Sometime in 2012, several stockholders of the employer bank 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 said bank. The anomaly involved several millions of pesos collected from stockholders of the employer bank which, if not corrected, will certainly tarnish the image and integrity of the latter.
Acting on this anomaly, the employer bank conducted an investigation and confirmed the irregularities. It discovered that in the original receipts given to the stockholders, the stated price of shares ranged from Php250.00 to Php275.00, but in the duplicate copies retained by the employer bank, only Php100.00 was indicated. It also found that the original receipts were signed by the then president of the employer bank, while the duplicate copies were signed either by its then treasury head or branch manager.
Thus, to comply with regulations mandating the prompt report of anomalies to the Bangko Sentral ng Pilipinas (BSP), the Board of Directors of the employer bank approved a Report on Crimes and Losses and directed Ariel — its Compliance Officer — to certify the same. However, Ariel 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. Ariel further remarked that he was being pressured to certify the report.
Thereafter, Ariel claimed that instead of furnishing him the hard copies of the reports and relevant attachments to enable him to verify and certify the same, the employer bank issued him two show cause orders and put him on preventive suspension for neglect of duty. Meanwhile, the employer bank contended that several administrative hearings were scheduled to hear the side of Ariel, which he ignored.
On March 25, 2013, Ariel filed a complaint against the employer bank for illegal suspension and money claims. This complaint was subsequently amended to include illegal dismissal, in view of the eventual termination of his employment.
The employer bank did not file a position paper during the proceedings before the Office of the Labor Arbiter.
The Office of the Labor Arbiter then ruled that the dismissal of Ariel was without a valid cause and that he was denied due process for having been summarily dismissed.
The National Labor Relations Commission reversed the ruling of the Office of the Labor Arbiter. It adopted a liberal interpretation of procedural rules, relaxed the same and held that substantial justice must prevail over technicalities. Thus, it allowed the employer bank to submit countervailing evidence even on appeal. On the substantial issue, the National Labor Relations Commission found that Ariel was not illegally dismissed, since the employer bank was able to discharge the burden of proving that it had a just cause to terminate Ariel’s employment.
The Court of Appeals affirmed the Decision of the National Labor Relations Commission. The said Court found no grave abuse of discretion on the part of the National Labor Relations Commission in relaxing its procedural rules. For the Court of Appeals, the failure of the employer bank to file a Position Paper and submit evidence was justified and satisfactorily explained, since it was neither given summons, nor notified of the scheduled preliminary conference and further hearings after Ariel filed his amended complaint. On the substantive issue, the Court of Appeals ruled that Ariel was validly dismissed for a just and valid cause.
Ariel elevated his case to the Supreme Court to assail the decision of the Court of Appeals.
Ariel asserted that the Court of Appeals abused its discretion amounting to lack or excess of jurisdiction:
- in upholding the National Labor Relation Commission’s liberal application of the procedural rules in favor of the employer bank; and
- in ruling that he was validly dismissed from employment.
Was the liberal application of the procedural rules in favor of the employer bank warranted?
Apart from its finding that Ariel was illegally dismissed from employment, the Supreme Court ruled that the the National Labor Relations Commission and the Court of Appeals erred in allowing the employer bank to present evidence on appeal.
The Supreme Court reiterated established principles from jurisprudence and experts by stating that due process is a malleable concept anchored on fairness and equity. At its core is simply the reasonable opportunity for every party to be heard. 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. Likewise, the requirement of due process can be satisfied by subsequent due hearing.
In the present case, the Supreme Court ruled that the employer bank had been accorded ample opportunity to present its side during the proceedings before the Office of the Labor Arbiter based on the following findings:
- The employer bank unjustifiably missed at least two hearing dates: that on June 4, 2013, and that on June 19, 2013. With regard to the hearing on June 19, 2013, the Supreme Court stated that the employer bank missed the hearing despite having been directed to attend by the Office of the Labor Arbiter;
- The employer bank, at this point, had already obtained a copy of the amended complaint which would have enabled it to intelligently respond. According to the Court, the issuance of the summons would have been a mere superfluity;
- The employer bank’s absences were unexplained; and
- If the employer bank truly held sacred its right to due process, it should have wasted no time nor missed no opportunity to assert such right as early as during the initial stages of the proceedings. It should have at least pleaded for the Office of the Labor Arbiter to reopen the proceedings and admit its position paper, if there ever was one. At the very least, the employer bank was well-aware that a complaint was filed against it and failed to be proactive in the proceedings. The Court sensed employer bank’s cavalier attitude and remarked that it reeked of negligence and disrespect to duly instituted authorities and rules of procedures, which it could never tolerate.
While commending the National Labor Relations Commission and the Court of Appeals in upholding substantial justice, the Supreme Court reminded them such principle must always be balanced with respect and honest efforts to comply with procedural rules.
The Court stated that it cannot always be about substantial justice, especially to the point of disrespect and utter disregard to procedural rules. Imperative justice requires correct observance of indispensable technicalities precisely designed to ensure its proper dispensation. It cannot be overemphasized that procedural rules have their own wholesome rationale in the orderly administration of justice. Justice has to be administered according to the Rules in order to obviate arbitrariness, caprice, or whimsicality. It must never be forgotten that, generally, the application of the rules must be upheld, and the suspension or even mere relaxation of its application, is the exception.
In this regard, the Court emphasized the policy that although in labor cases, strict adherence to the technical rules of procedure is not required, this liberal policy should still be subject to rules of reason and fairplay. The liberality of procedural rules is qualified by two requirements:
- a party should adequately explain any delay in the submission of evidence; and
- a party should sufficiently prove the allegations sought to be proven.
The reason for these requirements, said the Court, is that the liberal application of the rules before quasi-judicial agencies cannot be used to perpetuate injustice and hamper the just resolution of the case. Neither is the rule on liberal construction a license to disregard the rules of procedure.
In the present case, the Court highlighted the fact the employer bank failed to adequately explain and justify their non-participation in the proceedings before the Office of the Labor Arbiter.
For the Court, the application of a more liberal policy was unwarranted, contrary to the rulings of the National Labor Relations Commission and the Court of Appeals.
At any rate, the Court maintained that the employer bank in the present case is not entitled to be accorded a liberal interpretation of the rules; the same being primarily granted for the employee’s favor, and not the employer.
The Court explained that 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.1Article II, Section 18 of the 1987 Constitution provides: “SECTION 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.” Meanwhile, Article XIII, Section 3 states: “SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.” Lastly, Article 4 of PD 442 or the Labor Code, provides: Article 4. Construction in favor of labor. — All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.” 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. 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, the former cannot be expected 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.
The Court clarified that it is not saying that the rules may never be relaxed 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. The Supreme Court stated that such was not the situation of the employer bank in the present case.
- Reyes v. Rural Bank of San Rafael (Bulacan), Inc., G.R. No. 230597, March 23, 2022.
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