G.R. No.

169494             March 14, 2007

CABALEN MANAGEMENT CO., INC., MA.ESTELA O. NIEVERA, IAN TIONGSON, ADJI TIONGSON, ESTER O. NIEVERA and
ANASTACIA NAVAL, ADRIANO JR. CORPORATION, LEDA A. PANGILINAN, EVA S. CANDELARIA, ROSE MARIE
MORALES, DANILO SUNUBA, LETECIA DAVID, MARLON BULANADI, MA. THERESA L. GADDI and CONSUELO HALILI
REYES, Petitioners,
vs.
JESUS P. QUIAMBAO, GERALDINE M. PALERMO, RODEL B. PANGILINAN, WILLIAM F. LACSON, ROCHELLE B. DE LEON,
JOCELYN B. DEANG, EDGAR E. DE GUZMAN, VIZIER INOCENCIO, VINCENT EDWARD C. MAPUA and JESSEBEL G.
OBIEN, Respondents.

DECISION

CARPIO MORALES, J.:

Before this Court is a petition for review on certiorari assailing the April 29, 2005 Decision 1 of the Court of Appeals and Resolution
of August 25, 20052 in CA-G.R. SP No. 85159.

The assailed Decision reversed the finding of the National Labor Relations Commission (NLRC) and that of the Labor Arbiter that,
except for respondents Jesus P. Quiambao (Quiambao) and Geraldine M. Palermo (Palermo), the other respondents were validly
dismissed from employment for their various infractions of the Code of Conduct of petitioner Cabalen Management Co., Inc. (the
company). The assailed Resolution, on the other hand, denied petitioners’ motion for reconsideration.

Prior to their dismissal, respondents Quiambao, Palermo, Rochelle B. De Leon and Jocelyn B. Deang were working as dining
supervisor, cashier, receptionist, and kitchen supervisor, respectively, while respondents Jessebel G. Obien, Edgar E. De Guzman,
Rodel B. Pangilinan, William F. Lacson, Vizier Inocencio and Vincent Edward C. Mapua were waiters at the company’s Cabalen
restaurant, Quad, Glorietta branch.

On September 4, 2001, respondents received a memorandum placing each one of them on preventive suspension for 30 days
without pay and ordering them to explain within 48 hours reported violations of the company’s Code of Conduct.

In compliance with the memorandum, respondents filed their written explanations, denying or refuting the charges against them.

On October 4, 2001, respondents, with the exception of Quiambao and Palermo, were served with notices of dismissal after
petitioners adjudged them guilty of the charges.

The dismissal of respondents was based on the statements of two witnesses, Henry dela Vega Balen (Balen) and Roderick Malana
(Malana), their co-employees, that they had connived with one another in pocketing tips which were intended for the group, serving
food or drinks without receipts or with tampered ones, and committing like forms of stealing, resulting in losses or damages to the
company.

An audit report dated September 19, 2001 on the company’s accountable forms and on incidents of missing bar order slips (OS),
swapping of dining and bar OS, unrecorded bar OS issuance, and excessive cancellation of OS and official receipts, was also
considered as evidence against respondents.

As for Quiambao and Palermo, while they were directed to immediately report to the Human Resources Department (HRD), they
were allegedly not given any assignments.

Respondents thus filed three separate cases3 against herein petitioners, the company and Adriano Jr. Corporation, together with
the Cabalen restaurant at the Glorietta, for illegal dismissal and illegal suspension, with claims for 13th month pay, sick and
vacation leaves, monthly allowances, weekly tip, monthly signed chit, unpaid salaries, moral and exemplary damages, attorney’s
fees, and regularization for respondents Palermo, Pangilinan, Lacson, Deang and De Guzman. The complaints were later
amended to implead herein individual petitioners as respondents.

Labor Arbiter Virginia T. Luyas-Azarraga, finding that the evidence presented by petitioners had sufficiently proved the charges
against respondents Lacson, De Leon, Deang, Pangilinan, De Guzman and Obien, held, by Decision of November 27, 2002,4 that
they were validly dismissed from the service.

