Republic of the Philippines

Department of Labor and Employment

NATIONAL LABOR RELATION COMMISSION
Regional Arbitration Branch No. XI
Davao City

XXX,
Complainant,

-versus- NLRC RAB-____________

YYY,
Respondent/s,
x------------------------------------------------------------x

POSITION PAPER
(For the Respondent)
COMES NOW, the respondent ______________, assisted by the
undersigned counsel, unto this Honorable Office of the National Labor
Relations Commission most respectfully avers THAT:

I. STATEMENT OF FACTS
1. Respondent ___________________ is a duly registered cooperative
under CDA Registration No. ________ with business address at
Purok Sampaguita, Binuangan, Maco, Compostela Valley Province,
Philippines represented by ____________.
2. Complainant _____________ was hired by the respondent
____________ as Operations Manager (OM) on June 1, 2016. He
was formerly Board of Directors (BOD) for TWO (2) years, that is,
from year March 2014 to March 2016 and lost his bid for re-election in
the ensuing election BOD during the General Assembly of
cooperative members on March 2016.

3. The unassailable facts pertinent to the case are as follows: That

sometime on January to March 2019, the Audit and Inventory
Committee (AIC) of _____________ had conducted its regular series
of audits on all Branches of Gas Department and found out some
irregularities in their transactions. It particularly discovered that

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 multiple gas purchase order transactions (POs) from the three (3) gas
stations located in Maco, Compostela Valley, Tagum City, Davao del
Norte, and Panabo City, Davao del Norte all owned by respondent
______________ under the direct management and supervision by
the complainant _________________ have no approving Board
Resolution coming from the Board of Directors.

4. It has been a long and well-settled a policy/rule of ______________

that it does not allow or permit at all any Purchase Order (a “charge
sale” which means purchase of goods by late payment or instalment
payment) of fuel/gas at the stations. The complainant is fully aware of
this entrenched management policy not only as its operations
manager (OM) but being a former member of the Board of Directors
himself.

5. The same Audit observation, which was prepared by ___________,

CPA, Internal Auditor; Noted by: ___________, CPA, MBA,
Chairperson – AIC, _______, Vice Chairman – AIC, ___________,
Secretary – AIC, emphasized its recommendation that an approved
Board Resolution must be shown in order to prove that said
transactions are authorized by the Board of Directors. Along with its
Audit report is the summary of the unauthorized Purchase Orders
clandestinely transacted and approved by complainant __________.

6. The Audit report shows that the unauthorized several and

separate transactions discreetly started since August 2017 until
it was unearthed and stopped on January 2019, which
complainant ____________ transacted and approved with various
personalities and companies unknown to the Board of Directors, the
amounts involved reached to a staggering Nine Million Six Hundred
Eighty-Six Thousand And Eighty-Eight Cents (Php 9,686,680.88).
Adding salt to injury, it was discovered in the same Audit report that a
certain client/debtor _____________ who availed of the Purchase

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 Order was even allowed to claim a “Peso Per Liter Redemption” on
February 6, 2019 amounting to One Hundred Tweny-One Thousand
and One Hundred Thirty-Seven Pesos (Php 121,137.00) with the
approval of complainant even if he was aware of the fact that the
former should not be rewarded for said amount considering that his
purchase is not on cash basis but by Purchase Order. Attached
herewith is the audit report of the Audit And Inventory Committee, the
Summary of Receivables as Annexes “1, 1-A, 1-B, and 1-C, 1-D and
2” respectively.

7. Pursuant to its findings and observations, the Audit and Inventory

Committee (AIC) sent a formal notice to complainant _____________
pertaining on the matter and invited him for a conference on February
9, 2019. Likewise, a Memo No. 2019 - 003 was issued by the AIC
through its Internal Auditor, ___________ addressed to the
concerned persons namely: Jennie Ibasco, Maco gas station in-
charge; _______, Panabo gas station bookkeeper/in-charge;
__________, Tagum gas station bookkeeper/in-charge; and
__________, Maco gas station bookkeeper.

