Court of Appeals: Republic of The Philippines Manila

Republic of the Philippines
Court of Appeals
Manila
EIGHTH (8th) DIVISION
NESTLE CABUYAO CA-G.R. SP No. 164673

WORKERS UNION
(NCWU-PTGWO),
Petitioner, Members:
GONZALES-SISON, M. B.,
Chairperson
-versus- PEREZ, P. A. and
LAUIGAN, R. R. R., JJ.
NESTLE PHILIPPINES, Promulgated:

INC.,
Respondent. January 29, 2021
x------------------------------------- -----x
DECISION
GONZALES-SISON, M., J.:
This is a Petition under Rule 43 of the Rules of Civil Procedure

assailing the Decision dated March 29, 2019 and Order dated February
17, 2020 of Voluntary Arbitrator Delia T. Uy of the National Conciliation
& Mediation Board (NCMB), Regional Branch No. IV, Calamba City,
Laguna in Voluntary Arbitration Case No. AC890-RCMB-IVA-LAG-02-
002-2018 (In Re: Voluntary Arbitration Case Between Nestle Cabuyao
Workers Union (NCWU-PTGWO) and Nestle Philippines, Inc.).1
Petitioner Nestle Cabuyao Workers Union-Philippine Trade and

General Workers Organization (NCWU-PTGWO) is the certified and
exclusive bargaining agent in Nestle Philippines, Inc. (Nestle) which is
a duly registered domestic corporation engaged in the business of
manufacturing nutritional food and milk products.
1 Rollo pp. 81-89 and 43-44, respectively.

Nestle Cabuyao Workers Union (NCWU-PTGWO) vs. Nestle Phils., Inc. Decision
CA GR SP No. 164673 Page 2 of 22
Record shows that among the benefits that Nestle extends to its
employees is the so-called “Home Suite Loan Program” (HSLP) to help
the employees acquire a residential property, make improvements on
their existing residential property, purchase another property, pay off
mortgage loans due for foreclosure, installation of water systems,
and/or make investments or acquire proprietary club shares, among
others. In connection therewith, an employee who would like to avail
of the loan must submit a clear and competent proof of the need for
such loan, payment of which would be through monthly salary
deduction. Several employees availed of such loan.
Sometime in July 2017, Nestle conducted an audit of the loans

granted to the employees in order to validate if the program had
served its purpose of helping and assisting employees in establishing
their own family home. Therefrom, it was discovered that certain
employees made misrepresentations in their respective loan
applications and used simulated Contract To Sell and/or Kasunduan ng
Bilihan Ng Lupa Na May Paunang Bayad to make it appear that they
were indeed purchasing a residential house/lot for their family home
but instead diverted the proceeds of the loan to another unauthorized
purpose. These employees are Rogelio R. Biglang-Awa, Jonjon M.
Yasay, Erickson G. Hernandez and Jose Jerome C. Dela Cruz, who are
all members of NCWU-PTGWO (hereinafter referred to as subject
employees). It was further discovered that subject employees
facilitated the documentation for loan applications of their co-
employees with the use of simulated contracts, particularly by Biglang
Awa, for a fee ranging from Php12,000.00 to Php15,000.00.
In view thereof, Notices To Explain were issued to subject

employees for them to air their sides. Meanwhile, they were
preventively suspended from work until further notice. 2
As borne out by the record, Erickson G. Hernandez obtained

the loan to purchase a lot located at Brgy. Inaon, Pulilan, Bulacan with
an area of 932 sq. m. covered by Transfer Certificate of Title (TCT) No.
T-236067 owned by Zenaida Cruz. He submitted a Kasunduan Ng
Bilihan Na May Paunang Bayad with Zenaida Cruz dated August 5,
2013. However, upon audit, it was discovered that another employee,
Ronilo Quiatchon, also obtained the loan to purchase the same lot and
submitted a Contract To Sell which Quiatchon entered into with
Zenaida Cruz on December 16, 2016. Hernandez explained in his
Sinumpaang Salaysay that he already backed out from his Kasunduan
with Zenaida Cruz such that he revoked the Deed of Assignment and
Undertaking he executed in favor of Nestle on September 22, 2017. 3
2 Rollo, pp. 648-659.

3 Rollo, pp. 294-295.
Rogelio R. Biglang Awa obtained a loan in April 2013 in order

to purchase a 6,145 sq.m. lot covered by TCT No. 260029 located in
Brgy. Bangcal, Malolos, Bulacan owned by Spouses Armando and
Marina San Diego. He submitted a Kasunduan ng Bilihan ng Lupa Na
May Paunang Bayad with Spouses San Diego on March 4, 2013.
However, upon audit, it was discovered that another employee, Rizaldy
Villanueva, also obtained the loan for the purchase of the same
property and submitted a Contract To Sell with Spouses San Diego on
August 4, 2016. In September 2016, he obtained another loan for the
purchase of another property of Spouses San Diego covered by TCT
No. 260035 where he submitted a Contract To Sell between him and
Spouses San Diego dated August 25, 2016. However, upon audit, the
same property was already sold to another employee, Joselito I.
Sanchez, by virtue of Kasunduan ng Bilihan Na May Paunang Bayad
dated October 14, 2014. The certified true copy of TCT Nos. 260029
and 260035 attached to the loan application of Villanueva and Sanchez
were found to be secured by him (Biglang Awa) from the Register of
Deeds. From the contracts/Kasunduan executed by Spouses San
Diego, it was observed also upon audit, that the respective signature
of Armando and Marina San Diego in said documents vary in strokes
and another document was simply thumbmarked by the Spouses.
Biglang Awa explained that he backed out from his Kasunduan with
Spouses San Diego and used the proceeds of his loan in 2013 for the
construction of his residential house. He fully paid said loan on
September 02, 2016. Regarding the signatures of the Spouses, he
claims they were genuine since they were affixed in the presence of
the notary public.4
Jonjon M. Yasay obtained the loan in order to purchase a 200

