G.R. No.

130617 1/16/23, 12:15 AM

G.R. No. 130617

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 130617 August 11, 1999

MA. LIZA DE GUZMAN, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and REX
BOOKSTORE, INC., respondents.

DAVIDE, JR., CJ.:

Assailed in this special civil action for certiorari under Rule 65 of the
Rules of Court is the decision1 of public respondent National Labor
Relations Commissions (NLRC) of 20 May 1997, which affirmed with
modification the decision of the Labor Arbiter of 17 December 1996.
The subsequent resolution2 of the NLRC of 10 July 1997, denying
petitioner's partial motion for reconsideration is likewise impugned.

Petitioner Ma. Liza de Guzman (hereafter DE GUZMAN) was

employed by private respondent Rex Bookstore, Inc. (hereafter REX)
on 17 April 1989 as cashier. On 18 September 1995 DE GUZMAN was
dismissed for alleged dereliction of duty in violation of REX's rules
and regulations. At the time of her dismissal, she was receiving a
daily wage of P164.25.1âwphi1.nêtnone

DE GUZMAN's dismissal stemmed from an incident on 5 August

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1995 when she made a double payment to a book agent. Instead of

paying the agent the amount of two thousand seven hundred sixty
pesos (P2,760.00) for a single transaction, she paid the amount of five
thousand five hundred twenty pesos (P5,520.00). Thus, in its
memorandum of 12 August 1995, REX ordered DE GUZMAN to
explain within 48 hours why she should not be penalized for
dereliction of duty pursuant to Section 1A, Article III of REX's rules
and regulations and suspended her for thirty (30) days beginning 14
August 1995 pending the investigation of the case against her.3

In compliance with the aforesaid memorandum, DE GUZMAN

submitted to REX her explanation dated 14 August 1995.4 She alleged
therein that since she was hired in 1989 it has been the company's
procedure in paying its freelance agents that the sales clerk will
make two copies of the unofficial receipt of payments, one given to
REX and the other to the agent. However, on 5 August 1995 the sales
clerk, Emmie Idio, issued to a sales agent two unofficial receipts for
the same transaction. Both receipts bore the identical amount of two
thousand seven hundred sixty pesos (P2,760.00). The agent then
presented both receipts to DE GUZMAN. Noting the two receipts, DE
GUZMAN asked the agent whether he made two deliveries on that
day. When the agent answered in the affirmative, DE GUZMAN paid
the agent five thousand five hundred twenty pesos (P5,520.00)
corresponding to the total amount of the receipts. She claimed that
she failed and did not have the opportunity to verify from Emmie
Idio about the issuance of the two receipts because on that day there
were many customers.

DE GUZMAN contended that she cannot be held responsible for the

overpayment as she merely followed the usual procedure in the
company. It should be the sales clerk, Emmie Idion, who should be
held responsible for the issuance to the agent of two receipts.

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Not satisfied with her explanation, REX, through Roque C. Solomon

of its Personnel Department, served on DE GUZMAN on 18
September 1995 a confidential memorandum informing her of the
termination of her services. The memorandum reads:

The decision on your case has been released under RBS-PRES

95-001 dated September 14, 1995 the dispositive portion of
which reads as follows:

. . . Management is left with no alternative but to affirm the

recommendation of the Fact Finding Committee not only to
dismiss her (referring to Miss Liza de Guzman) from the
Company but to seek recovery of the amount of P2,760.00 if
not intentionally misappropriated.

By copy of this memo, the concerned supervisors shall ensure

that the liquidation of accountability and the proper turnover of
responsibilities are carried out to protect the interest of the
company.

Please be guided accordingly.5

Earlier, on 5 August 1995, a day after she was placed under preventive
suspension, DE GUZMAN filed a complaint for illegal suspension
with the National Capital Region-Arbitration Branch of the NLRC.
The case was docketed as NLRC NCR Case No. 00-08-05777-95.6

Immediately after her dismissal from the service, DE GUZMAN

amended her complaint to include illegal dismissal and claims for
thirteenth-month pay and attorney's fees.7 The complaint was
further amended on 18 September 1995 and 10 October 1995 to
include claims for payment of actual, moral and exemplary
damages.8

In its Answer to the complaint, REX alleged that the purported defect
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in the disbursement procedure as claimed by DE GUZMAN cannot

be used by her as an excuse for her negligence and that the payment
made to the agent without proper authorization from the supervisor
violated REX's standard operating policy that "no disbursement of
fund may be made by a cashier without the approval of his/her
immediate supervisor."

