550 SUPREME COURT REPORTS ANNOTATED

Philippine Associated Smelting and Refining Corporation (PASAR)

vs. National Labor Relations Commission
*

G.R. Nos. 82866-67. June 29, 1989.

PHILIPPINE ASSOCIATED SMELTING AND REFINING

CORPORATION (PASAR), petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, LABOR ARBITER JESSELITO
LATOJA, RUFO ELUMIR, and EDGARDO VILBAR, respondents.

Labor; Evidence; Illegal Dismissal; Findings of fact of administrative

bodies if based on substantial evidence are controlling, well established
rule.—It is a well-established rule that findings of fact of administrative
bodies, if based on substantial evidence, are controlling on the reviewing
authorities.
Same; Same; Same; Same; Not enough for an employer who wishes to
dismiss an employee to charge him with theft or some other wrongdoing.—
It is not enough for an employer who wishes to dismiss an employee to
charge him with theft or some other wrongdoing. The validity of the charge
must be established in a manner consistent with due process. Accusation
cannot take the place of proof. A suspicion or belief no matter how sincerely
felt cannot substitute for factual findings carefully established through an
orderly procedure.

PETITION for certiorari to review the resolution of the National

Labor Relations Commission.

The facts are stated in the opinion of the Court.

     Castillo, Laman, Tan & Pantaleon for petitioner.
     Remegio C. Dayandayan for private respondents.

BIDIN, J .:

This is a petition to review on certiorari the resolution of the

National Labor Relations Commission (NLRC) which affirmed the
Labor Arbiter’s decision ordering Philippine Associated Smelting &
Refining Corp. (PASAR) to reinstate Rufo Elumir and Edgardo
Vilbar “to their former positions without loss of

_______________
 * THIRD DIVISION.

551

VOL. 174, JUNE 29, 1989 551

Philippine Associated Smelting and Refining Corporation (PASAR)
vs. National Labor Relations Commission

seniority rights and privileges and to pay them their full backwages
computed from the date of their illegal dismissal up to the date they
are actually reinstated.”

The findings of the Labor Arbiter as adopted by the National Labor

Relations Commission are as follows:
“These are consolidated cases both for illegal dismissal brought by two
employees of respondent Philippine Associated smelting and Refining
Corporation (hereinafter, PASAR).
“Complainants RUFO ELUMIR and EDGARDO VILBAR were
employed by respondent on July 15, 1982 and March 3, 1984, respectively,
as Plant Operators at the Leyte Industrial Estate, Isabel, Leyte. Both were
assigned at the Selenium Section of the plant. They were dismissed on
December 23, 1985 from respondent’s employ for alleged pilferage of dore
metal (precious metals like gold and silver which are by-products of
PASAR).
“Complainants’ troubles began on November 22, 1989 when Henry
Berezo, a LINSI Security Guard detailed at the dore plant confessed to the
existence of a pilferage syndicate of which he himself was a member. He
implicated a number of PASAR employees, long them the two complainants
here. Berezo narrates in his statement (Exh. D):

‘Sometime in the last week of February 1985 while I was detailed at the main door
of Dore Plant, I was approached by Mr. Edgardo Vilbar, a Selenium operator, and
told me that they will bring out Dore Metal. He did it for two times but I refused. But
in the third time, because I was in need of money, I agreed. The Dore Metal was
brought thru Selenium. I cannot however, remember the date when VILVAR brought
out the metal. On March 4, 1985, I was given P2,000.00 pesos by VILBAR as my
share for the loot and it was given to me at a boarding house in Matlang. In the
month of May 1985, VILVAR again brought out Dore Metal and I was given
P3,000.00 pesos by him the same place in Matlang. In the month of July 1985, Mr.
Rufo ELUMIR, also a Selenium operator brought out Dore metal and I was given
P1,000.00 pesos by Mr. APOLINAR MONTANO as my share in the house of one
Mendola at Matlang.’

“Respondent created an Investigation Committee which placed

complainants and their alleged co-conspirators under preventive suspension.
Due process ran its course. The committee found complainants and the
others to have conspired and participated in the theft of

552
552 SUPREME COURT REPORTS ANNOTATED
Philippine Associated Smelting and Refining Corporation (PASAR) vs.
National Labor Relations Commission