8. On the said conference, the AIC confronted the complainant on their

findings particularly the unauthorized Purchase Orders. To this,
complainant unequivocally admitted in the presence of the concerned
personnel to have transacted and approved all the unauthorized
Purchase Orders and offered flimsy reasons for his unilateral acts.
Hereto attached is the letter the addressed to complainant dated
February 4, 2019 from ______, Audit Chairperson marked as Annex
3, the Memo No. 2019 – 003 marked as Annex 4 and the excerpt of
the Minutes of the February 9, 2019 Conference marked as Annex 5.

9. Despite the said conference on February 9, 2019, the AIC through a

Memo No. 2019 – 004 still had given the complainant ample
opportunity and consideration to make a written explanation/reply to

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 the findings and observation of the AIC. However, complainant opted
not to offer any formal explanation. Hereto attached is the Memo No.
2019 – 004 marked as Annex 6.

10. Consequently, due to the anomalous transactions carried-out

by the complainant, respondent forthwith issued Board Resolution
No. 63, S. 2019 imposing a 15 working days preventive suspension,
that is from March 26, 2019 to April 13, 2019 upon the complainant in
order for the respondent to conduct thorough investigation free from
undue influence and interference by complainant by virtue of his
position as OM (being highest managerial position/key personnel in
the management structure) about the irregularities of business
transactions perpetrated by the complainant. Hereto attached is the
Board Resolution No. 63, S. 2019 dated March 22, 2019 marked as
Annex 7, also Memorandum dated March 25, 2019 issued by the
Human Resource Officer, ___________, notifying the complainant
that he is under preventive suspension pending investigation of the
charges against the complainant and the same was duly received by
the latter on the same date, marked as Annex 8.

11. Because of the gravity and the magnitude of the anomalous

transactions involving several and separate dealings with multiple
personalities/third parties covering a period of more than one (1)
year, the Board of Directors deemed it appropriate to conduct
further investigation in order to get to the bottom of it and ferret out
the truth. So that it issued Board Resolution No. 79, S. 2019 on
April 8, 2019, extending the preventive suspension of the
complainant for another 15 working days.

12. In compliance with the said resolution, the Human Resource Office
likewise issued Memo No. 019-076 notifying the complainant about
the extension of his preventive suspension. Attached herewith is a

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 copy of Board No. 79, S. 2019 and Memo No. 019-076, respectively
marked as Annex “9” and Annex “10”.

13. After painstaking investigation and inquiry, the Audit and

Inventory Committee (AIC) concluded that the complainant indeed
committed the anomalous transactions as established on their records.
(See attached Affidavit of __________, CPA earlier marked as Annex
“2”).
14. Finding that the report of the Audit and Inventory Committee
(AIC) is accurate and well-supported by evidence, the Board of
Directors after a thorough deliberation on the subject matter, issued
Board Resolution No. 80. S. 2019, “A Resolution Expressing Intention
To Terminate __________, Operation Manager Of _____________
Thereby Affording Him Due Process Of Law According To Labor
Standards” on April 8, 2019. Pursuant to the said Board Resolution, the
Human Resource Office issued Memo No. 019-077 giving notice to the
complainant expressing the intention of the respondent to terminate him
from his employment. The sole purpose of the said resolution and
memorandum is to give the complainant an opportunity to answer or
make comment the allegations imputed against him and to have a
possible conference on the matter. Instead, the complainant opted once
again not to answer despite receipt of the said notice. Attached herewith
is the photocopy of Board Resolution No. 80. S. 2019 and Memo No.
019-077 respectively marked as Annex “11” and Annex “12”;

15. Despite receipt of the afore-said notices giving him opportunity

to refute the findings and defend himself, or to even settle the matter
within the level of the management, the complainant adamantly refused
to rebut the charges against him. Attached herewith is the copy of the
Affidavit of __________, Human Resource Officer of the respondent
marked as Annex “13”.