On 17 December 1996, Labor Arbiter Salimathar B. Nambi rendered a

decision9 in favor of DE GUZMAN, the dispositive portion of which
reads:

Accordingly, respondent is hereby adjudged to reinstate

complainant without loss of seniority rights and other privileges
and to pay complainant her full back wages inclusive of
allowances, computed from the time of her termination
(September 14, 1995) up to the time of her actual reinstatement.

Respondent is likewise ordered to pay complainant her 13th

month pay for the year 1995 and 1996. Further, respondent is
ordered to pay complainant P10,000.00 by way of attorney's
fees. The claim for actual, moral and exemplary damages are
hereby dismissed for lack of merit since there were [sic] no
evidence presented and submitted in support thereto.

SO ORDERED.

REX appealed the decision to the NLRC.

On 20 May 1997, the NLRC rendered a decision10 affirming with

modification the decision of the Labor Arbiter by ordering the
payment of separation pay in lieu of reinstatement and deleting the
award of back wages and attorney's fee. The decretal portion of the
decision reads:

PREMISES CONSIDERED, the Decision dated December 17, 1996

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is hereby MODIFIED by ordering respondent to pay complainant

the amount of thirty four thousand one hundred sixty four
pesos (P34,164.00) as separation pay. Respondent's motion for
Issuance of Temporary Restraining Order and Writ of
preliminary Injunction is hereby DISMISSED for having been
rendered moot and academic.

SO ORDERED.

In deleting the award of back wages, the NLRC rationalized as

follows:

We disagree with the Labor Arbiter's finding that respondent

failed to substantiate complainant's negligence. As correctly
argued by respondent, complainant herself admitted that she
failed to inquire the veracity of the two unofficial receipts
(Annexes "B" and "B-1") of respondent's position paper.
(Records, p. 37) which were presented to her for payment by the
agent. Prudence dictates that she should have verified the
veracity of said receipts considering the fact that they reflected
identical transactions. In fact, she admitted disbelief thereof.
(Annex "O" of Complainant's Position Paper, Records, p. 23).
That, there were many customers on that day is not a valid
excuse for her not to verify said receipts from the sales clerk
who issued the same or from her immediate supervisor.

However, while we find that complainant was negligent it

cannot be considered gross as to warrant her termination from
the service. As the facts of the case show, the error committed
was not the fault of the complainant alone. The sales clerk who
issued two (2) unofficial receipts to the agent, contrary to the
usual procedure of the company, is also partly to be blamed in
the incident. Further, the agent also made misrepresentation to
the complainant.
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Taking into consideration the factual circumstances of the case,

the period within which complainant was out of work shall be
considered as her penalty. Stated differently, she is not entitled
to backwages. . . . .11

In a Partial Motion for Reconsideration, DE GUZMAN asked for a

modification of the decision to include payment of back wages. The
NLRC denied the motion in its resolution of 10 July 1997.12

DE GUZMAN then filed the instant special civil action. She asserts
that the NLRC committed grave abuse of discretion amounting to
lack or excess of jurisdiction when it modified the Labor Arbiter's
decision by deleting the grant of back wages as penalty for her
negligent act despite the affirmance of the Labor Arbiter's finding
that her dismissal was illegal. Such finding entitled her not only to
separation pay but also to back wages and that the deletion of the
latter as penalty is too harsh and grossly disproportionate to the
infraction she committed.

We find merit in this petition.

The general rule is that where there is a finding of illegal dismissal,

an employee is entitled to reinstatement and to receive back wages
from the date of his dismissal up to the time of his reinstatement.13

The normal consequences of a finding that an employee has been

illegally dismissed are, firstly, that the employee becomes entitled to
reinstatement to his former position without loss of seniority rights
and, secondly, the payment of back wages corresponding to the
period from his illegal dismissal up to actual reinstatement. The
rationale therefor is clearly obvious. Reinstatement restores the
employee who was unjustly dismissed to the position from which he
was removed, i.e., to his status quo ante dismissal, while the grant of
back wages allows the same employee to recover from the employer

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that which he had lost by way of wages as a result of his dismissal.

These twin remedies of reinstatement and payment of back wages
make whole the dismissed employee, who can then look forward to
continued employment. These two remedies give meaning and
substance to the constitutional right of labor to security of tenure.14

However, the two remedies are distinct and separate. Though the
grant of reinstatement commonly carries with it an award of back
wages, the inappropriateness or non-availability of one does not
carry with it the inappropriateness or non-availability of the other.15
Reinstatement is a restoration to a state from which one has been
removed or separated. On the other hand, the payment of backwages
is a form of relief that restores the income that was lost by reason of
the unlawful dismissal.16 The award of one is not a condition
precedent to an award of another. Back wages may be ordered
without ordering reinstatement; conversely, reintatement may be
payment ordered without of back wages.17

Thus, in a number of case,18 the Court, despite its order of

reinstatement or award of separation pay in lieu of reinstatement
deemed it appropriate not to award back wages as penalty for the
misconduct or infractions committed by the employee.