dore metals.
“Was just cause for complainant’s dismissal proved in the present
proceeding?
This office finds the evidence presented by respondent insufficient to
conclude that complainants ought to be dismissed.
“Respondent relies solely on the ‘confession’ of Henry Berezo with no
other evidence, corroborative or otherwise, to speak of.
“Henry Berezo’s ‘confession’ asks more questions than it answers.
“How were complainants able to bring out dore metals from PASAR’s
dore plant?
“Respondent states emptily that complainants were dore operators. But
Berezo himself confirms complainant’s assertion that they were assigned at
the Selenium Section, not the Dore Section. It is uncontested that the rules
and regulations of respondent absolutely prohibit plant operators assigned at
the Selenium Section from entering Dore Section. Moreover, there are
security guards other than Berezo stationed at both dore and selenium
sections who are equipped with metal detection devices. There are,
additionally, teams of other security guards at the main gate assigned to frisk
or inspect bodily anyone including plant operators on their way out of the
plant. Even assuming that Berezo was indeed part of the conspiracy and
allowed complains to pass through him with stolen dore metals,
complainants still had the other security guards at either dore or selenium
sections and those at the main gate to contend with. Unless all or a very
large number of the security guards were part of the alleged conspiracy,
complainants or anybody else for that matter, could not have brought out
any dore metal illegally. But there is no showing of such widespread
conspiracy.
“Indeed, there is not even adequate evidence to establish conspiracy.
There is only the confession of Henry Berezo which under strict technical
rules is not even admissible as evidence against complainants. It is
miserably lacking in weight and sufficiency.
“Respondent’s evidence, it should be said, comes from a polluted source.
Complainants may have been implicated as easily as it were to deflect bulk
of the blame away from Berezo and pin it on complainants primarily and a
few others. Respondents never attempted to explain the circumstances
surrounding Berezo’s confession. Neither did he, credibly.
“Nor did respondent explain, through Berezo, when the alleged pilferage
of dore metals was committed or how much dore metal was taken out by the
alleged conspirators. While proof beyond reasonable

553

VOL. 174, JUNE 29, 1989 553

 Philippine Associated Smelting and Refining Corporation (PASAR) vs.
National Labor Relations Commission

doubt is not demanded in this proceeding, important details could have been
provided to convince this office that the charges against complainants bear
substance. There was none.
“While it is recognized that the power to dismiss employees falls within
sound management prerogative, this Office holds that the prerogative has
been improvidently wielded in these cases.” (Rollo, pp. 24-28).

The labor arbiter ruled that the two complainants were illegally
dismissed.
On appeal, the NLRC affirmed the labor arbiter’s decision in
toto.
Hence, this petition.
The petitioner corporation raises a lone issue in this petition, to
wit:

DID THE NLRC ACT CONTRARY TO LAW AND IN GRAVE ABUSE

OF DISCRETION IN DECIDING THAT THE DISMISSAL OF PRIVATE
RESPONDENTS WAS UNJUSTIFIED AND ORDERING PETITIONER
TO REINSTATE PRIVATE RESPONDENTS AND PAY BACKWAGES.

The petitioner corporation contends that the private respondents

were dismissed for a just cause, namely—loss of trust and
confidence as a result of the theft committed by the latter. This
contention clearly questions public respondents’ findings of fact.
It is a well-established rule that findings of fact of administrative
bodies, if based on substantial evidence, are controlling on the
reviewing authorities. (Doruelo v. Ministry of National Defense,
G.R. No. 51214, January 26, 1989; Bondoc v. Court of Industrial
Relations, G.R. No. 33955, January 26, 1989; Castro v. Court of
Appeals, G.R. No. 34613, January 26, 1989; Planters Products, Inc.
v. National Labor Relations Commission, G.R. No. 78524, January
20, 1989; Industrial Timber Corp. v. National Labor Relations
Commission, G.R. No. 83616, January 20,1989). After a careful
review of the records of the case, We find no reason to depart from
this general rule.
The basis for private respondents’ dismissal is Henry Berezo’s

554

554 SUPREME COURT REPORTS ANNOTATED

Philippine Associated Smelting and Refining Corporation (PASAR)
vs. National Labor Relations Commission

statement implicating them in the pilferage of dore metals.

The presence of conspiracy was not substantially proven in the
case at bar. As noted by the labor arbiter, petitioner “relies solely on
the ‘confession’ of Henry Berezo with no other evidence,
corroborative or otherwise, to speak of.”
We quote the Solicitor General’s observations, to wit:

“Perusal of the records shows that there was no just cause, to warrant
disciplinary action of dismissal against private respondents. The evidence
shows that private respondents were dismissed from employment by
petitioner on the basis of the alleged confession of Henry M. Berezo, a Linsi
security guard assigned at the Dore Plant, regarding the existence of a
pilferage syndicate. While there was an investigating committee created to
unearth the alleged anomaly, the committee merely inquired about the
names of employees involved in the pilferage of dore metals. The statements
of the lone material witness, Henry M. Berezo, both before the investigating
body and the Honorable Arbiter only show his participation and only
vaguely described how and when the illegal act was committed and what
was the particular participation of each member. Berezo simply enumerated
some names and the amount he allegedly received from them as the share of
the loot. He was not even aware of the quantity of metals brought out of the
plant. Even clarificatory questions were not answered squarely because
Berezo had no knowledge of them (pp. 27-33, Rec). As the Honorable Labor
Arbiter aptly put it, the evidence comes from a polluted source because the
circumstances as to how the confession came about were not explained.
“It was established that the company premises were heavily guarded
considering the nature of petitioner’s operations, so that each section was
guarded by a Linsi security guard who would routinely inspect the body of
any person who got in and out of any section in the premises especially in
the dore section where the precious metals are refined and stored. It is
inconceivable that private respondent could just bring out dore metals
without being detected since they have to pass several guards equipped with
technically efficient metal devices before they could reach the main gate
where all employees are frisked and/or bodily inspected by another team of
security guards. Moreover, plant operators have supervisors who also
routinely inspect all operators under them before they could leave their
particular section (p. 23, TSN, Case No. 0234-86 or p. 100, Vilvar).

