Case # 87 Agustilo vs CA et al.

GR 142875
Facts: Petitioner Edgar Agustilo was hired by respondent San Miguel Corporation
(SMC) as a temporary employee at its Mandaue Brewery in Mandaue, Cebu. He was
made permanent and designated as a safety clerk. Later on he was transferred to
the Engineering Department of the SMC Mandaue Brewery as an administrative
secretary. Sometime in 1991, SMC Mandaue Brewery adopted a policy that
managers would no longer be assigned secretaries and that only director level
positions may be given secretaries. As a result, petitioners position as
administrative secretary was abolished and he was transferred to the companys
Plant Directors Office-Quality Improvement Team (PDO-QIT). Petitioner was told that
his services would be terminated effective March 15, 1992 and that he would be
paid his benefits 30 days after he was cleared of all accountabilities. In a letter,
dated February 13, 1992, SMC notified the DOLE of its modernization program.
Petitioner then filed a complaint against respondents for unfair labor practice, illegal
dismissal, and payment of separation pay, attorneys fees, and damages.
The executive labor arbiter rendered a decision dismissing petitioners complaint for
lack of merit. Respondents filed a motion for reconsideration. On January 11, 1999,
the NLRC rendered a resolution affirming its decision with modification. On April 13,
1999, respondents filed a petition for certiorari with prayer for the issuance of a
temporary restraining order and/or injunction in the Court of Appeals. In the
meantime, petitioner filed before the NLRC Regional Arbitration Branch No. VII a
Motion for the Issuance of a Writ of Execution. On May 31, 1999, the labor arbiter
ordered the SMC to reinstate petitioner. However, on motion of respondents, the
Court of Appeals issued a temporary restraining order enjoining the execution of the
decision of the NLRC. The TRO lapsed after 60 days, but the labor arbiter refused to
enforce the writ of execution he had previously issued in view of the June 11, 1999
resolution of the Court of Appeals issuing the TRO. On October 22, 1999, the Court
of Appeals rendered its decision reversing the decision of the NLRC and reinstating
that of the labor arbiter. On April 6, 2000, it denied petitioners motion for
reconsideration. Hence, this petition for review on certiorari.
Issue: Whether or not the Court of Appeals cannot revise the factual findings of the
NLRC and substitute the same with its own.
Held:In the case at bar, the Supreme Court finds the dismissal of petitioner was a
valid management prerogative, thus, legal. Petitioner insists that the Court of
Appeals acted with grave abuse of discretion when it refused to dismiss the original
special civil action of certiorari filed by private respondents before it. He claims that
by substituting the factual findings of the NLRC, the Court of Appeals disregarded
the ruling laid down in the case of Jamer v. NLRC in which it was held that mere
variance in the assessment of the evidence by the NLRC resulting in its dismissal of
the complaints for illegal dismissal and by the labor arbiter finding the complainants
to have been validly dismissed did not necessarily warrant another full review of the

facts by the appellate court provided that the findings of the NLRC are supported by
the records. Applying the ruling in that case, petitioner argues that whatever error
of judgment the NLRC may have committed in this case is not correctible through an
original special civil action for certiorari before the Court of Appeals.
The contention has no merit. In St. Martin Funeral Homes v. NLRC, it was held that
the special civil action of certiorari is the mode of judicial review of the decisions of
the NLRC either by this Court and the Court of Appeals, although the latter court is
the appropriate forum for seeking the relief desired in strict observance of the
doctrine on the hierarchy of courts and that, in the exercise of its power, the Court
of Appeals can review the factual findings or the legal conclusions of the NLRC. The
contrary rule in Jamer was thus overruled.
Case # 88 Limketkai Sons Milling, Inc. vs Llamera GR no 152514
Facts: Petitioner Limketkai Sons Milling, Inc. (LSMI) with principal office in Cagayan
de Oro City is engaged in the manufacture and processing of corn oil and coconut
oilOn June 16, 1982, LSMI hired respondent Editha Llamera as a laboratory analyst,
assigned at the quality control department. Sometime in March 1994, LSMI
received reports that some of its oil products, particularly Marca Leon Cooking Oil
and Corn Oil had visible impurities and rancid taste. Hence, it directed some of its
employees, including respondent, to explain the reported adulteration. The
concerned employees, except respondent who was then on maternity leave,
submitted their respective written explanations. In the meanwhile, they were all
placed under preventive suspension. Forthwith, LSMI immediately conducted a
formal investigation. During the investigation, respondent, who was back from
maternity leave, denied having anything to do with the adulteration of LSMIs oil
products. On June 6, 1994, LSMI terminated the services of the suspended
employees. Respondent challenged her dismissal and filed against LSMI, a
complaint for unfair labor practice, illegal suspension and illegal dismissal, and
demanded payment of backwages, separation pay, maternity benefits, service
incentive leave pay, moral and exemplary damages and attorneys fees. Labor
Arbiter Conchita J. Martinez ruled in favor of respondent finding petioner guilty of
unfair labor practice and declaring the dismissal illegal. On appeal, the National
Labor Relations Commission (NLRC) reversed the above Decision. Not satisfied with
the ruling, respondent filed a motion for reconsideration with the NLRC. It was
denied for lack of merit. Thus, respondent filed a special civil action for certiorari
with the Court of Appeals. The appellate court found respondents petition partly
meritorious. Aggrieved by the CA Decision, LSMI filed a motion for reconsideration,
which the Court of Appeals, in its assailed Resolution, denied for lack of merit.
Hence, the instant petition
Issue: Whether or not the Court of Appeals erred in not according the NLRCs
evaluation of evidence due respect and finality.
Held: The general rule is that the findings of fact by the NLRC are deemed binding
and conclusive. However, where, as in the instant case, the findings of fact by the