In the case at bar, we hold that the factual circumstances obtaining

in the case at bar do not warrant exception to the general principle
that an employee is entitled to reinstatement and to receive back
wages where there is a finding of illegal dismissal.

There is here no deliberate intent on the part of DE GUZMAN to

prejudice the company. It can be safely said that at most, DE
GUZMAN committed merely an error of judgment in paying the sales
agent without verifying the authenticity of the receipts. Contrary to
the claim of REX, there was no standard operating policy that "no
disbursement of fund may be made by a cashier without the
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approval of his/her immediate supervisor." Rex's own witness,

Emmie Idio, the clerk who issued the receipts, stated in her affidavit
that "it has always been the procedure at REX Bookstore, Recto
Branch, that when an outside sales agent does not have a receipt of
his own, the Bookstore, through its sales clerk prepares two (2)
identical copies of an unofficial receipt evidencing the payment of
the books; one copy to be retained by the Bookstore and the other to
be issued to the agent upon payment by the cashier."19 Therefore, it
is clear that in the payment of outside sales agent prior approval of
immediate superior is not required.

More importantly, this was the first time that DE GUZMAN made an
overpayment. Such an infraction which was the only one she had
ever committed should not be heavily taken against her. Besides, as
correctly observed by respondent NLRC, she was not solely
responsible for the said incident. The fact of overpayment was
primarily attributable to the sales clerk who issued two unofficial
receipts to the sales agent in violation of standard company policy, as
well as the misrepresentation committed by the book agent that the
two receipts covered two separate transactions.

DE GUZMAN's good faith is further buttressed by the fact that the

two unofficial receipts which served as basis for payment were
retained in the company's file together with the receipts of payment
and were both marked as paid.20 In fact, on the basis of those
documents and the testimonies of the clerk and DE GUZMAN, the
REX can demand from the book agent, who is a regular client, the
return of the overpaid amount.

The previous offense that DE GUZMAN had committed on 3 July

1993 for willful refusal to perform one's assigned work or to comply
with instruction of supervisor, for which she had been administered
a sufficient disciplinary sanction of six days suspension, could no

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longer be utilized to aggravate the present offense.21 Her previous

offense was an entirely separate and distinct violation of company
rules. The correct rule is that previous infractions may be used as
justification for an employee's dismissal from work in connection
with a subsequent similar offense.22

In determining the penalty to be imposed on an erring employee,

due consideration must be given to the employee's length of service
and the number of violations he committed during his employ.23 In a
similar case, the Court ruled that dismissal is too harsh a penalty for
the inefficiency of an employee where the offense was the first to be
committed by an employee and she did not do it with malice, aside
from the fact that she was not solely responsible for the incidents.
The suspension of the employee would have sufficed.24

On the basis of the foregoing, the conclusion is inevitable that the

total withholding of full back wages is too harsh and severely
disproportionate to the offense committed by DE GUZMAN. In all
cases where punishment of any sort is imposed, the penalty shall be
commensurate with the nature and gravity of the offense charged,
taking into consideration the varying circumstances surrounding
each particular case. The offender shall, however, be given the
benefit of all doubts that may exist as to his responsibility for the
offense charged. This dictum is in consonance with the policy of the
State, as embodied in the Constitution, to resolve doubts in favor of
labor.25

The employer's prerogative to discipline its employee must be

exercised without abuse of discretion. Its implementation should be
tempered with compassion and understanding.26 While an employer
has the inherent right to discipline its employees, we have always
held that this right must always be exercised humanely, and the
penalty it must impose should be commensurate to the offense

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involved and to the degree of its infraction.27 The employer should

bear in mind that, in the exercise of such right, what is at stake is not
the employee's position but her livelihood as well.28 The law regards
the workers with compassion. Even where a worker has committed
an infraction, a penalty less punitive may suffice, whatever missteps
maybe committed by labor ought not to be visited with a
consequence so severe. This is not only the law's concern for the
workingman. There is, in addition, his or her family to consider.
Unemployment brings untold hardships and sorrows upon those
dependent on the wage-earner.29

Finally, it must not be forgotten that the Constitution affirms labor as

a primary social economic force.30

As to the back wages, settled is the rule that the amount thereof to be
awarded to an illegally dismissed employee must be computed from
the time the compensation was withheld up to the time of actual
reinstatement, without deduction of earnings derived elsewhere
pending the resolution of the case.31 But since in this case,
separation pay was awarded in lieu of reinstatement, the back wages
must be computed from the time of DE GUZMAN's illegal dismissal
until the finality of this decision.32

IN VIEW WHEREOF, the assailed decision and resolution of the

NLRC are hereby AFFIRMED with MODIFICATION. REX is ordered to
pay DE GUZMAN full back wages from the time of her dismissal until
the finality of this decision.

