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STANLEY FINE FURNITURE v. VICTOR T. GALLANO

FACTS:

The case involves a petition for review on certiorari filed by Elena Briones seeking to reverse the decision of the Court of Appeals. The Court of Appeals found grave abuse of discretion by the National Labor Relations Commission (NLRC) and reinstated a decision by the Labor Arbiter which found that respondents Victor Gallano and Enriquito Siarez were illegally dismissed. Victor and Enriquito filed a labor complaint for underpayment/non-payment of salaries, wages, ECOLA, and 13th month pay. Victor and Enriquito were allegedly scolded for filing the complaint and were later not allowed to work. The Labor Arbiter ruled that Victor and Enriquito were illegally dismissed and awarded moral and exemplary damages, but the NLRC reversed this decision. Victor and Enriquito filed a motion for reconsideration with the NLRC, which was denied. They then filed a petition for certiorari before the Court of Appeals. The Court of Appeals found that Stanley Fine had unlawfully terminated Victor and Enriquito and reinstated the decision of the Labor Arbiter. Stanley Fine filed a motion for reconsideration, which was denied. Elena Briones filed a petition for review, arguing that Victor and Enriquito were illegally dismissed and that the monetary claims should not have been awarded. The case has now reached the Supreme Court for resolution of procedural and substantive issues.

ISSUES:

  1. Whether the filing of an Establishment Termination Report is an act of dismissal.

  2. Whether counsel's allegation that an employee was dismissed due to the filing of an "unmeritorious" case against the employer is binding.

  3. Whether a Labor Arbiter can award monetary claims based on the allegations in the complaint form.

  4. Whether the award of moral and exemplary damages and attorney's fees is proper even without supporting evidence.

  5. Whether Elena's statement labeling the labor complaint as "unmeritorious" is binding against her.

  6. Whether the lack of issuance of notices of dismissal supports the finding of illegal dismissal.

  7. Whether the photocopies of the memoranda have probative value.

  8. Whether the pieces of evidence presented by Elena could save her cause.

  9. Whether the court erred in awarding money claims and damages.

  10. Whether Elena's claim of payment for respondents' ECOLA is refuted by her own admission.

  11. Whether Elena's allegations of payment of other monetary claims are supported by substantial evidence.

  12. Whether respondents presented evidence to support their entitlement to damages.

RULING:

  1. The Court of Appeals found that there was no just cause for the dismissal of the employees since no valid cause for dismissal was shown, and there was no compliance with the two-notice requirement.

  2. The Court ruled that generally, errors of counsel bind the client. Therefore, counsel's allegation that an employee was dismissed due to the filing of an "unmeritorious" case against the employer is considered binding unless there is evidence to the contrary.

  3. The Court of Appeals held that a Labor Arbiter can award monetary claims based on the allegations in the complaint form, as long as there is sufficient evidence to support such claims.

  4. The Court did not explicitly discuss whether the award of moral and exemplary damages and attorney's fees is proper without supporting evidence.

  5. The Court of Appeals did not err in affirming the Labor Arbiter's ruling that Elena's statement, labeling the labor complaint as "unmeritorious," is an admission against interest. The general rule is that errors of counsel bind the client, and there is no proof of gross negligence on the part of Elena's lawyer. Thus, the statement is binding against Elena.

  6. The lack of issuance of notices of dismissal supports the finding of illegal dismissal. Article 277(b) of the Labor Code and Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code require employers to provide written notice and an opportunity to be heard to employees whose employment is sought to be terminated. The failure to comply with these procedural due process requirements strengthens the finding of illegal dismissal.

  7. The photocopies of the memoranda presented by Elena were considered to have no probative value since they are mere photocopies and were not certified true copies of documents. The court did not consider the statement in Lee v. Regional Trial Court of Quezon City, Branch 85 as the controlling doctrine, as it was not directly related to the present case.

  8. Even if the photocopies of the memoranda were considered, they would not save Elena's cause as there were discrepancies and possible antedating of the memoranda. These pieces of evidence were issued as an afterthought.

  9. The Court of Appeals did not err in awarding money claims and damages as the evidence presented by Elena, specifically Annexes 7 to 74, were not considered admissible due to being mere photocopies and prone to tampering. Elena's own admission regarding non-payment further refuted her claim.

  10. The Court of Appeals found that Elena admitted that respondents were not paid their ECOLA and that she asked for exemption from doing so. Therefore, Elena's claim of payment is refuted by her own admission.

  11. Elena's allegations of payment of other monetary claims, such as 13th month pay, holiday pay, and premium for holiday pay, were not supported by substantial evidence. The vouchers she submitted do not prove her claim of payment.

  12. The Court of Appeals did not err in upholding the Labor Arbiter's award of moral and exemplary damages. The circumstances surrounding respondents' dismissal showed malice, as a retaliatory measure for filing a labor complaint. Elena also violated respondents' rights to substantive and procedural due process.

PRINCIPLES:

  • Grounds for termination of employment are provided under Article 282 of the Labor Code.

  • Abandonment of work is considered a form of neglect of duty and requires two elements to concur.

  • The burden of proof to show that there was unjustified refusal to go back to work rests on the employer.

  • The filing of a complaint for illegal dismissal negates the allegation of abandonment.

  • Errors of counsel generally bind the client unless there is evidence to the contrary.

  • Errors of counsel bind the client, except in cases of gross negligence that deprive the client of due process.

  • Admission against interest is the best evidence and binds the person who made it, unless shown to be made through palpable mistake.

  • The lack of issuance of written notice and the opportunity to be heard supports the finding of illegal dismissal.

  • The first written notice served to employees should contain specific causes or grounds for termination and provide them with a reasonable opportunity to submit their explanation. The notice should also contain a detailed narration of the facts and circumstances for the charge. (First Issue)

  • After the first notice, a hearing or conference should be conducted where employees can explain and present evidence and defenses, with the opportunity to be represented by a representative or counsel. (Second Issue)

  • After determining justified termination, a written notice of termination indicating that all circumstances have been considered and grounds have been established should be served to the employees. (Second Issue)

  • Photocopies of documents may not have probative value and should be certified true copies to be admissible. (First and Third Issues)

  • Discrepancies and possible antedating of documents may affect their credibility and evidentiary value. (Second Issue)

  • Non-payment can refute a claim for payment presented by the party claiming it. (Third Issue)

  • Workers have legal rights and procedures to claim their rights.

  • Employers should give workers what they are due in law and as human beings to avoid legal action.

  • Labor is not merely a factor of production, but a human product that deserves respect.