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Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 174809 June 27, 2012

DUTY FREE PHILIPPINES SERVICES, INC., Petitioner,vs.MANOLITO Q. TRIA, Respondent.

D E C I S I O N

PERALTA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court are the Courtof Appeals (CA) Decision1 dated May 31, 2006 and Resolution2 dated September 21, 2006 in CA-

G.R. SP No. 70839. The assailed decision affirmed the National Labor Relations Commission(NLRC) Resolution3 dated March 15, 2002 in NLRC NCR Case No. 00-12-009965-98, while theassailed resolution denied petitioner Duty Free Philippines Services, Inc.s (DFPSIs) motion forreconsideration.

The facts, as found by the CA, are as follows:

Petitioner Duty Free Philippines Services, Inc. is a manpower agency that provides personnel toDuty Free Philippines (DFP).

On March 16, 1989, [respondent] Manolo Tria was employed by Petitioner and was seconded toDFP as a Warehouse Supervisor.

In an Audit Report, dated January 16, 1998, it was revealed that 1,020 packs of Marlboro bearingMerchandise Code No. 020101 under WRR No. 36-04032 were not included in the condemnationproceedings held on December 27, 1996 and that there were "glaring discrepancies" in therelated documents which "indicate a malicious attempt to conceal an anomalous irregularity." Therelevant Request for Condemnation was found to have been fabricated and all signatoriestherein, namely, Ed Garcia, Stockkeeper; Catherino A. Bero, DIU Supervisor; and Constantino L.Cruz, were held "accountable for the irregular loss of the unaccounted Marlboro KS Pack of 5"

After further investigation, it was discovered that the subject merchandise was illegally broughtout of the warehouse and it was made to appear that in all the documents prepared said goodswere legally condemned on December 27, 1996. Ed Garcia, one of the respondents in the AuditReview, implicated [respondent] and [two] others. Garcia claimed that he was unaware of theillegality of the transaction as he was only obeying the orders of his superiors who included

[respondent]. Garcia disclosed that it was [respondent] who ordered him to look for a van for thesupposed "direct condemnation" of the subject merchandise.

Consequently, the Discipline Committee requested [respondent] to submit a writtenreply/explanation regarding the findings in the Audit Report and the allegations of Garcia.

[Respondent] denied his participation in the illegal transaction. Although he admitted that heinstructed Garcia to look for a van, it was for the purpose of transferring the damagedmerchandise from the main warehouse to the proper warehouse for damaged goods.

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On August 27, 1998, the DFP Discipline Committee [DFPDC] issued a Joint Resolution holding[respondent] "GUILTY OF DISHONESTY for (his) direct participation in the fake condemnation"and pilferage of the missing 1,020 Marlboro Pack of 5s cigarettes and orders (his) DISMISSALfrom the service for cause and for loss of trust and confidence, with forfeiture of all rights andprivileges due them from the company, except earned salaries and leave credits."

On September 18, 1998, Petitioner sent [respondent] a memorandum terminating hisemployment with Petitioner and his secondment to DFP "on the basis of the findings andrecommendation of the (DFPs) Discipline Committee."

Aggrieved, [respondent] filed a Complaint against Petitioner for Illegal Dismissal and for paymentof backwages, attorneys fees and damages.4

On May 31, 1999, the Labor Arbiter (LA) rendered a Decision5finding respondent to have beenillegally dismissed from employment. The dispositive portion of the decision reads:

WHEREFORE, all the foregoing premises being considered, judgment is hereby renderedordering the respondent company to reinstate complainant to his former position with all therights, privileges, and benefits appertaining thereto, including seniority, plus full backwages which

as of May 31, 1999 already amount to P172,672.50. Further, the respondent is ordered to paycomplainant the equivalent of ten percent (10%) of the total backwages as and for attorneysfees.

The claim for damages is denied for lack of merit.

SO ORDERED.6

On appeal, the NLRC affirmed7the LA decision, but deleted the award of attorneys fees.Petitioners motion for reconsideration was also denied8on March 15, 2002.

