KING OF KINGS TRANSPORT INC.

, CLAIRE DELA FUENTE and MELISSA

LIM, petitioners,
vs.
SANTIAGO O. MAMAC, respondent.
G.R. No. 166208, June 29, 2007

FACTS:
Petitioner KKTI is a corporation engaged in public
transportation and managed by Claire Dela Fuente and Melissa Lim.
Respondent was a conductor for Don Mariano Transit Corporation
(DMTC). He was one of the few people who established Damayan ng
mga Manggagawa, Tsuper at Conductor-Transport Workers Union.
Pending the union’s certification election, respondent was
transferred to KKTI. The KKTI employees later organized the
Kaisahan ng mga Kawani sa King of Kings (KKKK) which was registered
with DOLE. Respondent was elected KKKK president.
Upon audit of the October 28, 2001 Conductor’s Report of
respondent, KKTI noted an irregularity. It discovered that
respondent declared several sold tickets as returned tickets
causing KKTI to lose an income of eight hundred and ninety pesos.
While no irregularity report was prepared on the October 28, 2001
incident, KKTI nevertheless asked respondent to explain the
discrepancy. In his letter, respondent said that the erroneous
declaration in his October 28, 2001 Trip Report was unintentional.
He explained that during that day’s trip, the windshield of the
bus assigned to them was smashed; and they had to cut short the
trip in order to immediately report the matter to the police. As
a result of the incident, he got confused in making the trip
report.
On November 26, 2001, respondent received a letter terminating
his employment effective November 29, 2001. The dismissal letter
alleged that the October 28, 2001 irregularity was an act of
fraud against the company. KKTI also cited as basis for
respondent’s dismissal the other offenses he allegedly committed
since 1999.
After that, he filed an action for illegal dismissal, among
other claims. He denied committing any infraction and alleged
that his dismissal was intended to bust union activities.
Moreover, he claimed that his dismissal was effected without due
process.
KKTI averred that it had observed due process in dismissing
respondent and maintained that respondent was not entitled to
his money claims such as service incentive leave and 13th-month
pay because he was paid on commission or percentage basis.
LABOR ARBITER: he was validly dismissed
NLRC: Affirmed. CA held that there was just cause for
respondent’s dismissal. It ruled that respondent’s act in
“declaring sold tickets as returned tickets x x x constituted
fraud or acts of dishonesty justifying his dismissal.”
ISSUE: WON respondent was given due process (procedural)
HELD: NO. There was failure to observe the requirements of due
process
Due process under the Labor Code involves two aspects: first,
substantive––the valid and authorized causes of termination of
employment under the Labor Code; and second, procedural––the
manner of dismissal.
Section 2(d) of Rule I of Book VI of the Omnibus Rules
Implementing the Labor Code provides:
SEC. 2. Standards of due process; requirements of notice.––In
all cases of termination of employment, the following standards
of due process shall be substantially observed:
For termination of employment based on just causes as defined in
Article 282 of the Code:
(a) A written notice served on the employee specifying the
ground or grounds for termination, and giving said employee
reasonable opportunity within which to explain his side.
(b) A hearing or conference during which the employee concerned,
with the assistance of counsel if he so desires is given
opportunity to respond to the charge, present his evidence, or
rebut the evidence presented against him.
(c) A written notice of termination served on the employee,
indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination.

The first written notice to be served on the employees should

contain the specific causes or grounds for termination against
them, and a directive that the employees are given the
opportunity to submit their written explanation within a
reasonable period. “Reasonable opportunity” under the Omnibus
Rules means every kind of assistance that management must accord
to the employees to enable them to prepare adequately for their
defense.15 This should be construed as a period of at least five
(5) calendar days from receipt of the notice to give the
employees an opportunity to study the accusation against them,
consult a union official or lawyer, gather data and evidence,
and decide on the defenses they will raise against the
complaint. Moreover, in order to enable the employees to
intelligently prepare their explanation and defenses, the notice
should contain a detailed narration of the facts and
circumstances that will serve as basis for the charge against
the employees. A general description of the charge will not
suffice. Lastly, the notice should specifically mention which
company rules, if any, are violated and/or which among the
grounds under Art. 282 is being charged against the employees.
After serving the first notice, the employers should schedule
and conduct a hearing or conference wherein the employees will
be given the opportunity to: (1) explain and clarify their
defenses to the charge against them; (2) present evidence in
support of their defenses; and (3) rebut the evidence presented
against them by the management. During the hearing or
conference, the employees are given the chance to defend
themselves personally, with the assistance of a representative
or counsel of their choice. Moreover, this conference or hearing
could be used by the parties as an opportunity to come to an
amicable settlement.
After determining that termination of employment is justified,
the employers shall serve the employees a written notice of
termination indicating that: (1) all circumstances involving the
charge against the employees have been considered; and (2)
grounds have been established to justify the severance of their
employment.
Respondent was not issued a written notice charging him of
committing an infraction. A verbal appraisal of the charges
against an employee does not comply with the first notice
requirement.
The court observed from the irregularity reports against
respondent for his other offenses that such contained merely a
general description of the charges against him. The reports did
not even state a company rule or policy that the employee had
allegedly violated.
No hearing was conducted. Regardless of respondent’s written
explanation, a hearing was still necessary in order for him to
clarify and present evidence in support of his defense.
Moreover, respondent made the letter merely to explain the
circumstances relating to the irregularity in his October 28,
2001 Conductor’s Trip Report. He was unaware that a dismissal
proceeding was already being effected. Thus, he was surprised to
receive the November 26, 2001 termination letter indicating as
grounds, not only his October 28, 2001 infraction, but also his
previous infractions.