555

VOL. 174, JUNE 29, 1989 555

Philippine Associated Smelting and Refining Corporation (PASAR) vs.
National Labor Relations Commission

“Undisputedly, there are rules and regulations absolutely prohibiting

plant operators assigned at Selenium Section, like private respondents, to
enter the Dore Section. Obviously, they could not just enter the Dore
Section without being noticed by other employees and the guards. That
being the case, petitioner could easily get several witnesses to testify that
indeed private respondents entered the Dore Section to support petitioner’s
claim that private respondents took precious metals from the Dore Section
and brought them out of the plant through the Selenium Section which was
also guarded by another security guard. Therefore, it was not established
that the act complained of was really committed by private respondents. No
report of losses was received by the management. Moreover, petitioner did
not demand accounting or inventory of stocks to determine if they really
incurred losses in their product which is a normal business activity
especially in petitioner’s business where strict inventory is a must.
Apparently, this was not resorted to as this would negate petitioner’s claim
of pilferage. The statement of petitioner’s witnesses Roger Buencamino,
Alberto Tubac, and Jimenez Guerrero did not contain any declaration
implicating private respondents to the alleged conspiracy or to the pilferage
(p. 26, Rec.) Still surprising was that the matter was not reported to the
police. Considering the seriousness of the offense and the financial damage
it would cause to the petitioner, they should have referred the matter to the
authorities for proper investigation. No criminal case was filed against
private respondents. The circumstances surrounding the alleged confession
was not clarified. The investigation conducted by the investigating body did
not give sufficient information which would shed light to the expose made
by Berezo. There was no independent investigation except the doubtful
confession of Berezo. No prima facie credence should be accorded to a
culprit’s admission about somebody else’s participation in a crime as the
obvious motive is to lessen his wrongdoing (p. 14, TSN, May 15, 1987).
Surely, it would be most unfair to consider private respondents as guilty
upon being merely implicated by someone caught redhanded. Suspicion is
not a fair and reasonable basis to give rise to breach of petitioner’s trust and
confidence as a ground for dismissal (Alberto, et al. v. Macondray Co., Inc.,
NLRC Case No. LR 3030). The Labor Arbiter and the NLRC found the
evidence on record wanting in some important factual aspects as to be able
to support the conclusion that there was misconduct on the part of private
respondents to justify loss of confidence by petitioner. Such being the case,
private respondents’ dismissal was illegal since there was no just cause as
required by the

556

556 SUPREME COURT REPORTS ANNOTATED

Philippine Associated Smelting and Refining Corporation (PASAR) vs.
National Labor Relations Commission

Labor Code.” (Rollo, pp. 55-58)

It is not enough for an employer who wishes to dismiss an employee

to charge him with theft or some other wrongdoing. The validity of
the charge must be established in a manner consistent with due
process. Accusation cannot take the place of proof. A suspicion or
belief no matter how sincerely felt cannot substitute for factual
findings carefully established through an orderly procedure.
 The petitioner has failed to show grave abuse of discretion
insofar as the finding of illegal dismissal is concerned. An award of
three years backwages without qualification or deduction is,
therefore, proper.
Reinstatement is, however, an entirely different matter.
The petitioner may have failed to establish with adequate
evidence the charges of theft of dore metals but it does not follow
that the losses from stealing are imaginary or totally unfounded. The
fact that the investigation was not more thorough or the case before
the public respondents not better handled does not mean that the
suspicions of dishonesty are actually without basis.
The petitioner cannot be compelled to retain employees whose
honesty and loyalty it sincerely doubts. It cannot adopt special
measures insofar as the private respondents are concerned,
continually watching and tailing them to insure that precious metals
are not spirited away. It would also be unfair to the employees to
continue working in an atmosphere of distrust and suspicion. The
strained relations between employer and employees stand in the way
of reinstatement. Termination benefits according to any existing
bargaining agreement, established company policy, or the applicable
law may be given in lieu of reinstatement. (Hydro Resources
Contractors Corp. v. Pagalilauan, G.R. No. 62909, April 18, 1989).
WHEREFORE, the questioned resolution of the National Labor
Relations Commission is hereby MODIFIED. The petitioner is
ordered to pay the private respondents the equivalent of three (3)
years backwages without qualification or deduction and to pay
separation benefits as above-stated in lieu of rein-

557

VOL. 174, JUNE 29, 1989 557

Sante vs. Employees’ Compensation Commission

statement.
SO ORDERED.

     Fernan (C.J.), Feliciano and Cortis, JJ., concur.

     Gutierrez, Jr., J., No part as one of the lawyers in this case is
now a partner of my son.

Resolution modified.

Note.—The right to dismiss or otherwise impose disciplinary

sanctions upon an employee for just cause and valid cause, pertains,
in the first place to the employer, as well as the authority to
determine the existence of said cause in accordance with the norms
of due process. (Richardson vs. Demetriou, 142 SCRA 505.)
 ——o0o——

© Copyright 2023 Central Book Supply, Inc. All rights reserved.