sq. m. lot located in Brgy. Lumbac, Pulilan, Bulacan covered by TCT
No. 039-2011001087 owned by Jonjon Suarez for which they
executed a Contract To Sell on October 7, 2015. However, upon audit,
it was observed that the signature of Jonjon Suarez appearing on said
Contract differed from the Contracts To Sell executed on the same
date by and between Suarez and Dexter Castillo for the purchase of a
lot covered by TCT No. 039-2011001085 and by and between Suarez
and Jimmy Boyles for the purchase of a lot covered by TCT No. 039-
2011001086. Yasay explained that he did not doubt the signature of
Suarez on their Contract because this was affixed in the presence of
the notary public and it was not falsified.5
Jose Jerome C. Dela Cruz, obtained the loan to purchase the

7,273 sq.m lot located in Dulong Malabon, Pulilan, Bulacan covered by
TCT No. 10124 under Emancipation Patent No. 609230 owned by
Biglang Awa. He submitted in support of the loan the Kasunduan ng
4 Rollo, pp. 398-406.

5 Rollo, pp. 246-247.
Bilihan Ng Lupa Na May Paunang Bayad he executed with Biglang

Awa on January 28, 2016. Upon audit, it was discovered that Biglang
Awa also executed on February 6, 2017 with another employee,
Eduardo Leonardo, a Kasunduan ng Bilihan Na May Paunang Bayad
covering the same lot which Leonardo used in obtaining the loan. He
explained that he and his wife changed their mind and backed out
from said Kasunduan with Biglang Awa.6
Common to the explanation of subject employees is that the

accusations were crafted by Atty. Lorenzo B. Ziga, Nestle's present
Human Resource Department Head, to impress upon Nestle's higher
ups that upon the alleged audit, irregularities were discovered in the
grant of the loans and to correct the mistakes of the department in
granting the loans. Atty. Ziga was abusing his authority in suspending
and dismissing employees of Nestle.
Upon receipt of the explanations of subject employees, Nestle

further required that Biglang Awa and Dela Cruz submit within 5 days
from notice their proof of payment to the concerned Vendor in
connection with the Contract to Sell dated August 26, 2016 and
January 28, 2016, respectively, which they submitted in support of
their loan application. Biglang Awa was, likewise, required to explain
on the reports of the following employees, who have been working
with Nestle for several years, that he was the instigator and facilitator
of the fictitious transactions to obtain the loan for a fee:
1. Elinio H. Paguio – that he could not apply for the loan

because he had no supporting documents such that he
sought the help of Biglang Awa who undertook to provide
the required documents for the loan in consideration of the
amount of Php15,000.00 which he paid to Biglang Awa
upon release of the proceeds of the loan.7
2. Jimmy C. Boyles- that he was then deep in loans and had

no more way to pay these loans such that upon prodding
of co-employees, he sought the help of Biglang Awa who
facilitated the documentation for the loan application for a
fee of Php12,000.00. Biglang Awa took him to the owner
of the lot with whom they talked to so that he and the
owner will execute a document to make it appear that he
was buying the property8
3. Dexter D. Castillo – that Biglang Awa offered to sell to him

his lot and provides the documentary requirements so that
6 Rollo, p. 670.
7 Rollo, p. 483.
8 Rollo, p. 484.
he can obtain the loan. However, he found irregularities in

the documents shown to him by Biglang Awa such that he
cancelled their agreement but nevertheless paid him
Php15,000.00 out of the proceeds of the loan as
damages.9
In response thereon, Biglang Awa claims that Atty. Ziga simply

utilized Paguio, Boyles and Castillo to come up with such falsehood
against him in order to destroy his reputation and source of livelihood.
He never asked money from them to facilitate the loan. They were
with him when they went to the Register of Deeds and notary public.
If ever they spent money, these were intended for notarial fees,
photocopying of documents, processing fees, food and transportation
expenses. As to Castillo, he was not privy on his talks with Jon Jon
Suarez, the owner of the lot he was supposed to purchase, especially
the cancellation of their agreement.10
After the completion and conclusion of the investigation

conducted by Nestle, subject employees were dismissed from the
service. Nestle justified their dismissal in the following manner:
1. Rogelio Biglang Awa
“You are fully aware of this transaction (referred

to in the Notice To Explain) since you personally
secured the certified true copy of the TCT on
behalf of Mr. Sanchez. In this instance, despite
full knowledge of the defects of the second sale to
you by the same Vendors, you submitted the so-
called Contract To Sell dated August 25, 2016 to
support your Home Suite Loan from the
Company. As part of the requirement for the said
loan, you executed a Deed of Assignment dated
September 9, 2016 and an Undertaking dated
September 9, 2016 both of which created a
mortgage on the said property in favor of the
Company. We take note of the Acknowledgment
Receipt you submitted as proof of payment dated
September 5, 2017. However, in the space for
signatures, only the purported thumbprints of the
vendors Armando and Marina T. San Diego
appear while in the Contract To Sell dated August
25, 2016, the signatures of the said parties are
9 Rollo, p. 485.
10 Rollo, pp. 685-686.
present. Moreover, this document seems to have

