Alilem Credit Cooperative v. Bandiola
REITERATIONFacts
The Antecedents: Respondent Salvador M. Bandiola, Jr., employed as a bookkeeper by petitioner Alilem Credit Cooperative, Inc., was accused of engaging in an illicit affair with a married woman named Thelma G. Palma. The accusation stemmed from a letter received by the cooperative's Board of Directors from Napoleon Gao-ay, Thelma's brother, detailing the alleged immoral conduct. Evidence presented included sworn statements from Melanie Gao-ay, who claimed to have witnessed respondent and Thelma sharing a bed and engaging in intimate acts, and Rosita Tegon, who saw Thelma asking respondent to accompany her. Further corroboration came from Emma Gao-ay Lubrin, Thelma's sister, who stated Thelma admitted to the affair, and Napoleon Gao-ay, who claimed Thelma lived with respondent despite family attempts to end the relationship. Agustina Boteras reported a confrontation where respondent's wife pleaded with Thelma to end the affair. Milagros Villacorte saw respondent and Thelma meeting at a hospital, and Julienne Marie L. Dalangey provided a certification indicating respondent attended a seminar with a female companion he introduced as his wife, though his actual wife was working elsewhere at the time. The cooperative also received a petition from fifty members demanding respondent's removal due to the alleged affair. Respondent denied the accusations, attributing them to the insecurity of some members and directors due to his popularity. Procedural History: Following a preliminary investigation and the formation of an Ad Hoc Committee, which concluded a prima facie case existed, the Board of Directors sent respondent a letter on July 10, 1997, informing him of the charges of illicit marital affair and directing him to a hearing. Respondent's request for postponement due to his lawyer's unavailability was denied, and the hearing proceeded. On July 16, 1997, respondent was terminated via Board Resolution No. 05, series of 1997, effective July 31, 1997. Respondent filed a complaint for illegal dismissal with the National Labor Relations Commission (NLRC). The Labor Arbiter dismissed the complaint, finding the dismissal valid and respondent's due process rights respected. However, the NLRC set aside the Labor Arbiter's decision, declaring the dismissal illegal due to the questionable existence and validity of the Personnel Policy and a lack of just cause, also finding a violation of due process regarding counsel. The Court of Appeals (CA) affirmed the NLRC's finding of illegal dismissal, though it considered the alleged affair as serious misconduct, it was not sufficiently connected to respondent's duties to warrant termination. The CA denied petitioner's motion for reconsideration. The Petition: Petitioner Alilem Credit Cooperative, Inc. filed this petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision and resolution. The petitioner argues that respondent's dismissal was valid, asserting that engaging in extramarital affairs was a clear violation of its Personnel Policy, which was known to the respondent and had been in effect even prior to the amendment that respondent questioned. The petitioner contends that the amendment did not introduce a new ground for termination but merely clarified existing grounds. They maintain that the evidence presented sufficiently proved the extramarital affair, constituting an act that brought discredit to the cooperative, and that respondent was afforded procedural due process, including notice of the charges, opportunity to explain, and a hearing. The petitioner seeks to have the CA's decision reversed and the Labor Arbiter's decision reinstating the validity of the dismissal reinstated.
Issue(s)
Whether the dismissal of respondent Salvador M. Bandiola, Jr. was valid, and whether the Alilem Multi-Purpose Cooperative (AMPC) Personnel Policy, specifically the ground for termination due to "illicit marital affairs," was valid and applicable. Whether the petitioner adequately proved respondent's engagement in extramarital affairs. Whether respondent was afforded procedural due process during the termination proceedings.
Ruling
The petition is GRANTED. The Court of Appeals Decision dated January 16, 2006 and Resolution dated July 5, 2006 in CA-G.R. SP No. 64554 are SET ASIDE. The Labor Arbiter's Decision dated April 30, 1998 in NLRC Case No. RAB-1-08-1144-97 (IS) dismissing respondent Salvador M. Bandiola, Jr.'s complaint against petitioner Alilem Credit Cooperative, Inc., is REINSTATED.
Ratio Decidendi
On the validity of the dismissal and the Personnel Policy: The Court found merit in the petition, reinstating the Labor Arbiter's decision that upheld the dismissal. It was undisputed that respondent was dismissed for engaging in extramarital affairs, a ground explicitly stated in petitioner's Personnel Policy. The Court clarified that the amendment to the Personnel Policy, which enumerated "illicit marital affairs" as an example of acts bringing discredit to the cooperative, did not create a new ground but merely interpreted the existing one. The old policy already included "commission of acts or commission (sic) of duties that bring discredit to the organization." Therefore, engaging in extramarital affairs was a valid ground for termination under both the old and new policies, and its effectivity as to respondent could not be questioned. An employer has the right to regulate employment and establish reasonable rules, which become part of the employment contract if made known to the employee. Termination is valid when an employee's lack of morals, respect, or loyalty is plainly demonstrated. On the sufficiency of evidence for extramarital affairs: The Court affirmed the Labor Arbiter's finding that the petitioner adequately proved respondent's engagement in extramarital affairs. The evidence consisted of sworn statements from relatives and friends of Thelma and respondent, who had direct knowledge or revealed circumstances indicating the relationship. The LA gave credence to these testimonies, noting that the witnesses, including the lover's brother, had no motive to lie and that their family reputation was also at risk. The Court acknowledged that while the affair might be personal, it was a ground for termination under the Personnel Policy and also raised concerns among cooperative members, leading to numerous complaints and petitions for respondent's removal due to his alleged immoral conduct. On procedural due process: The Court found that respondent was adequately afforded procedural due process. Petitioner conducted a preliminary investigation and formed an Ad Hoc Committee. Respondent was given notice of the prima facie case and directed to explain his side, which he opted to do orally. He was allowed to review the investigation report and was advised of his right to counsel. A hearing was conducted after these steps. The termination decision was embodied in Board Resolution No. 05, series of 1997, a copy of which was furnished to respondent, thus adequately notifying him of the decision. The Court rejected the claim that the denial of his request for postponement violated his right to due process, as he was still given an opportunity to defend himself.
Main Doctrine
An employer may validly terminate an employee for engaging in extramarital affairs if such conduct is explicitly stated as a ground for termination in the company's personnel policy and if procedural due process is observed. The act of engaging in extramarital affairs can be considered serious misconduct that brings discredit to the cooperative organization.