When petitioner elevated the case to the CA, it denied for the first time the existence of employer-

employee relationship and pointed to DFP as respondents real employer. The appellate court,however, considered said defense barred by estoppel for its failure to raise the defense beforethe LA and the NLRC.9 It nonetheless ruled that although DFPDC conducted the investigation,petitioners dismissal letter effected respondents termination from employment.10On the validityof respondents dismissal from employment, the CA respected the LA and NLRC findings andreached the same conclusion that respondent was indeed illegally dismissed fromemployment.11 Petitioners motion for reconsideration was likewise denied in a Resolution12datedSeptember 21, 2006.

Undaunted, petitioner elevates the case before the Court in this petition for review on certioraribased on the following grounds:

THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT PETITIONER DFPSI IS

LIABLE FOR ILLEGAL DISMISSAL AND DECLARE THAT:

A. DFPSI IS THE DIRECT EMPLOYER OF RESPONDENT INSTEAD OF DUTYFREE PHILIPPINES ("DFP"); AND

B. THE ISSUE AS TO WHO TERMINATED RESPONDENT WAS RAISED ONLYFOR THE FIRST TIME ON APPEAL.

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THE COURT OF APPEALS GRAVELY ERRED AND RULED CONTRARY TO LAW ANDJURISPRUDENCE WHEN IT FAILED TO RULE ON THE LIABILITY OF DFP, AS ANINDISPENSABLE PARTY TO THE COMPLAINT FOR ILLEGAL DISMISSAL.

THE COURT OF APPEALS GRAVELY ERRED AND RULED CONTRARY TO LAW ANDJURISPRUDENCE WHEN IT HELD THAT RESPONDENTS EMPLOYMENT WAS

ILLEGALLY TERMINATED.13

Petitioner insists that the CA erred in not considering its argument that it is not the employer ofrespondent. It likewise faults the CA in not ruling on the liability of DFP as an indispensable party.

We cannot sustain petitioners contention. In its Position Paper,14petitioner highlightedrespondents complicity and involvement in the alleged "fake condemnation" of damagedcigarettes as found by the DFPDC. This, according to petitioner, was a just cause for terminatingan employee.

In its Motion for Reconsideration and/or Appeal,15 petitioner insisted that there was basis for thetermination of respondents employment. Even in its Supplemental Appeal16 with the NLRC,petitioner reiterated its stand that respondent was terminated for a just and valid cause and dueprocess was strictly observed in his dismissal. It further questioned the reinstatement aspect ofthe LA decision allegedly because of strained relations between them.

With the aforesaid pleadings submitted by petitioner, together with the corresponding pleadingsfiled by respondent, the LA and the NLRC declared the dismissal of respondent illegal. Thesedecisions were premised on the finding that there was an employer-employeerelationship. 17Nowhere in said pleadings did petitioner deny the existence of said relationship.Rather, the line of its defense impliedly admitted said relationship. The issue of illegal dismissalwould have been irrelevant had there been no employer-employee relationship in the first place.

It was only in petitioners Petition for Certiorari before the CA did it impute liability on DFP asrespondents direct employer and as the entity who conducted the investigation and initiated

respondents termination proceedings. Obviously, petitioner changed its theory when it elevatedthe NLRC decision to the CA. The appellate court, therefore, aptly refused to consider the newtheory offered by petitioner in its petition. As the object of the pleadings is to draw the lines ofbattle, so to speak, between the litigants, and to indicate fairly the nature of the claims ordefenses of both parties, a party cannot subsequently take a position contrary to, or inconsistent,with its pleadings.18 It is a matter of law that when a party adopts a particular theory and the caseis tried and decided upon that theory in the court below, he will not be permitted to change histheory on appeal. The case will be reviewed and decided on that theory and not approached andresolved from a different point of view.19

The review of labor cases is confined to questions of jurisdiction or grave abuse ofdiscretion.20The alleged absence of employer-employee relationship cannot be raised for the firsttime on appeal.21The resolution of this issue requires the admission and calibration of evidenceand the LA and the NLRC did not pass upon it in their decisions.22 We cannot permit petitioner tochange its theory on appeal. It would be unfair to the adverse party who would have no moreopportunity to present further evidence, material to the new theory, which it could have done hadit been aware earlier of the new theory before the LA and the NLRC.23More so in this case as thesupposed employer of respondent which is DFP was not and is not a party to the present case.

