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WATEROUS DRUG CORPORATION v. NLRC

FACTS:

Private respondent Antonia Melodia Catolico worked as a pharmacist for petitioner Waterous Drug Corporation. She received warnings against prohibited practices such as dispensing medicine to employees chargeable to their accounts and negotiating with suppliers without consulting the Purchasing Department. In January 1990, an irregularity involving Catolico and Yung Shin Pharmaceuticals, Inc. was discovered, where medicine was purchased at an overpriced amount. Catolico denied receiving the check and alleged it was a Christmas gift. She also claimed her preventive suspension was motivated by personal conflict with her supervisor. Catolico was subsequently terminated and filed a complaint for unfair labor practice, illegal dismissal, and illegal suspension. The Labor Arbiter found the dismissal and suspension to be without just cause and due process, and awarded Catolico separation pay, back wages, and additional compensation for illegal suspension. The NLRC affirmed the decision, stating that petitioners failed to prove just cause for Catolico's dismissal and that the check was inadmissible as evidence. Petitioners filed a petition for certiorari to challenge the NLRC's findings and the application of constitutional provisions.

ISSUES:

  1. Whether or not Catolico was denied due process.

  2. Whether or not Catolico was unjustly dismissed.

  3. Whether or not the constitutional provision on the right to privacy and communication was violated.

  4. Whether the dismissal of the employee was justified based on the evidence presented.

  5. Whether the employee's dismissal was grounded on mere suspicion.

  6. Whether the constitutional rights of the employee were violated.

RULING:

  1. Catolico was denied due process. It was established that she was not given a hearing after the issues were joined and that no other evidence, aside from the sales invoice and the check, were submitted by the employer. Procedural due process requires that an employee be given reasonable time to answer the charges against him, allowed ample opportunity to be heard and defend himself, and assisted by a representative if desired. In this case, Catolico was dismissed without being given the opportunity for a hearing, thus violating her right to due process.

  2. Catolico was unjustly dismissed. The burden is on the employer to prove just and valid cause for dismissing an employee. In this case, WATEROUS failed to discharge this burden and show just and valid cause for Catolico's dismissal. Therefore, her dismissal was considered unjustified.

  3. The violation of the constitutional provision on the right to privacy and communication was not addressed in the ruling.

  4. The dismissal of the employee was not justified and was grounded on mere suspicion. The evidence presented did not establish an overcharge or the employee's involvement in any inappropriate transaction. The dismissal based on suspicion is not a valid cause for termination under the Labor Code. Additionally, the dismissal did not rest on substantial grounds and violated the employee's right to privacy of communication and against unreasonable searches and seizures. However, the NLRC's decision to award separation pay to the employee instead of reinstatement is upheld.

PRINCIPLES:

  • Procedural due process requires that an employee be apprised of the charge against him, given reasonable time to answer the charge, allowed ample opportunity to be heard and defend himself, and assisted by a representative if desired.

  • The burden is on the employer to prove just and valid cause for dismissing an employee, and failure to do so would result in a finding that the dismissal is unjustified.

  • The dismissal of an employee must be justified based on substantial grounds and not mere suspicion.

  • Suspicion is not a valid cause for termination under the Labor Code.

  • The dismissal of an employee for loss of trust and confidence must also be based on substantial grounds and not on the employer's arbitrariness, whims, caprices, or suspicion.

  • Constitutional rights, such as the right to privacy of communication and against unreasonable searches and seizures, should be protected even in private employment.

  • The award of separation pay in lieu of reinstatement is computed at one month's salary for every year of service, unless otherwise agreed upon by the parties.