FACTS:

Wenifredo Farrol, the petitioner, worked as a station cashier at RCPI's Cotabato City station. On June 18, 1993, RCPI's district manager in Cotabato City informed their main office that funds from the branch were used for retirement benefits. On October 1, 1993, petitioner confirmed that there was a shortage of P50,985.37 in their branch's funds and he was required to explain the cash shortage within 24 hours. The next day, petitioner paid P25,000.00 to RCPI. On October 16, 1993, RCPI required petitioner to explain why he should not be dismissed. He wrote a letter explaining the missing funds and that he had already paid P25,000.00 to RCPI. After making two more payments, petitioner was informed he would be placed under preventive suspension. He made two more payments, leaving a balance of P6,995.37. RCPI sent a termination letter on November 22, 1993, stating reasons for termination. Petitioner requested reinstatement, unaware of the termination letter. In September 1995, petitioner expressed willingness to settle if given retirement benefits, but RCPI informed him that his employment had already been terminated. The case was submitted for voluntary arbitration, where the arbitrator ruled in petitioner's favor. RCPI appealed to the Court of Appeals (CA), which reversed the ruling. Petitioner filed a petition for review on certiorari, claiming illegal dismissal and denial of due process. The Court is tasked to resolve the validity of petitioner's dismissal.

ISSUES:

1. Whether or not petitioner was afforded due process in his dismissal from employment.

2. Whether or not petitioner's dismissal was for a just or authorized cause.

RULING:

1. Petitioner was not afforded due process in his dismissal from employment. The employer has the burden of proving that the dismissal is for a cause provided by the law and that it afforded the employee an opportunity to be heard and to defend himself. In this case, there was no evidence presented by the respondent to show that petitioner was given proper notice and hearing before his termination.

2. Petitioner's dismissal was not for a just or authorized cause. The respondent claimed that petitioner violated company rules and regulations, specifically, the deliberate withholding of collections to hide shortages. However, the respondent failed to present evidence to prove these allegations. Moreover, petitioner's explanation for the cash shortage and his previous payments to the respondent for the shortage were not taken into consideration.

PRINCIPLES:

• In cases involving the illegal termination of employment, the employer must observe the mandate of the Labor Code, i.e., the employer has the burden of proving that the dismissal is for a cause provided by the law and that it afforded the employee an opportunity to be heard and to defend himself.

• The employer must furnish the employee a written notice stating the particular acts or omissions constituting the grounds for his dismissal. This requirement aims to ensure that the employee is fully informed of the charges against him and given a chance to present his side.