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PHILIPPINE NATIONAL BANK v. TERESITA FE A. GREGORIO

FACTS:

The case involves Teresita Gregorio, an employee of Philippine National Bank (PNB), who was dismissed from her employment based on allegations of gross misconduct and irregular transactions as the manager of PNB Sucat. PNB's Internal Audit Group (IAG) conducted an investigation that revealed irregular lending activities conducted by Gregorio and another employee, Gloria Miranda. Gregorio was accused of convincing depositors to invest in a PNB product with above-market interest income yield, requiring them to avail of a loan secured by their deposits with PNB Sucat. The loan proceeds were then loaned to other borrowers at a 5% monthly interest, with 3% going to the depositors as income interest yield and 2% as commission for PNB Sucat. The IAG also found various irregular transactions, such as the approval of loans without consent and acceptance of managers' checks without proper endorsement. Gregorio was charged with gross misconduct and dishonesty based on affidavits from depositors.

In her defense, Gregorio submitted affidavits of retraction from the witnesses who initially implicated her. However, the Panel conducting the investigation did not give credence to these affidavits, claiming that the original copy of one affidavit was not presented and that affidavits of retraction are generally unreliable. The Panel recommended dismissing Gregorio from service, and PNB complied. Gregorio then filed an illegal dismissal complaint before the NLRC, which initially ruled in her favor. On appeal, the NLRC reversed the decision and dismissed Gregorio's complaint, considering the affidavits and the result of the investigation as sufficient basis for her dismissal. Gregorio filed a special civil action for certiorari before the CA, which granted her petition and reinstated the decision of the Labor Arbiter. PNB now challenges the CA's ruling before the Supreme Court, arguing that there was sufficient evidence to warrant Gregorio's dismissal, including the affidavits, affidavits of retraction, and Gregorio's answers to the charges. Gregorio, on the other hand, claims that there was no factual basis for her dismissal and raises the issue of a due process violation for a newly raised allegation by PNB.

ISSUES:

  1. Whether the Court of Appeals correctly found that the NLRC acted with grave abuse of discretion.

  2. Whether the Court of Appeals correctly ruled on the presence or absence of grave abuse of discretion on the part of the NLRC.

  3. Whether NLRC decisions are subject to appeal.

  4. Whether the CA can review NLRC decisions.

  5. Whether the CA can correct errors in appreciating evidence in an NLRC decision.

  6. Whether the allegations raised in the petition for certiorari filed before the CA show grave abuse of discretion by the NLRC.

  7. Whether the Philippine National Bank (PNB) presented sufficient evidence to prove that Gregorio committed acts of gross dishonesty, gross misconduct, and willful breach of trust, which are just causes for termination.

  8. Whether the opportunity to confront one of the witnesses in the company investigation, Pollard, is necessary to meet the requirements of due process.

  9. Whether the affidavits of retraction executed by Rebollo and Villar should be considered as evidence.

  10. Whether or not the NLRC committed grave abuse of discretion in ruling that the evidence presented by the petitioner is insufficient to prove her innocence.

  11. Whether or not the CA erred in finding that the NLRC Decision is tainted with grave abuse of discretion.

RULING:

  1. The petition is granted. The Court held that a special civil action for certiorari under Rule 65 is not a substitute for an appeal and is only proper when there is grave abuse of discretion amounting to lack or excess of jurisdiction. The Court also emphasized that in a petition for certiorari, the inquiry is limited to issues of jurisdiction or grave abuse of discretion, and errors of judgment are not within its province. The review of the Court is limited to questions of law, specifically, whether the Court of Appeals correctly ruled on the presence or absence of grave abuse of discretion on the part of the NLRC.

  2. NLRC decisions are not subject to appeal unless there is a law expressly granting it.

  3. The CA can review NLRC decisions through a petition for certiorari under Rule 65.

  4. The CA can correct errors in appreciating evidence in an NLRC decision, but only if there is grave abuse of discretion.

  5. The allegations raised in the petition for certiorari do not show grave abuse of discretion by the NLRC.

  6. The Supreme Court (SC) agrees with the National Labor Relations Commission (NLRC) that the evidence presented before them, taken together, are adequate to convince a reasonable mind that Gregorio engaged in unauthorized lending activities within PNB Sucat. The evidence showed that Gregorio facilitated loans secured by deposit hold-outs of PNB Sucat's depositors and lent the proceeds to other people. The evidence also revealed that the promised commission for the bank was not reflected in any records. Therefore, PNB presented sufficient evidence to prove the just causes for Gregorio's termination.