With respect to respondents Quiambao and Palermo, however, the Labor Arbiter ordered petitioners to reinstate them to their
previous positions "under the same terms and conditions prevailing as of September 4, 2001, but without backwages." 5 The two
were accordingly directed to return to work within 48 hours from receipt of the decision. All other claims, except for the
proportionate 13th month pay for 2001, were dismissed for lack of merit.

The complaints of Inocencio and Mapua, who failed to sign the position paper for the complainants, were dismissed for lack of
interest.
By Resolution of September 30, 2003,6 the NLRC affirmed the Labor Arbiter’s decision. In upholding the Labor Arbiter’s findings
and conclusions, the Commission found well-taken the observation that, stripped of herein respondents’ attacks on the persons of
herein individual petitioners, respondents had presented no material allegation or evidence to controvert the charges against them.

Respondents filed a motion for reconsideration of the NLRC resolution, with a supplemental manifestation 7 from respondent
Quiambao that he was not reinstated to his previous position, as ordered by the Labor Arbiter, but was instead assigned to the
company’s head office in a "floating status," and that on April 21, 2003, he was served a Notice of Termination of Service because
the company was said to be losing heavily and had to retrench to avoid closure.

Respondents’ motion for reconsideration was denied by the NLRC by Resolution of April 28, 2004 for lack of merit.8

On respondents’ petition for certiorari,9 the Court of Appeals, by Decision of April 29, 2005, reversed and set aside the NLRC
decision and resolution.

The appellate court found the statements of petitioners’ witnesses bereft of probative value, there being no clear showing when,
where, to and before whom those statements were made, aside from the fact that they were not sworn to before a notary public.

As for the audit report of September 19, 2001, the appellate court noted that it failed to state that respondents were responsible for
the reported irregularities; and that the procedures on valid dismissals laid down by the Labor Code and the company’s Code of
Conduct were not religiously followed.

Passing on the status of employment of respondents Palermo, Pangilinan, Lacson, Deang and De Guzman who were hired from
August 1997 to January 1999, the appellate court held that having served the company for more than a year, they should be
considered regular employees, their positions as cashier, receptionist, and waiters being reasonably necessary to the company’s
usual business.

The appellate court held, however, that the award of moral and exemplary damages, attorney’s fees and costs of suit was not in
accord with law and jurisprudence in the absence of proof that the dismissal was attended by fraud or bad faith.

Petitioners were thus ordered to reinstate respondents to their former positions without loss of seniority rights and other privileges
and to pay them their full back wages, allowances, and other benefits computed from the time their compensation was withheld up
to the time of their actual reinstatement.

WHEREFORE, the petition is granted, and the resolutions of the public respondent NLRC dated September 30, 2003 and April 28,
2004 are hereby reversed and set aside. Accordingly, petitioners are ordered reinstated to their respective former positions without
loss of seniority rights and other privileges, and to their full backwages, inclusive of allowances, and to their other benefits or
monetary equivalent computed from the time their compensation was withheld from them up to the time of their actual
reinstatement.

No pronouncement as to the costs.10

Their Motion for Reconsideration having been denied by the appellate court, petitioners lodged the present petition which hinges on
the sufficiency of evidence of a valid dismissal.

Amid these conflicting findings, which circumstance is a recognized exception11 to the general rule that only questions of law may
be entertained in a petition for review on certiorari,12 this Court is constrained to re-examine the sufficiency of the evidence proffered
by petitioners in dismissing respondents.

It is a well-established rule that the employer has the burden of proving a valid dismissal of an employee, 13 for which two requisites
must concur: (a) the dismissal must be for any of the causes expressed in the Labor Code;14 and (b) the employee must be
accorded due process, basic of which is the opportunity to be heard and to defend himself.15

To establish a just or authorized cause for dismissal, substantial evidence16 or "such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion" is required.17 Further required is that an employee sought to be
dismissed must be served two written notices before the termination of his employment. The first notice must apprise him of the
particular acts or omissions upon which his dismissal is grounded; the second, to inform him of the employer’s decision to terminate
his employment.18 While the failure of the employer to comply with these notice requirements does not make the dismissal illegal as
long as a just or authorized cause has been proved, it renders the employer liable for payment of damages because of the violation
of the worker’s right to statutory due process.19