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 16. Hence, on April 23, 2019, the Board of Directors was
constrained to terminate the complainant pursuant to Board Resolution
No. 83, S. 2019, “A Resolution Terminating ___________ As Operation
Manager from ___________ effective May 6, 2019”. Consequently, the
Human Resource Office issued Memo No. 019-084 furnishing Notice of
Termination to __________. Despite the existence of overwhelming
evidence and conclusive findings of the Audit and Inventory Committee
(AIC), the complainant still has the guts to file this instant case.
Attached herewith is the photocopy of Board Resolution No. 83, S. 2019
and Memo No. 019-084 respectively marked as Annex “14” and Annex
“15”.

17. Finally, while it may appear water under the bridge, since the
Board of Directors had already considered the overwhelming evidence
against complainant on unauthorized POs, however, it would be worth
to cite that in the succeeding Audit And Inventory Committee dated April
15-17, 2019, the AIC found that complainant _________ unilaterally and
without approval or confirmation of the BOD promoted some employees
with salary adjustments having no performance appraisal report
attached in their 201 File. Notably, these personnel by virtue of their job
description play vital roles in checking the regularity and propriety of
every business transaction of _________ spearheaded by the
complainant. He promoted these select employees with salary
increases without cloth of authority from the BOD for reasons only
known to complainant. Hereto attached is the Audit and Inventory
Report dated April 15-17, 2019, prepared and audited by __________,
CPA, Internal Auditor, noted by __________, Human Resource Officer
marked as Annex “16”.
II. ISSUES
a. Whether or not the acts committed by the complainant constitute just
cause to warrant removal/termination from work by respondent.
b. Whether or not the complainant was validly dismissed by the
respondent.

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 c. Whether or not termination and not suspension is the proper
imposable penalty.
d. Whether or not complainant is entitled to reinstatement.

III. DISCUSSION
a. Whether or not the acts committed by the complainant
constitute just cause for his removal/termination from
work

The law in protecting the rights of the labourer authorizes neither

oppression nor self-destruction of the employer. While the Constitution is
committed to the policy of social justice and the protection of the working
class, it should not be supposed that every labor dispute will be
automatically decided in favor of labor. Management also has its own
rights, which as such are entitled to respect and enforcement in the interest
of simple fair play. Out of its concern for those with less privilege in life, the
Supreme Court has inclined more often than not toward the worker and
upheld his cause in his conflicts with the employer. Such favouritism,
however, has not blinded the Court to rule that justice is in every case for
the deserving, to be dispensed in the light of the established facts and
applicable law and doctrine. The right of the company to dismiss its
employees is a measure of self-preservation (Azucena, Cesario Jr. The
Labor Code with Comments and Cases. 8 th Edition (2013) pp. 783-784.
Citing Mercury Drug Corporation v. NLRC, GR No. 75662, September 15,
1989).

In the instant case, it has been established by substantial evidence that

complainant committed acts that caused great damage to the respondent.
As can be gleaned from the records, complainant committed not once but
numerous separate unauthorized gas Purchase Orders (purchase of
gas/fuel for late payment on instalment) went unnoticed covering the period
of more than one (1) year or from August 2017 until it was discovered and
stopped on January 2019. For reasons only known to complainant, he went
on with his schemes in cohorts with third parties leaving the Board of

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Directors and poor members of the cooperative in the dark unmindful of his
devastating and injurious activities. Not surprisingly, the account
receivables of _______ to its great damage already ballooned to Nine
Million Six Hundred Eighty-Six Thousand and Eighty-Eight Cents (Php
9,686,680.88). The unauthorized and anomalous transaction does not only
occur once but committed by complainant several times and with different
actors involved nonchalant and without qualms of the tremendous amount
of money sustained by the innocent members of ____________. The
evidence is so overwhelming as strongly supported by documentary
evidence and sworn statements by employees-witnesses.

