The Supreme Court ruled that while labor tribunals can relax evidentiary rules, decisions must still be based on substantial evidence, not just hearsay. The case underscores the importance of presenting reliable evidence when employers seek to dismiss employees for misconduct, reinforcing the principle that labor laws prioritize the protection of workers’ rights against unsubstantiated accusations. This safeguards employees from wrongful terminations founded on flimsy or indirect evidence.

Did High-Grade Ores Lead to a Low-Quality Dismissal? Weighing Evidence in Labor Disputes

Lepanto Consolidated Mining Company dismissed Moreno Dumapis, Elmo Tundagui, and Francis Liagao (respondents) for allegedly participating in “highgrading,” or theft of gold-bearing ores. The company based its decision primarily on a Joint Affidavit from security investigators detailing accounts from various individuals, none of whom directly implicated the respondents. The Labor Arbiter initially dismissed the respondents’ illegal dismissal complaint. The National Labor Relations Commission (NLRC), however, reversed this decision, finding the dismissal illegal. The Court of Appeals (CA) affirmed the NLRC’s ruling.

The central issue before the Supreme Court was whether the CA erred in upholding the NLRC’s decision that declared the dismissal of the respondents illegal. The petitioner argued that the CA should not have strictly applied the hearsay rule, citing Article 221 of the Labor Code, which allows labor tribunals to decide cases without being bound by the technical rules of evidence. The petitioner further argued that in cases of dismissal for breach of trust, absolute proof is unnecessary, reasonable belief being sufficient. The court emphasized the critical distinction between admissibility and probative value. Evidence may be admitted, but its worth in proving a case depends on its reliability and the rules of evidence.

The Supreme Court acknowledged that administrative bodies like the NLRC are not strictly bound by technical rules of evidence. The Labor Code permits the NLRC and Labor Arbiters to ascertain facts quickly and objectively, without rigid adherence to legal technicalities, in the interest of due process. However, this relaxation of rules does not grant a license to disregard fundamental evidentiary principles. The evidence presented must still possess a minimum level of admissibility to have probative value. The standard remains that decisions must be based on substantial evidence – evidence that a reasonable mind would accept as adequate to support a conclusion.

Analyzing the Joint Affidavit, the Court found that the investigators’ statements lacked personal knowledge; they recounted what others told them. Dwayne Chambers, the Assistant Resident Manager, only saw “unidentified miners.” Security Guard Ceasarion Damoslog’s statements were inconsistent, initially denying involvement before later providing a statement, and failing to implicate the respondents. Shift boss Pablo Daguio admitted he did not recognize any of the miners involved. While Maximo Madao initially implicated respondent Liagao, he later retracted his statement, claiming he was pressured to give false information and the statement was notarized without his presence.

Given the contradictions and retractions, the Court concluded that the Joint Affidavit lacked sufficient probative value to justify the respondents’ dismissal. The Court acknowledged that employers have the right to dismiss employees for loss of trust, but this right must be exercised judiciously and with just cause. In this instance, the lack of substantial evidence undermined the petitioner’s claim of lost trust. Doubts between the employer’s evidence and the employee’s should always favor the employee. This principle stems from the State’s policy of protecting labor.

Finally, regarding respondents’ prayer for reinstatement, the court declared them estopped from claiming that right since there had been a CA decision that ordered payment of separation pay instead of reinstatement, and the respondents failed to appeal this with timeliness. The doctrine of conclusiveness of judgment meant that an earlier ruling that had already resolved an issue directly, was unable to be revisited between the same parties. The respondents can therefore not appeal their reinstatement to their former positions without proper channels.

FAQs

What was the key issue in this case?	The key issue was whether the dismissal of the employees was legal, considering the evidence presented by the employer was primarily based on hearsay and later-retracted statements. The court evaluated if the evidence met the threshold of ‘substantial evidence’ required for justifying a dismissal.
What is “highgrading”?	“Highgrading” refers to the theft of gold-bearing ores or rocks from a mining claim, which is a crime under Presidential Decree No. 581.
What does substantial evidence mean in labor cases?	Substantial evidence is relevant evidence that a reasonable mind might accept as adequate to support a conclusion. It’s more than just a mere scintilla of evidence; it must be credible and have probative value.
Can an employer dismiss an employee based on loss of trust?	Yes, an employer can dismiss an employee based on loss of trust and confidence, but it must be based on substantial evidence and not be arbitrary. There must be a justifiable reason to believe the employee is responsible for misconduct.
What is a hearsay evidence?	Hearsay evidence is testimony or evidence that relies on statements made outside of court, where the person who made the statement is not present to testify. While it may be admitted, it’s evidentiary weight may be limited.
Why did the Court give importance to Madao’s retraction?	Madao’s retraction of his initial statement implicating Liagao was significant because it cast doubt on the reliability of the evidence against Liagao. Retractions have an importance if there is little other evidence on the record.
What is the doctrine of conclusiveness of judgment (collateral estoppel)?	The doctrine of conclusiveness of judgment prevents parties from relitigating issues that have already been decided in a previous case. Once a final judgment on an issue is rendered, it binds the parties in subsequent cases involving a different cause of action.
In cases of doubt, who does the law favor?	In controversies between a laborer and their employer, if doubts reasonably arise from the evidence or the interpretation of agreements, such doubts should be resolved in favor of the laborer. This is to protect workers.

In summary, the Supreme Court’s decision emphasizes that while labor tribunals may relax technical rules of evidence to ensure a fair hearing, they cannot disregard fundamental principles of evidence. Dismissal based on unsubstantiated claims or weak evidence undermines workers’ rights and the spirit of labor protection laws. By requiring substantial evidence, the court safeguards employees against arbitrary or unjust terminations.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Lepanto Consolidated Mining Company v. Dumapis, G.R. No. 163210, August 13, 2008