been obtained almost one year from the date of
the transaction and only when the present inquiry
was in due course. We also take note of the Joint
Sinumpaang Salaysay dated 31 August 2017,
where you unilaterally revoked the said Deed of
Assignment and Undertaking for the purpose of
evading the liability you knowingly and voluntarily
assumed when you applied for the loan. Since
these documents are required for all availers of
the Home Suite Loan Plus, this means that you
are depriving the company of the remaining
security for the loan that you obtained and proves
your bad faith all along. We take notice also of
the document entitled Cancellation/Revocation
dated September 18, 2017 where the vendors
above supposedly certified that the transaction
between them and Joselito Sanchez dated
October 14, 2014 was revoked on October 28,
2014. We further take note however, that instead
of the signatures of the said Vendors, only
thumbprints appear thereon contrary to the
signatures which appeared on the Kasunduan
dated October 14, 2014. Moreover, this document
was issued only on September 18, 2017, almost
three years after the purported
cancellation/revocation and only in the course of
this inquiry where Mr. Sanchez himself was one of
those required to explain their transactions. On
the second issue, you were made to explain an
apparently similar case of double sale, hence, on
April 4, 2013, you applied for and was granted a
Layer 1 Home suite Loan Plus loan for
Php300,000.00 in support thereof, you submitted
a document entitled Kasunduan ng Bilihan Ng
Lupa Na May Paunang Bayad dated March 4, 2013
between the Spouses Armando and Marina San
Diego as Vendors and yourself and Angelina
Biglang Awa as buyers for a property in Brgy.
Bangcal, Malolos, Bulacan with an area of 6,145
sq. m. covered by TCT No. T-260029. To secure
this loan, you executed a Deed of Assignment and
Undertaking both dated April 17, 2013, in favor of
the company. However, on August 4, 2016, the
same Vendors executed a Contract To Sell over
the same property covered by Transfer Certificate
of Title No. T-260029 in favor of another NPI
employee, Rizaldy Villanueva. This document was
submitted to support the latter's own application
for a Layer 1 and 2 Home Suite Loan for

Php280,000.00. You facilitated and allowed this
transaction even obtaining the certified true copy
of the TCT for Mr. Villanueva. In your
Sinumpaang Salaysay dated 19 September 2017,
you claim that you backed out from the said
transaction and used the funds instead for
construction of a residential house. This violates
the conditions for the Home Suite Loan Plus
application that the proceeds should be used only
for the approved purpose. Your unilateral decision
to use the proceeds of the loan for other than the
approved purpose also violated the Deed of
Assignment and Undertaking both dated April 17,
2013. We take note that this loan had been fully
paid as of February 9, 2016. However, the
misrepresentation remains and while plans drawn
up by the draftsmen for the two-storey residential
building were submitted together with receipts for
the purchase of various building materials, this
have no significance since in renovation or
construction of a house, the availer must first
submit the title as proof of ownership of the lot on
which said building or house is to be constructed.
You were also given the opportunity to explain
the reports from Elinio Paguio, Jimmy Boyles and
Dexter Castillo, among others, where you
appeared as the instigator and facilitator of
fictitious transactions to obtain loans from the
Company, for your personal gain after you were
paid various amounts (Php12,000 from Jimmy
Boyles, Php15,000 from Dexter Castillo). In these
cases, you provided documents which were
submitted in support of the loan applications for
which you were paid as you admitted. All of the
foregoing point to your active role in initiating,
encouraging and facilitating transactions that
skirted the rules governing the company's
housing loan program as well as carrying out
transaction that defrauded and exposed the
company to financial risks and losses through
your misrepresentations and dishonesty as well as
for falsifying required documents to support the
availment of company benefits in violation of the
Implementing Rules and Regulation of the Nestle
in the Philippines Code of Business Conduct.
These acts also qualify as serious misconduct,
fraud and analogous causes under article 297 of
the Labor Code. In view of the gravity of the
offense, you are hereby DISMISSED from the

Company effective immediately.” 11
2. JONJON M. YASAY
“in your letter dated September 5, 2017, you

presented a statement from one Yasminda Yasay
that you were continuing with the amortizations
on her house at Block 5 Lot 3 Celina Plains Subd.,
Phase 3, Brgy. Pooc, City of Sta. Rosa from
November 2015 to date. In addition, attached
therewith was a copy of TCT No. 060-2014020660
and receipts from the Home Development Mutual
Fund in the name of Jasminda Yasay. This
contradicts your earlier sworn statement. We take
note of the financial obligations that you and your
family may have incurred but the Home Suite
Loan rules provide that the proceeds of the loan
should be used exclusively for the purpose for
which it was approved. Moreover, the Layer 1
Home Suite Loan that you obtained came with a
Deed of Assignment and an Undertaking that
created a mortgage over the subject property
which provided a security for the company in
case, for any reason, you are unable to pay the
loan. As it now turns out, the property which was
covered by these documents were never yours at
any time to dispose or encumber, leaving the loan
unsecured. Your deliberate and unilateral decision
not to proceed with the declared purchase of the
subject property and use of the proceeds of the
loan for some other financial obligation not only
violated the rules of the loan but your undertaking
as well to the company and involves dishonesty
and absence of candor and trustworthiness on
your part. The breach is aggravated by your
unilateral decision, apparently in a bid to escape
from the weight of these obligation and therefore
in bad faith, to revoke the said Deed of
Assignment and Undertaking in your Sinumpaang
Salaysay dated August 31, 2017. On top of this,
you also submitted, as Annex A, of your letter
dated September 5, 2017, the purported
declaration of the purpose of the loan where you
indicated “for purchase, through assumption of
loan and mortgage, of property to be”. This
11 Rollo, pp. 673-675.

altered document contradicts the earlier purpose

you submitted in October 16, 2016, duly
notarized, that the loan was for “purchase of
house and lot”. All of the foregoing are in
violation of the Implementing Rules and
Regulations of Nestle in the Philippines Code of
Business Conduct. These acts also qualify as
serious misconduct, fraud and analogous causes
under Art. 297 of the Labor Code. In view of the
gravity of the offense, you are hereby DISMISSED
from the Company effective immediately.” 12
3. Erickson G. Hernandez
“In your Joint Sinumpaang Salaysay dated 22