As matters now stand, the ___________ is left in a quandary how to collect

the huge amount of money (Php 9,686,680.88) from these third parties
who, not only are unfamiliar to the appalled Board of Directors, but also, did
not pass a screening of credit investigation as to their capacity and
reputation to pay debts supposedly to be conducted by concerned
employees of ____________.

Serious misconduct is one of the just causes for the removal of an

employee under the Labor Code of the Philippines. Misconduct is improper
or wrong conduct. It is the transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, wilful in character and
implies wrongful intent and not mere error in judgment (Azucena, Cesario
Jr. The Labor Code with Comments and Cases. 8th Edition (2013) pp. 785).

In the case under consideration, it is crystal clear that the acts committed
by complainant, undoubtedly, fall under the term serious misconduct which
is a valid ground for his termination. As Operation Manager, and former
member of the BOD, he is fully knows the rules of the MADECO more
particularly the elementary ones pertaining to the scope of his functions as
OM and the authority and jurisdiction of the BOD. As a cooperative, any act
or transaction that will be performed should be in accordance with its
manual of policies/rules, or that the same must be sanctioned by the Board
of Directors. The fact that complainant unilaterally and clandestinely

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entered numerous gas/fuel Purchase Order transactions, and promoted
select employees with salary adjustments to the injury of ________ without
authorization from the Board of Directors and in violation of
_____________ is a clear case of serious misconduct of an operation
manager.

As a matter of fact, his several acts committed are considered separate

offenses under _________’s Human Resources Policies and Procedures
Manual Sec. 8.1 Code of Discipline, which provides:

a. HONESTY (i) Misrepresenting himself/herself to possess power and

authority in dealing with the third parties;

In relation with,

b. (o) submission of false reports or providing false information or

false certification;

In as much as complainant during meetings of the BOD every time

he was invited as operations manager, never disclosed his
unauthorized POs even if the chairman of the BOD, Mr. __________,
reminded the concerned employees on behalf of the BOD that
purchase of gas/fuel by POs is strictly prohibited as a matter of
rule/policy of ________. Then again the acts committed by the
complainant are undoubtedly in connection with his work, being an
Operation Manager which constitute just cause for his separation.

Moreover, the acts committed by the complainant constitute “fraud or wilful

breach by the employee of the trust reposed in him by his employer
or duly authorized representative”, which is a just cause for dismissal
under Article 282 (c) of the Labor Code of the Philippines.

As firmly entrenched in our jurisprudence, loss of trust and confidence, as a

just cause for termination of employment, is premised on the fact that an
employee concerned holds a position where greater trust is placed by
management and from whom greater fidelity to duty is correspondingly
expected. This includes managerial personnel entrusted with confidence on
delicate matters, such as the custody, handling, or care and protection of

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the employer's property. The betrayal of this trust is the essence of the
offense for which an employee is penalized.

To fall under this ground, the first requisite is that the employee concerned

must be one holding a position of trust and confidence, thus, one who is
either: (1) a managerial employee; or (2) a fiduciary rank-and-file
employee, who, in the normal exercise of his or her functions, regularly
handles significant amounts of money or property of the employer.  The
second requisite is that the loss of confidence must be based on a willful
breach of trust and founded on clearly established facts (Wesleyan
University Philippines v. Reyes G.R. No. 208321, July 30, 2014).

In the case under consideration, there is no question that the position

(Operation Manager) of the complainant is imbued with trust and
confidence. When the complainant deliberately concealed the fact of the
unauthorized transactions for a long period of time, as conclusively
discovered by the Audit and Inventory Committee (AIC), it is tantamount to
a willful breach by the employee of the trust reposed on him. Clearly then,
such actuations constitute loss of a trust and confidence as a ground for
termination.

b. Whether or not the complainant was validly dismissed by

the respondent

The High Court made a pronouncement, in the case of Puncia v. Toyota

Shaw/Pasig Inc. GR No. 214399, June 28, 2016, that "for a dismissal to be
valid, the rule is that the employer must comply with both substantive and
procedural due process requirements. Substantive due process requires
that the dismissal must be pursuant to either a just or an authorized cause
under Articles 297, 298 or 299 (formerly Articles 282, 283, and 284) of the
Labor Code. Procedural due process, on the other hand, mandates that the
employer must observe the twin requirements of notice and hearing before
a dismissal can be effected.