Section 3 of Rule V of the New Rules of Procedure of the NLRC,20 which governs the proceedings before the Labor Arbiter,
provides:

Section 3. Submission of Position Papers/Memorandum. – Should the parties fail to agree upon an amicable settlement, either in
whole or in part, during the conferences, the Labor Arbiter shall issue an order stating therein the matters taken up and agreed
upon during the conferences and directing the parties to simultaneously file their respective verified position papers.
These verified position papers shall cover only those claims and causes of action raised in the complaint excluding those that may
have been amicably settled, and shall be accompanied by all supporting documents including the affidavits of their respective
witnesses which shall take the place of the latter’s direct testimony. The parties shall thereafter not be allowed to allege facts, or
present evidence to prove facts, not referred to and any cause or causes of action not included in the complaint or position papers,
affidavits and other documents . . . (Emphasis and underscoring supplied)

Section 9 of the same Rule states that "proceedings before a Labor Arbiter shall be non-litigious in nature" and that "subject to the
requirements of due process, the technicalities of law and procedure and the rules obtaining in the courts of law shall not strictly
apply thereto." It is sufficient that the documents submitted by the parties have a bearing on the issue at hand and support the
positions taken by them.21

In light of the afore-quoted provisions, there was no necessity for the statements of Balen and Malana to be sworn to before a
notary public or that the said witnesses be presented in person before the Labor Arbiter. For the statements to be of probative
value, however, they must measure up to basic evidentiary requirements.22

In IBM Philippines, Inc. v. NLRC,23 this Court clarified that the liberality in administrative procedure "does not go so far as to justify
orders without a basis in evidence having rational probative value." And in Uichico v. National Labor Relations Commission, 24 it
held:

x x x It is true that administrative and quasi-judicial bodies like the NLRC are not bound by technical rules of procedure in the
adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental
evidentiary rules. While the rules of evidence prevailing in courts of law or equity are not controlling in the proceedings before the
NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value. x x x.
(Emphasis and underscoring supplied)

In the instant case, only photocopies25 of the statements of Balen and Malana form part of the records despite petitioners’ reliance
thereon to prove respondents’ purported transgressions. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC26 held that the
unsigned photocopies of daily time records (DTRs), which were presented by the therein employer to show that its employee was
neglectful of his duties, were of "doubtful or dubious probative value."27

Indeed, the DTRs annexed to the present petition would tend to establish private respondent’s neglectful attitude towards his work
duties as shown by repeated and habitual absences and tardiness and propensity for working undertime for the year 1992. But the
problem with these DTRs is that they are neither originals nor certified true copies. They are plain photocopies of the originals, if
the latter do exist. More importantly, they are not even signed by private respondent nor by any of the employer’s representatives x
x x.

Likewise, although Balen and Malana’s statements bore their signatures, they are wanting in material particulars, the most glaring
of which are the dates of execution.28 Understandably, respondents objected to their admission, they claiming that the statements
were presented only after their cases for illegal dismissal were filed before the Labor Arbiter.29

In Balen’s statement, his name was hand printed on the first page thereof on the space provided therefor, but the spaces intended
for the date and the witnesses were left blank.

The purported transcript of Malana’s 15-page question-and-answer testimony, on the other hand, while bearing his hand printed
name and signature at the top rightmost margin of the first page and on every page thereafter, merely indicated the person making
the inquiry with the initials "TLG." While the initials may have referred to Theresa L. Gaddi, manager of the HRD, 30 this point was
never clarified by petitioners, hence, it remains in the realm of speculation and surmises. Neither were the omissions as to date and
other particulars rectified. The appellate court’s discrediting of the statements as bereft of rational probative value upon which a
decision or order may properly be based is thus well-taken.

Respecting the audit report, petitioners posit that the therein mentioned documented incidents-bases of faulting respondents were
so numerous to have been incurred in the normal course of business. It added that the statements of Balen and Malana regarding
the alleged wrongdoings of respondents who had possession of the accountable forms were corroborated by the audit report.