September 2017, you claimed that you did not
proceed with the transaction which was the
subject of your Home Suite Loan from the
Company. In the same document, you declared
that you were revoking the above-mentioned Deed
of Assignment and Undertaking. Attached to the
same document are photocopies of what purported
to be receipts dating from 2012 for various
purchases. Not one of these receipts, however,
were machine validated nor contained the
signature of the issuer. All of these purchases
ante-dated the loan from the Company. Among
the documents also attached is a supposed
Acknowledgment Receipt from one Jerico S.
Pangilinan for the amount of Php360,000.00 he
received from you. We take note of the financial
obligations that you or your family may have
incurred but the Home Suite Loan rules provide
that the proceeds of the loan should be used
exclusively for the purpose for which it was
approved. Moreover, the Layer 1 Home Suite Loan
that you obtained came with a Deed of Assignment
and an Undertaking that created a mortgage over
the supposed property, which provided a security
for the company in case, for any reason, you are
unable to pay the loan. As it now turns out, the
property which was covered by these documents
were never yours at any time to dispose of or
encumber, leaving your loan unsecured. Your
deliberate and unilateral decision not to proceed
with the declared purchase of the subject property
12 Rollo, pp. 476-477.

and use of the proceeds of the loan for some other

financial obligation not only violated the rules of
the loan but your undertaking as well to the
company and involves dishonesty and absence of
candor and trustworthiness on your part. This
breach is aggravated by your unilateral decision,
apparently in a bid to escape from the weight of
these obligation and therefore in bad faith, to
revoke the said Deed of Assignment and
Undertaking in your Sinumpaang Salaysay. On top
of this, you also submitted the purported
declaration of the purpose of the loan where you
indicated “for construction or completion of a
residential unit on an owned lot”. While we note
that you attached a Joint Affidavit dated June 11,
2015, this document which abrogates what
appears to be an earlier partition project does not
establish your ownership of the subject property
where presumably you are building a house. All of
the foregoing are in violation of the Implementing
Rules and Regulations of Nestle in the Philippines
Code of Business Conduct. These acts also qualify
as serious misconduct, fraud and analogous causes
from the Company effective immediately.”13
4. JOSE JEROME C. DELA CRUZ
“In your letter dated August 16 and reiterated in

your Sinumpaang Salaysay dated August 17, 2017
you claimed that the transaction did not push
through due to a change of mind on your part. In
your letter of September 5, 2017, you submitted an
Acknowledgment Receipt for payment of a debt
incurred on July 15, 2015 and attached were
receipts issued by the National Home Mortgage
Finance Corporation for a remittance on July 20,
2015. We take note of the financial obligations that
you incurred but the Home Suite Loan rules
provide that the proceeds of the loan should be
used exclusively for the purpose for which it was
approved. Moreover, in the Layer 1 Home Suite
Loan that you obtained, you specifically indicated
that the loan was for the purchase of a house and
lot. As security for said loan, you executed a Deed
13 Rollo, pp. 478-479.

of Assignment and an Undertaking that created a

mortgage over the subject property in favor of the
Company. Your unilateral and deliberate decision
not to proceed with the declared purchase of the
subject property and use the proceeds of the loan
for some other financial obligation not only violated
the rules of the loan but your undertaking to the
company and involves dishonesty and absence of
candor and trustworthiness on your part. This
breach is aggravated by your unilateral decision,
apparently in a bid to escape from the weight of
these obligation and therefore in bad faith, to
revoke the said Deed of Assignment and
Undertaking in your Sinumpaang Salaysay dated
August 31, 2017. On top of this, you also
submitted as Annex “A” of your letter dated
Spetember 5, 2017, the purported declaration of
the purpose of the loan where you indicated “for
full/partial redemption of foreclosed mortgage and
owned property used.” This altered document
contradicts the earlier purpose you submitted in
February 4, 2016, duly notarized, that the loan was
“for purchase of house and lot”. All of the
foregoing are in violation of the Implementing Rules
and Regulations of Nestle in the Philippines Code of
Business Conduct. These acts also qualify as
serious misconduct, fraud and analogous causes
from the Company effective immediately.”14
On October 23, 2017, subject employees sought redress before

the Committee on Grievance and Investigation for their dismissal from
the service which they claim amounts to “gross violation of Art. 258
(248) of the Labor Code of the Philippines, discrimination and
retaliation against the union officers and union members as provided
in the Collective Bargaining Agreement of Nestle and NCWU-PTGWO.”
They claimed, through their Union President, that Atty. Ziga's act of
dismissing them from service is a pure retaliation towards them. 15
However, despite several attempts for settlement of the issues, the
same failed. Hence, the parties agreed to submit the unresolved
grievance issues for voluntary arbitration.
After conciliatory conferences and submission of the parties

respective Position Paper, Reply and Rejoinder, the Voluntary Arbitrator
14 Rollo, pp. 480-481.

15 Rollo, pp. 482-483.
rendered a Decision upholding the dismissal of subject employees. 16

In the same Decision, it was ruled that said Office has jurisdiction over
the dispute since the parties already submitted to it a Submission
Agreement conferring jurisdiction to said Office and that an issue
submitted to a grievance machinery which has not been settled has to
be submitted to voluntary arbitration in conformance to their CBA.
Petitioner's motion for reconsideration of the assailed Decision

was denied in an Order dated February 17, 2020.
Hence, the present Petition on the sole ground that the