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As comprehensively discussed in the first issue, there are just causes for
the removal of the complainant from his employment; hence, there is
proper compliance with the substantive due process requirement of the
Labor Code.

Anent the procedural due process, Section 2 (I), Rule XXIII, Book V of the
Omnibus Rules Implementing the Labor Code provides for the required
standard of procedural due process accorded to employees who stand to
be terminated from work, to wit:
Section 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:
I. For termination of employment based on just causes as defined in Article
282 [now Article 297] of the Labor Code:
(a) A written notice served on the employee specifying the ground or
grounds for termination, and giving to 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 the employee so desires, is given opportunity to
respond to the charge, present his evidence, or rebut the evidence
presented against him; and
(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.
In the case under consideration, the above-said requirements were duly
observed with by the respondent. First, respondent issued Board
Resolution No. 80. S. 2019, “A resolution expressing intention to terminate
__________, Operation Manager of ___________ thereby affording him
due process of law according to Labor Standards” on April 8, 2019.
Thereafter, the Human Resource Office issued Memo No. 019-077 giving
notice to the complainant expressing the intention of the respondent to
terminate him from his employment. This first notice pertains to the notice
of charge. The purpose of this FIRST notice is to give the complainant an

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opportunity to answer the allegations against him and an opportunity to
defend himself after he was furnished with a copy of the result of the
investigation. Unfortunately, the complainant did not bother to respond the
said notice despite receipt thereof. Despite this opportunity given by the
respondent, complainant opted not to answer the allegations against him.
Second, respondent issued Board Resolution No. 83, S. 2019, “A
resolution terminating __________ as Operation Manager from
_____________effective May 6, 2019”. Consequently, the Human
Resource Office issued Memo No. 019-084 furnishing Notice of
Termination to ____________. The purpose of the second notice is to
apprise the complainant that he is already terminated from his employment
due to just causes as already explained above.

Since the respondent complied with the statutory requirements of due

process, both substantive and procedural, in terminating the herein
complainant, the dismissal made by ________against __________ is
proper and within the bounds of the law.

c. Whether or not termination and not suspension is the

proper penalty that can be imposed against the
complainant

To note, the complainant was under preventive suspension for 15 days and
for compelling reasons the same preventive suspension was extended for
another 15 days or a total days of 30 days well within the requirements of
the Labor Code. Respondent respectfully submits that the proper penalty
for the violations committed by the complainant is termination and not
merely suspension. Complainant cannot simply claim that this is his first
offense, hence, suspension is proper. The investigations conducted
involved several and separate unauthorized and anomalous transactions
committed by complainant violative of and considered serious offenses
under ___________’s Human Resources Policies and Procedures Manual
Hence, considering the gravity and the frequency of his offenses, the
proper penalty should be termination and not suspension.

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 d. Whether or not complainant is entitled to reinstatement

The claim of reinstatement of the complainant should not be granted. It is a

well-established rule that reinstatement is proper where there is a finding of
illegal dismissal. To note, as discussed hereinabove, there is just cause for
complainant’s termination. Respondent likewise complied with the statutory
requirement of due process. Hence, the claim of reinstatement by the
herein complainant should be denied for lack of basis.

PRAYER

WHEREFORE, premises considered, it is respectfully prayed that this

Honorable Commission will dismiss this case for apparent lack of merit.

Other reliefs under the premises are likewise prayed for.

Respectfully submitted this ______________ in Tagum City (for Davao

City), Davao del Norte, Philippines.

_______________
Represented by:

_______________________
Respondent

Assisted by:

_________________
Counsel for the Respondent

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