No pronouncement as to costs.

SO ORDERED.

Puno, Kapunan, Pardo and Ynares-Santiago, JJ., concur.

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Footnotes

1Rollo, 18-26. Per Javier, L.C., Press. Comm., with Bernardo, I.B.,
and Tanodra, J.A., Comms., concurring.

2 Id., 28.

3 Annex "A," of Complainant's Position Paper, Rollo, 44.

4 Annex "B," of Complainant's Position Paper, Id., 45.

5 Annex "C," of Petition, Rollo 46.

6 Original Record (OR), 2.

7 Id., 6.

8 Id., 7.

9 Rollo, 81-86.

10 Id., 18-26.

11 NLRC Decision, 6-7, Rollo, 23-24.

12 Rollo, 28.

13Flores, et al v. Funenaria Nuestro, et al., 160 SCRA 568, 572

[1988).

14 Santos v. NLRC, 154 SCRA 166, 171, 172 [1987].

15 Ibid., See also Medina v. CBS, 222 SCRA 707 [1993].

16 Escareal v. NLRC, 213 SCRA 472 [1992].

17 See Callanta v. Carnation, Phil., Inc., et al., 145 SCRA 268 [1986].

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18 In Pepsi Cola v. NLRC, et al., 247 SCRA 386 [1995], an employee

filed a leave of absence for one day after he suffered
stomachache. Upon the advice of the doctor he took a rest for 25
days without prior leave. When he reported for work, he was
told he had been dismissed for being absent without leave. It
was held that while he was at fault, the employee could not be
dismissed. He was ordered reinstated but he was denied back
wages.

Also in the case of Yupangco Cotton Mills, Inc. v. NLRC,

after finding that the employee was illegally dismissed but
finding him guilty of misconduct the Court finds no grave
abuse of discretion in the resolution of the NLRC meeting
the penalty of suspension only without backwages. (G.R.
94156, 30 July 1990, First Division, Minute
Resolution).1âwphi1.nêtnone

Similarly the dismissal of an employee of a mining firm who

was apprehended for stealing ores with high gold content
was considered drastic and unwarranted considering that
he had rendered twenty three years of service without
previous derogatory record and he was prematurely
suspended during the pendency of the case; reinstatement
without backwages would serve the ends of justice. (Itogon
Suyoc Mines, Inc. v. NLRC, 117 SCRA 532 [1982].

19 Par. 4 of the Affidavit; OR, 53.

20Annex "B," "B-1," "B-2," of respondent's Position Paper, OR,

40.

21 Appendix "B" of Memorandum on Appeal, Id., 84.

22 Filipro, Inc. v. Ople, et al., 182 SCRA 1, as cited in Stellar

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Industrial Services, Inc. v. NLRC, 252 SCRA 323, 333 [1996].

23Bonotan v. NLRC, et al., 237 SCRA 717 [ 1994]; Sampang v.

Inciong, 137 SCRA 56 [1985].

24 Tumbiga v. NLRC, et al, 274 SCRA 338 [1997].

25 Gelmart Industries Phils., Inc. v. NLRC, 176 SCRA 303 [1989].

26See Maglutac v. NLRC, et al., 189 SCRA 767 [1990] Santos v.

NLRC, et al., supra note 14.

27 Pioneer Texturing Corp., et al. v. NLRC, 280 SCRA 806, 816

[1997] citing Solmac Marketing, Inc., et al., v. NLRC, G.R No.
116574, Feb. 12, 1996.

28 Pioneer Texturing Corp. v. NLRC, supra.

29 Meracap v. International Ceramics Manufacturing Co., Inc., et

al., 92 SCRA 412 [1979]; see also Michael Inc., et al v. NLRC, et al.,
256 SCRA 461 [1996]; Almira v. B.F. Goodrich Phils. Inc., et al., 58
SCRA 120 [1974].

30 Sec. 18, Article II.

31PLDT v. NLRC, 276 SCRA 462 [1997]; Reformist of Union of R.B.

Liner, Inc. v. NLRC, 266 SCRA 713 [1997]; Bustamante v. NLRC,
255 SCRA, 145 [1996].

32Rasonable v. NLRC, et al, 253 SCRA 815 [1996]; Labor v. NLRC,

248 SCRA 205 [1995]; Gaco v. NLRC, 230 SCRA 260 [1994].

The Lawphil Project - Arellano Law Foundation

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