Voluntary Arbitrator erred in finding the dismissal of the subject
employees legal and justified for the following reasons:
1. There is no fraud in obtaining the loan from the

company. The Kasunduan ng Bilihan Ng Lupa Na May
Paunang Bayad and/or Contract To Sell were duly-
notarized and supported by the TCTs of the property.
The applications for loan were approved and granted
by the Company since there were no irregularities
found in these documents.
2. The revocation of said Kasunduan or Contract To Sell
after the loans were obtained were done due to
misunderstanding between subject employees and
the vendors of the property. It was not premeditated.
This being so, the vendors are again free to sell the
same property to another prospective buyer, making
it impossible for subject employees to push through
with the sale for which the loan was obtained.
3. The fact that the same real property was declared by
two other employees in their loan application as the
property they would purchase does not show that
each Contract to Sell/Kasunduan is spurious, a
misrepresentation or falsification especially that they
were not executed and used at the same time. They
have already revoked their respective Contract To
Sell/Kasunduan when the same property were used
by other employees.
4. Since they could no longer purchase the property,
they instead used the proceeds of the loan to other
allowable purposes such as: redemption of foreclosed
property; purchase through an assumption of
mortgage loan; construction and completion of a
residential house;and/or renovation/extension/repair
of house and installation of water supply, among
others.
16 Rollo pp. 81-89 Decision dated March 29, 2019 penned by Voluntary Arbitrator Delia T. Uy
5. Dela Cruz used the proceeds of the loan to pay his

loan incurred in 2015 to Estrella Calleon; Yasay
assumed the Pag-ibig loan of his mother so that after
full payment, his mother would transfer her rights
over the property to him; Hernandez paid off his debt
incurred in 2012 from Jerico Pangilinan for the
renovation of his house and that they did not
conspire with Biglang Awa to defraud the company.
6. It was only Biglang Awa who transacted with Dexter
Castillo, Jimmy Boyles and Elinio Paguio.
7. There is no falsification with regard to the loan
obtained in April 2013 by Biglang Awa covering TCT
No. 260029 because the Contract To Sell was revoked
by the parties on May 13, 2013 such that the
property was made available for use by Rizaldy
Villanueva in support of his loan application in August
2016. Regarding TCT No. 260035, the Contract To
Sell executed by Joselito Sanchez with Spouses San
Diego in support of Sanchez' loan application was
already revoked by them on October 28, 2014 such
that when he entered into a Contract To Sell with
Spouses San Diego of the same property, it was
already available for sale to him which he used in
obtaining the loan. He partially paid the purchase
price of the property and the signature of Spouses
San Diego on the Contract were affixed in the
presence of the notary public.
8. On the allegation that Biglang Awa is the mastermind
of the scheme to defraud the company, these were
simply based on the unsubstantiated allegations of
Paguio, Boyles and Castillo. He merely helped these
three employees to look for a property to buy and
accompanied them in processing the documents such
as going to the notary public and photocopying the
necessary requirements.
9. If indeed Biglang Awa conspired with these
employees, they should also be dismissed from the
service but they were not which is a clear showing of
discrimination proscribed by law and an invalid
exercise of management prerogative.
Further, Petitioner asserts that since the dismissal of subject

employees was illegal, they should be reinstated to their former
positions without loss of seniority rights and entitled to payment of full
backwages, damages and attorney's fees.
In its Comment to the Petition, Nestle argues that the Voluntary

Arbitrator did not err in upholding the dismissal of the subject
employees. It claims that the record is replete with evidence that

subject employees took advantage of the Home Suite Loan to defraud
the company. Instead of being grateful to the company for its liberal
policy in extending housing loans for the benefit of its employees,
subject employees took advantage of said liberality by orchestrating a
scheme to obtain such loans through fraud, misrepresentation and
deceit for a fee. They misrepresented that they were indeed in need of
the company's financial assistance under the Home Suite Loan so that
they could have a house/lot of their own for their family. While it is
true that at the time the loan applications and supporting documents
were submitted, the Company had no reason to believe that the same
were being used fraudulently. The application forms were completely
accomplished; the Contracts to Sell and Kasunduan appeared to be
complete on its face and duly notarized and the copies of the TCTs
appeared to have been certified as faithful reproduction of the original
TCTs on file with the Registry of Deeds. Their loan was approved since
they declared under oath that they will use the same for the purchase
of a house/lot. But none of them was able to purchase the property
they claimed they intended to buy. It was only after an audit had been
conducted that the fraud was discovered. In the modus operandi, they
appeared to have connived with real property sellers who were willing
to execute fictitious contracts to support the loan applications. After
these were approved and the proceeds of the loan were released,
subject employees alleged that they cancelled the Contract To
Sell/Kasunduan they executed with the sellers for undisclosed reasons
and without the knowledge of the company. They apparently recycled
the TCTs among themselves to avail of the loan and use the same for
purposes other than what was specified in their respective loan
application. Nevertheless, they remain bound by their Oath of
Undertaking and Deed of Assignment. Without the property having
been purchased as indicated in the loan applications, the Deed of
Assignment could not serve its purpose as the property which was
supposed to be the security for the loan was not purchased by them.
THE PETITION IS DENIED FOR LACK OF MERIT.
The core issue in this Petition is whether subject employees were

illegally dismissed from the service.
Article 294 of the Labor Code of the Philippines, as amended and

renumbered, protects the employee's security of tenure by mandating
that in cases of regular employment, the employer shall not terminate
the services of an employee except for a just or authorized cause. A
lawful dismissal must meet both substantive and procedural
requirements, that is, observance of due process of notice and
hearing. The quantum of proof required is substantial evidence the
burden of which is on the employer.
In the present case, there is no dispute as to the compliance

with the required notice and hearing. But has Nestle substantiated the
dismissal with a just or authorized cause? We find that indeed it had.
Article 297 states that an employer may terminate an

employment for any of the following causes:
a) serious misconduct or willful disobedience by

the employee of the lawful orders of the
employer of representative in connection with
his work;
b) gross and habitual neglect by the employee
of his duties;
c) fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative;
d) commission of a crime or offense by the
employee against the person of his employer
or any immediate member of his family or his
duly authorized representative; and
e) other causes analogous to the foregoing.
Petitioner, as President of the Union to which subject employees