It bears noting that while the audit report covered a 20-month period (January 2000 to August 31, 2001), respondents had served
only partly in the restaurant’s Glorietta branch due to the company’s practice of rotating employees every so often. For that matter,
respondents Quiambao and Obien were assigned to the same branch in March and August of 2000, respectively; Deang and
Lacson, in October 2000; De Leon in April 2001; and De Guzman in June 2001 only. 31 Respondents’ alleged involvement in the
reported irregularities moreover appeared to be incongruent with the company’s awarding them of certificates 32 of commendation,
recognition or appreciation for their invaluable service during the same period.

Petitioners’ contention that the number of cancelled OS and receipts and the incidents of swapping dining OS with bar OS were
beyond the normal course of business deserves scant attention, petitioners not having established the average figures in the
ordinary course of its business.

All told, neither the statements of Balen and Malana nor the audit report could support a valid ground for dismissal.

It also does not help petitioners’ cause that they failed to follow rudiments of due process and even the rules laid down in their own
Code of Conduct. Section 2 of Rule XIV of the Omnibus Rules Implementing the Labor Code33 specifically provides, as follows:
Section 2. Standards of due process; requirements of notice. – In all cases of termination of employment, the following standards of
due process shall be substantially observed:

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

(a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee
reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of counsel, if the employee so
desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him;
and

(c) 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.

x x x x (Underscoring supplied)

The foregoing provision has been interpreted to mean that the written notice to the employees who stand to lose their employment
must specify the particular acts or omissions constituting the grounds for their dismissal. 34 The rule ensures that the employees are
able to answer the charges and to defend themselves from imputed wrongdoings before their dismissals are ordered.

A review of the charges in the Notice to Explain and Suspension of September 4, 2001 shows that most, if not all, were couched in
general terms. Thus, respondents Quiambao and Obien were charged with "negligence in the performance of duties resulting to
losses or damages amounting to more than ₱5,000.00" and "involvement in stealing in any form." On the other hand, Palermo,
Lacson and De Leon were charged with "issuing /serving food or drinks without corresponding receipts or [with] tampered receipts"
and "stealing in any form," while Pangilinan and De Guzman were charged with "pocketing tips intended for the group" and
"stealing in any form." The charges against Deang, meanwhile, consisted of "withholding information on administrative or legal
cases" and "stealing in any form."

Precisely because of petitioners’ failure to sufficiently state the acts or omissions constituting the alleged transgressions that
respondent Obien asked to be clarified of the charges against her.35 Because of the vagueness of the charges, it followed that
respondents could only issue a general denial.

The Corrective Action Report (CARE) furnished each of the respondents in accordance with the company’s Code of Conduct was
not any better. It did not contain the date/s when the alleged infractions were committed, 36 the person/s who reported the same for
investigation, or the signatures of the employees’ immediate supervisors.

Petitioners did not even heed their own procedures on disciplinary actions. The only facts extant in the records are that
respondents were issued above-said CARE Forms asking them to explain their alleged infractions within 48 hours; and they
subsequently received notices of dismissal after they submitted their written explanations. There is, however, nothing to show that
before their dismissal, respondents were informed of their immediate supervisors’ decision to terminate their services, or that they
were thereafter invited to an administrative investigation before the HRD manager or officer who is tasked to conduct the
investigation in the presence of the employees’ immediate supervisor/s and the witnesses, if necessary, as provided under Section
IV of the company’s Code of Conduct.37

No record of any administrative investigation proceeding, which under the company’s rules, was to be "minuted," had also been
presented. Hence, only petitioners’ allegation that the statements of the witnesses were taken as part of the administrative
investigation is before this Court. Allegations without proof do not deserve consideration.

Finally, on the dismissal of Quiambao allegedly on the ground of business losses, it was incumbent upon petitioners to prove it by
substantial evidence. It did not, however. In fact, Quiambao presented documents to disprove the validity of his retrenchment on
that ground. For petitioners’ failure to discharge its burden then, this Court is constrained to hold that respondent Quiambao’s
dismissal was not valid.

WHEREFORE, the Petition is DENIED. The challenged Decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice