains that RBSR, et al. have already obtained a copy of the amended complaint, and have been duly notified of the June 19, 2013 hearing.
Clear from Section 3 of the 2011 NLRC Rules of Procedure that the issuance of summons is done in order to apprise the respondent of the case filed and as a means to furnish them a copy of the complaint so they can intelligently respond. Given the circumstances in the present case, the issuance of the summons would have been a mere superfluity since again, RBSR, et al. have already obtained a copy of the amended complaint and notified of the upcoming hearing date. RBSR, et al.’ absence during the June 4 , 2013 hearing is likewise unexplained.
A closer examination at the findings of facts of both the Labor Arbiter and NLRC will reveal that there is no incongruence; in fact, they are in accord with and complement each other on the following points: first, that RBSR, et al. were able to earlier secure a copy of the amended complaint; second, that RBSR, et al. were absent during the June 4, 2013 and June 19, 2013 hearings; and third, that RBSR, et al.’ absences are unexplained.
The principles embodied by all prevailing labor rules, legislations, and regulations are derived from the Constitution, which intensely protects the working individual and deeply promotes social justice. Article II, Section 18 of the 1987 Constitution.
The measures embedded in our legal system which accord specific protection to labor stems from the reality that normally, the laborer stands on unequal footing as opposed to an employer. Indeed, the labor force is a special class that is constitutionally protected because of the inequality between capital and labor.33 In fact, labor proceedings are so informally and, as much as possible, amicably conducted and without a real need for counsel, perhaps in recognition of the sad fact that a common employee does not or have extremely limited means to secure legal services nor the mettle to endure the extremely antagonizing and adversarial atmosphere of a formal legal battle. Thus, in the common scenario of an unaided worker, who does not possess the necessary knowledge to protect his rights, pitted against his employer in a labor proceeding, We cannot expect the former to be perfectly compliant at all times with every single twist and turn of legal technicality. The same, however, cannot be said for the latter, who more often than not, has the capacity to hire the services of a counsel. As an additional aid therefore, a liberal interpretation of the technical rules of procedure may be allowed if only to further bridge the gap between an employee and an employer.
It would therefore be fitting to say that the rules shall be liberally interpreted in order to accord special protection to labor. This is not to say however that the rules may never be re laxed in favor of the employer, and that every labor dispute will be automatically decided in favor of labor.
In certain cases, of course, a liberal approach to the rules may be had even if it favors the employer. Such allowance, however, must be measured against standards stricter than that imposed against the worker, and only in compelling and justified cases where the employer will definitely suffer injustice should such liberal interpretation be disallowed. Unfortunately for RBSR, et al., this is not the situation in the present case.
Based on the dismissal document, it would appear that Reyes was being charged with either willful disobedience or insubordination, or gross and habitual neglect of duty, both of which are just causes for termination of employment under the Labor Code.
Interestingly, based on this show cause order, it would appear that the charges against Reyes changed from either dis obedience or neglect, to commission of a crime or offense.
In the present case, while it is true that Reyes was given sufficient opportunity to explain his side during the investigation, the Court cannot help but notice the muddled and vague charges against him. Specifically, it cannot be determined with reasonable certainty on what grounds the charges pressed against Reyes were based on, and which ones were proven. While it would appear that Reyes was initially charged with insubordination or neglect of duty, the show cause order surprisingly accused him of participation in the alleged theft/misappropriation, and neither is there any showing that the same has been established nor is it specifically mentioned as the reason for his dismissal. Instead, the termination letter sent to Reyes, which is a mirror copy of the ones sent to Bognot and Eusebio, merely employed general and loose statements. Neither is there any mention of which specific rule or policy Reyes allegedly violated. Surely, this is not the kind of notice contemplated by the Labor Code and its implementing rules. In view of all the foregoing, the Court finds that RBSR, et al. failed to comply with the due process requirements in dismissing Reyes.
In the present case, there is no question that Reyes’ refusal to certify the Report on Crimes and Losses was intentional. This is clearly disobedience. However, we find that the same is not attended by a wrongful and perverse mental attitude which warrants the ultimate penalty of dismissal. A review of the findings below will reveal that Reyes refused to certify said report based on his honest assessment that the report cannot be completely validated for lack of material data and evidence.
As found by the CA, Reyes refused to make the attestation on the reasoning that no independent investigation was conducted and that he cannot completely validate the report for lack of material data and evidence. This assertion finds support in Memorandum No. 2013-02051 dated February 14, 2013, and Memorandum No. 2013-02252 dated February 22, 2013, both sent by Reyes to no less than the officers and directors of RBSR. In these Memoranda, Reyes noted several deficiencies in the report and even made recommendations in order to make the same compliant with BSP regulations. In the Court’s view, this betrays RBSR, et al.’ claim that Reyes was involved in the theft/misappropriation allegedly committed by Bognot and Eusebio.
The Court recognizes that there is reason for RBSR, et al.’ disappointment, even infuriation, over Reyes and his actions. Surely, no employer would find pleasure in a disobedient employee. Be that as it may, imposing the ultimate penalty of dismissal for such action – which, as already mentioned, obtains justification – and for such single instance, is simply too harsh and downright unlawful. Besides, what is the penalty for the late submission of the report? A miniscule monetary fine of P150.00 to P450.00 per day of delay. Of course, this is not to encourage non-compliance with bank regulations, but is only mentioned to further highlight the point that the penalty of dismissal imposed upon Reyes was terribly disproportionate to his alleged infraction.
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