are members, asserts that there was no fraud in obtaining the loans.
The Kasunduan and Contracts To Sell were not falsified, duly executed
and notarized, carrying with it the presumption of regularity. If ever
they backed out of the Kasunduan or Contract, it was not planned or
premeditated but due to misunderstanding with the sellers of the
property. However, since they have already received the proceeds of
the loan, they utilized the same for other allowable purpose/s under
the HSLP such as redemption of a foreclosed property, assumption of
mortgage over the property, construction and/or renovation of their
house/s.
Nestle maintains their position that subject employees employed

fraud. But what constitutes fraud? It has been repeatedly held that
fraud, in its general sense, is deemed to comprise anything calculated
to deceive, including all acts, omissions, and concealment involving a
breach of legal or equitable duty, trust, or confidence justly reposed,
resulting in damage to another, or by which an undue and
unconscientious advantage is taken of another. It is said to include all
surprise, trick, cunning, dissembling and any unfair way by which
another is cheated. On the other hand, deceit is the false
representation of a matter of fact whether by words or conduct, by
false or misleading allegations, or by concealment of that which should
have been disclosed which deceives or is intended to deceive another
so that he shall act upon it to his legal injury.
The foregoing Art. 297 states that an employee may be

dismissed for a just cause under item (c) which prescribes two
separate and distinct grounds for termination of employment, namely:
(1) fraud; or (2) willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative.
On the basis of the evidence thus presented, no other inference

can be drawn from the fact that a fraudulent scheme had been
designed by subject employees to have their loan applications as well
as that of their co-employees approved i. e. an employee would use a
Kasunduan or Contract executed by the employee with a purported
seller, accompanied by a certified true copy of the TCT of the lot to be
purchased and after the loan was approved, the Kasunduan or
Contract would be cancelled and the proceeds of the loan will be
diverted to another use. Thereafter, another employee would execute
a Kasunduan or Contract with the same purported seller for the
purchase of the same lot, and then after receiving the proceeds of the
loan, the Kasunduan or Contract would be cancelled. As attested to by
Paguio, Boyles and Castillo, if an employee does not have the required
documents to support the application for the loan, Biglang Awa would
come to their succor, secure and work out the necessary documents to
obtain the loan and after release of the proceeds, an amount ranging
from Php12,000.00 to Php15,000.00 would be paid to Biglang Awa as
consideration thereof. Such scheme misled Nestle into believing that
they have a legitimate need for the company's financial assistance
under the HSLP. As the pleadings disclosed, none of the subject
employees purchased the property indicated in the loan application
and all of them cancelled the Contract/Kasunduan with the purported
sellers showing that they never had the intention of buying the
property but only to avail of the loan for other purposes or intention.
As found by Nestle in its investigation, Hernandez obtained the loan to
purchase the lot covered by TCT No. T-236067 and entered into a
Kasunduan with its owner, Zenaida Cruz. He then cancelled such
Kasunduan with Cruz and used the proceeds of the loan for another
purpose without the knowledge and consent of Nestle. Thereafter,
another employee, Quiatchon, used the same property and entered
into a Contract To Sell with Cruz and used the same to obtain the loan.
Yasay obtained the loan for the purchase of a lot owned by Jonjon
Suarez, cancelled his contract with Suarez and used the proceeds of
the loan for another purpose. Jonjon Suarez was the purported seller
of his properties sold to Yasay, Castillo and Boyles but the purported
signature of Suarez in the three contracts were not the same. Dela
Cruz entered into a Kasunduan with Biglang Awa for the purchase of
the latter's property covered by TCT No. TCT-10124 to obtain the loan.
However, said contract was also cancelled and Dela Cruz used the
proceeds of the loan for another purpose. TCT No. 10124 of Biglang
Awa was also used by another employee, Eduardo Leonardo, to obtain
the loan.
Since all their Contracts/Kasunduan were cancelled after the

proceeds of the loan were received by them, the Undertaking/Deed of
Assignment they executed with Nestle, which created the real estate
mortgage over said property in favor of Nestle was put to naught, to
the prejudice of Nestle. Thus, the loan granted to them became
unsecured. Further, they unilaterally revoked their Undertaking and
Deed of Assignment in favor of Nestle, without the knowledge and
consent of the latter.
Moreover, when subject employees were made to explain, they

just came up with a convenient excuse that they did not deceive the
company and it just so happened that their Contract/Kasunduan with
the purported sellers were cancelled and/or revoked. They did not
adduce evidence to prove their good faith in obtaining the loans
despite ample opportunity given them. Yasay, Hernandez and Dela
Cruz could not present any document to prove that their respective
Contract/Kasunduan with the purported sellers were indeed cancelled.
As to Biglang-Awa, although he presented a document that he
cancelled his agreement to buy the property of Spouses San Diego,
the latter's signature was nowhere to be found on the undated
document which was notarized 4 years after said cancellation and at
the onset of the administrative investigation in 2017.
Yasay claims he used the proceeds of the loan to pay off his
mother's housing loan with Pag-ibig but the Waiver of rights over the
property executed by his mother was only done in April 2018, a year
after the investigation and was only presented as evidence in their
Position Paper. The Pag-ibig loan documents were also doubtful as
there was no stamp of any receipt or approval by Pag-ibig Fund.
Dela Cruz has not presented any evidence that he borrowed

money from Caleon for the renovation of his house. While he
submitted an Acknowledgment Receipt purportedly issued by Caleon,
it was issued two years after the debt was satisfied and at the time
the investigation was going on. It is common human experience that
when one pays a debt, a receipt for such full payment would be
immediately demanded as proof thereof. Such Acknowledgment
Receipt has no indication whatsoever on the purpose of the loan being
paid off and any other relevant detail.
Hernandez explained as well that he cancelled his

Contract/Kasunduan with Zenaida Cruz and diverted the proceeds of
the loan to payment of his debt to Jerico Pangilinan incurred in 2012
for the renovation of his house. However, the Acknowledgment Receipt
he presented has no indication that it was indeed incurred in 2012 for
the renovation of his house wherein he showed receipts amounting
only to Php82,711.00 and photographs of construction works which
did not show that it was his house being renovated.
Anent Biglang Awa, noticeable is that the revocation of

Kasunduan he executed with Spouses Armando and Marina San Diego
were only executed on September 18, 2017 at the onset of the
investigation being conducted by Nestle. Also, Spouses San Diego
were able to affix their signatures on the Kasunduan for the purchase
of the lot covered by TCT No. 260029 on August 4, 2016 and on the
Contract for the purchase of lot covered by TCT No. 260035 and TCT
No. 257365, although prominent was the different strokes on their
respective signature. However, in another Kasunduan with him,
Spouses San Diego did not sign the document but rather
thumbmarked the same, as attested to by their daughter, Alma Torres
San Diego.17 He also entered into a Kasunduan with his co-
complainant Dela Cruz for the sale of his lot to him, then after the
loan proceeds were received by Dela Cruz, they cancelled the
Kasunduan and then he entered again into another Kasunduan with
another employee, Eduardo Leonardo, for the sale of the same
property but cancelled the same as well after the proceeds of the loan
was released. He also claimed that he used the proceeds of his second
loan for the construction of his house but no evidence sufficient to
prove that the construction works were being done on his own house.
He was not also able to rebut with sufficient evidence the statements
of Paguio, Boyles and Castillo that he was paid Php12,000.00 and
Php15,000.00 for securing the required documents to support their
loan applications. It must be noted that he was the one who secured
the certified true copies of the TCTs used by Paguio, Boyles, Yasay,
Hernandez and Dela Cruz in their loan application 18 which corroborates
the statements of Paguio, Boyles and Castillo that he facilitated the
documentation. This fact precluded him from alleging that he had no
participation in the scheme or irregular transaction. He also did not
deny that he received money from them but claims the money was for
the expenses incurred in the documentation.
They cannot now deny that the Contracts To Sell/Kasunduan

were simulated contracts as they did not intend to be bound by it at
all. Simulation of a Contract may be absolute or relative. The former
takes place when the parties do not intend to be bound at all; the
latter, when the parties conceal their true agreement. 19 Although
these were notarized documents and settled is the rule that a
notarized document carries with it the presumption of regularity, such
presumption is not absolute and may be rebutted by clear and
convincing evidence to the contrary such as in the present case when
the signature of the sellers were contested and the questionable
circumstances under which the documents were executed.20
17 Rollo, pp. 303, 388-389, 392, and 394.

18 Rollo, pp. 126, 132, 137.
19 Article 1345 New Civil Code; Heirs of Intac v. CA GR No. 173211, October 11, 2012.
20 Lazaro, et al v. Agustin et al G.R. No. 152364, April 15, 2010 citing San Juan v. Offril G.R. No.
154609, April 24, 2009.
With regard to the allegation of Petitioner that subject

employees were discriminated and/or singled out from the rest of the
employees similarly situated, the same is belied by subject employees
themselves. Notices To Explain were also issued to Dexter Castillo,
Fidel Leonardo, Eduardo Leonardo, Rizaldy Villanueva, Jimmy Boyles,
Elinio Paguio, Ronnie Quiatchon, Reymundo Elazigui, Anthony
Magbanua, Cesar Ibanez and Joselito Sanchez. In fact, Yasay,
submitted a Joint Sinumpaang Salaysay dated August 31, 2017 with
Elazigui and so did Biglang Awa in his Joint Sinumpaang Salaysay with
Rizaldy Villanueva, Eduardo and Fidel Leonardo. 21 The imposition of
penalties depends on how the offenses were committed, attempt to
conceal their scheme and evade the consequences of their lawful
dismissal from the service.
As ratiocinated by the Voluntary Arbitrator:
“Here, we noted from the records the bad intention of

the four (4) employees to avail of the loan benefit
from the company. The company was able to show
further that the four (4) employees were assisting
other employees to avail of this benefit for a fee. The
company has the right to dismiss them on ground of
just cause.
Article 297 states that an employer may

terminate an employment for any of the following
causes:
a) serious misconduct or willful disobedience by

the employee of the lawful orders of the
employer or representative in connection
with his work;
b) gross and habitual neglect by the employee
of his duties;
c) fraud or willful breach by the employee of
the trust reposed in him by his employer or
duly authorized representative;
d) commission of a crime or offense by the
employee against the person of his
employer or any immediate member of
his family or his duly authorized
representative; and
e) other causes analogous to the foregoing.
We find the existence of fraud committed by

the four employees when they applied for the loan
21 Rollo, pp. 246-247; 402; 407-409.

knowingly that they cannot comply with the

conditions set by the company. Although the
documents submitted by the employees showed
no irregularities as they were able to show
notarized documents of an alleged Contract To
Sell, however, these employees knew from the
start of the transactions that ownership cannot be
transferred to them. Rescinding of the agreement
between the alleged seller and the employees
involved were never communicated to
management until the entire activity was
discovered. Not only did they connive with one
another, they offered their services to other
employees to facilitate the processing of
documents needed in the application of HSLP for a
fee. Institutionalizing the wrongful doing should
not be tolerated and the penalty of dismissal is
appropriate for the four employees involved in this
case. By changing the intention from purchase of
property to repair violated one of the conditions in
the grant of loan. Worst, it was only when
management discovered the unlawful scheme did
they inform management about the alleged
changes which made the loan unsecured all the
while. By changing the purpose of the loan by the
four employees merely affirmed that there were
prior conditions set in securing of the loan. These
conditions were violated by the four employees
aggravated by their non disclosure to the
management making it illegal.
Once again, an employer cannot be compelled

to retain an employee who is guilty of acts inimical
to the interests of the employer. A company has
the right to dismiss its employees if only as a
measure of self-protection. This is all the more
true in the case herein as these employees
exposed the management from granting unsecured
loans and peddling their knowledge and services to
other employees for a fee. The employees involved
circumvented the process provided by the
management and even offered their services to
other would be applicants to the program which is
a bad precedent. If not for the diligence made by
the management, the illegal activity would have
continued and would really place the company at
risks. As part of risk management, the dismissal of
the employees involved is justified.”
To the mind of this Court, it is no longer necessary to prove their

detailed participation in the irregularity for what matters most is that
their acts are more than sufficient for Nestle to show its mistrust on
them and keep them in its employ. A series of irregularities when put
together may constitute serious misconduct, a just cause for dismissal
of an employee. There is no question that the State affords protection
to labor but it also gives equal protection to the employer to exercise
what is clearly a management prerogative so long as it prescribes
reasonable rules and regulations necessary or proper for the conduct
of its business and to provide certain disciplinary measures in order to
implement said rules and to assure that the same would be complied
with, untainted by abuse of discretion.
It must also be stressed that only substantial evidence is

required in order to support a finding that an employee is already unfit
to continue working with it, having breached its company policies,
rules and regulations deliberately, willfully, intentionally, knowingly,
and purposely, without justifiable excuse. There is no showing that
Nestle was moved by any ill will or motive in terminating the services
of subject employees especially that attributed to Atty. Ziga.
On this regard, only when the assessment of the Voluntary

Arbitrator is tainted with arbitrariness or oversight of a significant fact
or circusmtance that could affect the result will this Court depart from
the administrative agencies factual conclusions.
Considering that there is just cause for terminating the services

of subject employees, there is no basis to award them separation pay
and backwages as well as damages and attorney's fees.
In light of the foregoing, the Petition is DENIED for lack of

merit. The Decision dated March 29, 2019 and Resolution dated
February 17, 2020 of the Voluntary Arbitrator of the National
Conciliation and Mediation Board, Department of Labor & Employment
in AC-890-RCMB-IV-A-LAG-02-002-2018 are AFFIRMED.
SO ORDERED.
MARLENE B. GONZALES-SISON
Associate Justice
WE CONCUR:
PABLITO A. PEREZ
Associate Justice
RAYMOND REYNOLD REYES LAUIGAN

Associate Justice
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer of
the opinion of the Court.
MARLENE B. GONZALES-SISON
Associate Justice
Chairperson, Eighth (8th) Division

Court of Appeals: Republic of The Philippines Manila

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Court of Appeals: Republic of The Philippines Manila

Uploaded by

Copyright:

Available Formats

Republic of the Philippines

EIGHTH (8th) DIVISION

NESTLE CABUYAO CA-G.R. SP No. 164673

NESTLE PHILIPPINES, Promulgated:

GONZALES-SISON, M., J.:

This is a Petition under Rule 43 of the Rules of Civil Procedure

Petitioner Nestle Cabuyao Workers Union-Philippine Trade and

1 Rollo pp. 81-89 and 43-44, respectively.

Sometime in July 2017, Nestle conducted an audit of the loans

In view thereof, Notices To Explain were issued to subject

As borne out by the record, Erickson G. Hernandez obtained

2 Rollo, pp. 648-659.

Rogelio R. Biglang Awa obtained a loan in April 2013 in order

Jonjon M. Yasay obtained the loan in order to purchase a 200

Jose Jerome C. Dela Cruz, obtained the loan to purchase the

4 Rollo, pp. 398-406.

Bilihan Ng Lupa Na May Paunang Bayad he executed with Biglang

Common to the explanation of subject employees is that the

Upon receipt of the explanations of subject employees, Nestle

1. Elinio H. Paguio – that he could not apply for the loan

2. Jimmy C. Boyles- that he was then deep in loans and had

3. Dexter D. Castillo – that Biglang Awa offered to sell to him

he can obtain the loan. However, he found irregularities in

In response thereon, Biglang Awa claims that Atty. Ziga simply

After the completion and conclusion of the investigation

1. Rogelio Biglang Awa

“You are fully aware of this transaction (referred

present. Moreover, this document seems to have

for a Layer 1 and 2 Home Suite Loan for

offense, you are hereby DISMISSED from the

“in your letter dated September 5, 2017, you

11 Rollo, pp. 673-675.

altered document contradicts the earlier purpose

“In your Joint Sinumpaang Salaysay dated 22

12 Rollo, pp. 476-477.

and use of the proceeds of the loan for some other

4. JOSE JEROME C. DELA CRUZ

“In your letter dated August 16 and reiterated in

13 Rollo, pp. 478-479.

of Assignment and an Undertaking that created a

On October 23, 2017, subject employees sought redress before

After conciliatory conferences and submission of the parties

14 Rollo, pp. 480-481.

rendered a Decision upholding the dismissal of subject employees. 16

Petitioner's motion for reconsideration of the assailed Decision

Hence, the present Petition on the sole ground that the

1. There is no fraud in obtaining the loan from the

5. Dela Cruz used the proceeds of the loan to pay his

Further, Petitioner asserts that since the dismissal of subject

In its Comment to the Petition, Nestle argues that the Voluntary

employees. It claims that the record is replete with evidence that

THE PETITION IS DENIED FOR LACK OF MERIT.

The core issue in this Petition is whether subject employees were

Article 294 of the Labor Code of the Philippines, as amended and

In the present case, there is no dispute as to the compliance

Article 297 states that an employer may terminate an

a) serious misconduct or willful disobedience by

Petitioner, as President of the Union to which subject employees

Nestle maintains their position that subject employees employed

The foregoing Art. 297 states that an employee may be

On the basis of the evidence thus presented, no other inference

Since all their Contracts/Kasunduan were cancelled after the