In Pamplona Plantation Company v. Acosta,24petitioner therein raised for the first time in itsappeal to the NLRC that respondents therein were not its employees but of another company. Inbrushing aside this defense, the Court held:

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x x x Petitioner is estopped from denying that respondents worked for it. In the first place, it neverraised this defense in the proceedings before the Labor Arbiter. Notably, the defense it raisedpertained to the nature of respondents employment, i.e., whether they are seasonal employees,contractors, or worked under the pakyaw system. Thus, in its Position Paper, petitioner allegedthat some of the respondents are coconut filers and copra hookers or sakadors; some areseasonal employees who worked as scoopers or lugiteros; some are contractors; and someworked under the pakyaw system. In support of these allegations, petitioner even presented thecompanys payroll which will allegedly prove its allegations.

By setting forth these defenses, petitioner, in effect, admitted that respondents worked for it,albeit in different capacities. Such allegations are negative pregnant denials pregnant with theadmission of the substantial facts in the pleading responded to which are not squarely denied,and amounts to an acknowledgment that respondents were indeed employed bypetitioner. 25(Emphasis supplied.)

Also in Telephone Engineering & Service Co., Inc. v. WCC, et al.,26 the Court held that the lack ofemployer-employee relationship is a matter of defense that the employer should properly raise inthe proceedings below. The determination of this relationship involves a finding of fact, which isconclusive and binding and not subject to review by this Court.27

In this case, petitioner insisted that respondent was dismissed from employment for cause andafter the observance of the proper procedure for termination. Consequently, petitioner cannotnow deny that respondent is its employee. While indeed, jurisdiction cannot be conferred by actsor omission of the parties, petitioners belated denial that it is the employer of respondent isobviously an afterthought, a devise to defeat the law and evade its obligations.28

It is a fundamental rule of procedure that higher courts are precluded from entertaining mattersneither alleged in the pleadings nor raised during the proceedings below, but ventilated for thefirst time only in a motion for reconsideration or on appeal.29 Petitioner is bound by itssubmissions that respondent is its employee and it should not be permitted to change its theory.Such change of theory cannot be tolerated on appeal, not due to the strict application ofprocedural rules, but as a matter of fairness.30

As to the legality of respondents dismissal, it is well settled that under Rule 45 of the Rules ofCourt, only questions of law may be raised, the reason being that this Court is not a trier of facts,and it is not for this Court to reexamine and reevaluate the evidence on record.31 Findings of factand conclusions of the Labor Arbiter as well as those of the NLRC or, for that matter, any otheradjudicative body which can be considered as a trier of facts on specific matters within its field ofexpertise, should be considered as binding and conclusive upon the appellate courts.32

Petitioner dismissed respondent from employment based on the recommendation of the DFPDCholding respondent guilty of dishonesty for his direct participation in the "fake condemnation" and"pilferage" of the missing 1,020 Marlboro Pack of 5 cigarettes.33 Respondent was implicated in theanomalous transaction by his co-employees who pointed to the former as the one who orderedthe other suspects to look for a vehicle that would be used to transport the subject cigarettes.

This, according to the DFPDC, was odd and strange. With this act alone and by reason of hisposition, the DFPDC concluded, and affirmed by petitioner, that respondent definitely hadknowledge of the "fake condemnation." From these circumstances, petitioner sustained thefindings of dishonesty and dismissed respondent from employment.

Again, we agree with the appellate court that DFPDCs conclusions are not supported by clearand convincing evidence to warrant the dismissal of respondent. In illegal dismissal cases, theemployer is burdened to prove just cause for terminating the employment of its employee withclear and convincing evidence. This principle is designed to give flesh and blood to the guaranty

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of security of tenure granted by the Constitution to employees under the Labor Code.34 In thiscase, petitioner failed to submit clear and convincing evidence of respondents direct participationin the alleged fake condemnation proceedings. To be sure, unsubstantiated suspicions,accusations, and conclusions of employers do not provide for legal justification for dismissingemployees. In case of doubt, such cases should be resolved in favor of labor, pursuant to thesocial justice policy of labor laws and the Constitution.35

WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court ofAppeals Decision dated May 31, 2006 and Resolution dated September 21, 2006, in CA-G.R. SPNo. 70839, are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA

Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate JusticeChairperson

LUCAS P. BERSAMIN*

Associate JusticeROBERTO A. ABAD

Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the

case was assigned to the writer of the opinion of the Courts Division.

PRESBITERO J. VELASCO, JR.

Associate JusticeChairperson, Third Division

C E R T I F I C A T I O N

I certify that the conclusions in the above Decision had been reached in consultation before thecase was assigned to the writer of the opinion of the Court.

ANTONIO T. CARPIO

Senior Associate Justice(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)

Footnotes

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* Designated Acting Member in lieu of Associate Justice Jose Catral Mendoza, perSpecial Order No. 1241 dated June 14, 2012.

1 Penned by Associate Justice Noel G. Tijam, with Associate Justices Elvi John S.Asuncion and Mariflor P. Punzalan Castillo, concurring; rollo, pp. 33-41.

2 Rollo, p. 44.

3 Penned by Commissioner Tito F. Genilo, with Presiding Commissioner Lourdes C.Javier and Commissioner Ireneo B. Bernardo, concurring; CA rollo, pp. 35-37.

4 Rollo, pp. 34-36.

5 CA rollo, pp. 49-55.

6Id. at 54-55.

7 Embodied in a Decision dated January 21, 2002; penned by Commissioner Tito F.Genilo, with Presiding Commissioner Lourdes C. Javier and Commissioner Ireneo B.Bernardo, concurring; id. at 38-48.

8 CA rollo, pp. 35-37.

9 Rollo, p. 37.

10Id. at 38.

11Id. at. 40.

12Id. at 44.

13Id. at 14.

14 CA rollo, pp. 59-72.

15Id. at 105-121.

16Id. at 141-156.

17 CAPANELA v. NLRC, 311 Phil. 744, 755 (1995).

18

Cocomangas Hotel Beach Resort v. Visca, G.R. No. 167045, August 29, 2008, 563SCRA 705, 718; Manila Electric Company v. Benamira, G.R. No. 145271, July 14,2005, 463 SCRA 331, 348-349.

19 Cocomangas Hotel Beach Resort v. Visca, supra.

20 Magnolia Dairy Products Corp. v. NLRC, 322 Phil. 508, 516 (1996).

21Id.

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7/28/2019 Doubt 2

7/7

22Id.

23 China Air Lines, Ltd. v. Court of Appeals, G.R. Nos. 45985 and 46036, May 18,1990, 185 SCRA 449, 458.

24 G.R. No. 153193, December 6, 2006, 510 SCRA 249.

25 Pamplona Plantation Company v. Acosta, supra, at 253.

26 191 Phil. 663 (1981).

27 Telephone Engineering & Service Co., Inc. v. WCC, et al., supra, at 669.

28Id. at 670.

29 Manila Electric Company v. Benamira, supra note 18, at 349.

30Id.

31 Pamplona Plantation Company v. Acosta, supra note 24, at 252.

32 CAPANELA v. NLRC, supra note 17, at 755-756.

33 Rollo, p. 35.

34 Litton Mills, Inc. v. Sales, 481 Phil. 73, 88 (2004).

35 Century Canning Corporation v. Ramil, G.R. No. 171630, August 8, 2010, 627SCRA 192, 202.

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