NLRC contradict those of the Labor Arbiter, a departure from the general rule is
warranted. In St. Martin Funeral Home vs. NLRC, the Supreme Court said that the
Court of Appeals can review the factual findings of the NLRC in a special civil action
for certiorari. In this case, petitioners simply allege that respondents failure to
report to the quality control head the batch that did not meet the minimum
standard showed connivance to sabotage petitioners business. Not only is
petitioners logic flawed, it is an instance of arguing non sequitur. Said allegation
alone, without proven facts to back it up, could not and did not suffice as a basis for
a finding of willful breach of trust. The Supreme Court are thus constrained to hold
that petitioners failed to prove the existence of a valid cause for the dismissal of
respondent. Therefore, the dismissal must be deemed contrary to the provisions of
the Labor Code, hence illegal. The assailed CA Decision, its Resolution are hereby
affirmed.

Case # 89 Maralit vs PNB

Facts: In its 14 February 2000 decision, PNBs Administrative Adjudication Panel

found Maralit guilty of serious misconduct, gross violation of bank rules and
regulations, and conduct prejudicial to the best interest of the bank. Maralit violated
bank policies which resulted in the return of unfunded checks amounting to
P54,950,000. Accordingly, PNB dismissed Maralit from the service with forfeiture of
her retirement benefits effective at the close of business hours on 31 December
1998. PNB may rightfully terminate Maralits services for a just cause, including
serious misconduct. Serious misconduct is improper conduct, a transgression of
some established and definite rule of action, a forbidden act, or a dereliction of duty.
The Labor Arbiter held that PNB illegally dismissed Maralit and committed an act
oppressive to labor and that Maralit was entitled to retirement benefits, exemplary
damages, and attorneys fees. On appeal PNB claimed that the Labor Arbiter
gravely abused his discretion and erred in his factual findings, the NLRC held
that (1) there was no grave abuse of discretion on the part of the Labor Arbiter, (2)
the material facts as found by the Labor Arbiter were consistent with the evidence,
and (3) the award of exemplary damages lacked basis. On appeal by PNB, The Court
of Appeals held that the NLRC committed grave abuse of discretion when it affirmed
in toto the Labor Arbiters decision. The Court of Appeals found that Maralit was
under preliminary investigation when she filed her application for early retirement
and that she was afforded due process. Hence, this petition.

Issue: Whether or not the NLRC committed grave abuse of discretion

Held: Grave abuse of discretion arises when a court or tribunal exercises powers
granted by law capriciously, whimsically, or arbitrarily. Indeed, the law grants the
NLRC the power to review decisions of labor arbiters. However, the fact that the law
grants the NLRC the power to review decisions of labor arbiters does not
automatically rule out the possibility of grave abuse of discretion. Grave abuse of
discretion may arise if the NLRC exercises such power in a capricious, whimsical,
arbitrary, or despotic manner. Maralit claims that the Labor Arbiters findings that
she was not under preliminary investigation when she filed her application for early
retirement and that she was denied due process were errors of judgment, and thus
the Labor Arbiter did not commit grave abuse of discretion. The Court is
unimpressed. Labor officials commit grave abuse of discretion when their factual
findings are arrived at arbitrarily or in disregard of the evidence. In the present
case, the Labor Arbiter and the NLRC acted with grave abuse of discretion because
their factual findings were arrived at in disregard of the evidence. The evidence
shows that Maralit was under preliminary investigation when she filed her
application for early retirement. PNB consistently stated that payment of Maralits
retirement benefits shall be paid only after final resolution of the administrative
case against her, provided that she is not disqualified to receive such benefits. PNBs
7 July 1998 General Circular No. 1-355/98, which laid down the guidelines for the
availment of the SSIP. In its 14 February 2000 decision, PNBs Administrative
Adjudication Panel found Maralit guilty of serious misconduct, gross violation of
bank rules and regulations, and conduct prejudicial to the best interest of the
bank. Maralit violated bank policies which resulted in the return of unfunded checks
amounting to P54,950,000. Accordingly, PNB dismissed Maralit from the service with
forfeiture of her retirement benefits effective at the close of business hours on 31
December 1998. PNB may rightfully terminate Maralits services for a just cause,
including serious misconduct. Serious misconduct is improper conduct, a
transgression of some established and definite rule of action, a forbidden act, or a
dereliction of duty. Having been dismissed for a just cause, Maralit is not entitled to
her retirement benefits.