Dismissal Upheld: Dishonest Acts Justify Termination Despite Retraction

The Supreme Court has long protected employees' security of tenure, but that protection has limits. When a worker commits a dishonest act that betrays the employer's trust, dismissal can be valid—even if the complaining witness later retracts her statement. In Millares v. Philippine Long Distance Telephone Co., Inc. (G.R. No. 154078, May 6, 2005), the Court laid down clear rules on when retractions may be disregarded and what constitutes sufficient evidence for termination.

The Facts: A Promise to Install a Telephone Line

Edgardo Millares was a junior cable splicer at PLDT's Tondo Exchange. In May 1995, a prospective subscriber, Celestina Ignacio, complained that Millares accepted P3,800 from her, promising to install a telephone line at her residence—but never did. Despite her demands, he refused to return the money.

During PLDT's clarificatory hearing, Millares first denied knowing Ignacio or receiving any payment. He later admitted the offense and promised to repay her. PLDT sent him two inter-office memoranda charging him with willful violation of company rules, but he refused to submit a written explanation.

In September 1995, Millares finally paid Ignacio the P3,800. She then executed a written retraction, claiming she was forced to file the complaint because Millares failed to pay a loan. PLDT nevertheless found Millares guilty of extortion and serious misconduct and dismissed him effective July 19, 1996.

The Issue: Was There Substantial Evidence of Misconduct?

The central question was whether PLDT proved by substantial evidence that Millares committed serious misconduct warranting dismissal. The Labor Arbiter initially ruled the dismissal illegal, but the NLRC reversed, and the Court of Appeals affirmed the NLRC. The Supreme Court upheld the dismissal.

The Ruling: Substantial Evidence Is Enough

The Court emphasized that substantial evidence—not proof beyond reasonable doubt—is the standard for imposing disciplinary action. Substantial evidence exists where the employer has reasonable ground to believe the employee is responsible for the misconduct, making him unworthy of the trust and confidence his position demands.

Here, Ignacio's complaint and testimony established that Millares demanded money in exchange for facilitating a telephone installation. This conduct violated PLDT's rules and constituted serious misconduct under Article 282 of the Labor Code, a just cause for termination.

Why the Retraction Did Not Save the Employee

The Court rejected Millares' reliance on Ignacio's retraction. The records showed she retracted only after Millares paid her the P3,800. The Court noted that retractions are "frowned upon by the courts" because they are "exceedingly unreliable"—they can easily be obtained through intimidation or monetary consideration. A retraction does not automatically negate an earlier, candid declaration made before any payment or influence.

Due Process Was Satisfied

The Court also rejected Millares' claim of denial of due process. Procedural due process in dismissal requires two notices: (1) a notice apprising the employee of the specific acts or omissions for which dismissal is sought, and (2) a subsequent notice informing him of the employer's decision to dismiss. PLDT sent both memoranda—dated August 28 and September 6, 1995—which detailed the accusation and directed Millares to explain in writing. He chose to remain silent. Due process does not require an actual hearing; the opportunity to be heard suffices.

Practical Takeaways

• Dishonesty toward customers is serious misconduct. An employee who solicits money from clients or subscribers for services that are part of his job betrays the employer's trust and risks dismissal under Article 282 of the Labor Code.
• Substantial evidence is the standard. Employers need only reasonable grounds to believe misconduct occurred—not proof beyond reasonable doubt—to justify termination.
• Retractions are viewed with suspicion. A complainant's recantation, especially one made after payment or settlement, will not automatically invalidate a dismissal based on earlier, consistent statements.
• Two notices satisfy due process. Employers must give the employee a notice of the charge and a notice of the decision to dismiss. The employee's refusal to respond does not defeat the employer's compliance.
• Payment to the complainant does not erase liability. Returning the money after the fact does not obliterate the misconduct already committed.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.