  7. The SC agrees with the NLRC that there was no need for Gregorio to confront Pollard, as confronting a witness is not a matter of right in company investigations. It is sufficient that Gregorio had the opportunity to be heard and refute the allegations in Pollard's affidavit, in order to meet the requirements of due process.

  8. The SC agrees with the NLRC's appreciation of the affidavits of retraction. Retractions are generally unreliable and looked upon with considerable disfavor by the courts as they can easily be fabricated. The affidavits of retraction were considered by PNB but found to be unreliable. The weight of evidence is highly suspect as Villar's affidavit was not identified and authenticated, while Rebollo's affidavit actually affirmed Gregorio's participation in the lending activities within PNB Sucat.

  9. The NLRC did not commit grave abuse of discretion in appreciating the evidence on record and finding that the petitioner's evidence is insufficient to prove her innocence.

  10. The CA erred in finding that the NLRC Decision is tainted with grave abuse of discretion.

PRINCIPLES:

  • A special civil action for certiorari under Rule 65 is not an alternative to an appeal and cannot serve as a substitute for an appeal that was devised to circumvent the absence of a statutory basis for the remedy of appeal of NLRC decisions. (St. Martin Funeral Home v. NLRC)

  • Errors of judgment, as distinguished from errors of jurisdiction, are not within the province of a special civil action for certiorari under Rule 65. The extraordinary writ of certiorari will only lie if the NLRC acted capriciously and whimsically, equivalent to lack of jurisdiction, and if it is shown that the discretion was exercised arbitrarily or despotically. (Leonis Navigation Co., Inc. v. Villamater)

  • Quasi-judicial agencies, like the NLRC, have acquired expertise in the specific matters entrusted to their jurisdiction. Thus, their findings of facts are accorded respect and even finality if they are supported by substantial evidence. (Hagonoy Rural Bank, Inc. v. NLRC)

  • A petition for review on certiorari under Rule 45 is limited to questions of law, particularly whether the appellate court correctly ruled on the presence or absence of grave abuse of discretion on the part of the NLRC. (Career Philippines Shipmanagement, Inc. v. Serna)

  • NLRC decisions are final and not subject to appeal or review, except in cases of grave abuse of discretion.

  • The CA's review of NLRC decisions is limited to determining whether there was grave abuse of discretion, not the correctness of the judgment on the merits.

  • A petition for certiorari under Rule 65 must allege acts and circumstances showing grave abuse of discretion amounting to lack or excess of jurisdiction.

  • Grave abuse of discretion is defined as an act too patent and gross as to amount to an evasion of a duty or a virtual refusal to perform a duty, or an exercise of power in an arbitrary and despotic manner by reason of passion or personal hostility.

  • The burden of proof in employment dismissal cases is on the complainant to prove that the dismissal is not legal, while the respondent has the burden of proving that the dismissal was legal by establishing valid cause and compliance with due process.

  • An employee may be dismissed for a just or authorized cause under the Labor Code.

  • Substantial evidence is the quantum of proof required in cases filed before quasi-judicial bodies.

  • Confronting a witness is not a matter of right in company investigations to meet the requirements of due process; it is sufficient that the employee had the opportunity to be heard and refute the allegations.

  • Retractions are generally unreliable and viewed with disfavor by the courts as they can be easily fabricated. The reliability of an affidavit of retraction is determined by circumstances surrounding it and is subject to scrutiny.

  • The NLRC has the authority to determine the credibility of witnesses and the weight to be given to their testimonies. Absent any showing of arbitrariness, whimsicality, or capriciousness, the NLRC's appreciation of the evidence should be upheld. (Stonestown Suites vs. Red Line Tours Corporation, G.R. No. 183710, January 12, 2015)

  • In order for a party to be entitled to a writ of certiorari, he must sufficiently and clearly show the existence of any of the grounds for the issuance of such writ, which include grave abuse of discretion. Mere allegations are not enough; there must be substantial evidence to support the claim. (Pancake House, Inc. vs. Pineda, G.R. No. 178772, January 28, 2008)