Surigao del Norte Electric Cooperative, Inc. vs. Gonzaga

G.R. No. 187722. June 10, 2013


Gonzaga, lineman of Surigao Del Norte Electric Cooperative, was questioned regarding his remittance shortages in the total amount of P314,252.23, covering the period from February 2000 to May 2001.

During the investigative proceedings, Gonzaga was placed under preventive suspension. The Investigation Committee found Gonzaga guilty of (a) gross and habitual neglect of duty (b) misappropriation of REC funds and (c) failure to remit collections/monies under Code of Ethics. Written notice was sent to Gonzaga informing him of the company’s decision to relieve him from employment, as well as the grounds therefor.

Gonzaga filed a complaint with the NLRC for illegal dismissal claiming that he was denied due process and dismissed without just cause. He alleged that while he was asked to explain the P314,252.23 remittance shortage, he was nonetheless denied due process since the actual grounds for his dismissal, i.e., gross and habitual neglect of duties and responsibilities, misappropriation of REC funds and failure to remit collections/monies, were not indicated in the said memorandum. He also added that the cooperative’s proper procedure for the conduct of investigation, as outlined in Section 16.5 of the Code of Ethics was not followed; hence, he was denied due process

Petitioners further argued that Gonzaga was given enough opportunity to defend himself during the investigation. Likewise, he was properly informed of the accusation against him.

LA rendered a Decision, finding that petitioners were unable to show that Gonzaga’s dismissal was just and valid and thus, ordered that the latter be reinstated. Further, it held that Gonzaga was not afforded due process because the mandatory procedure for the conduct of investigation, pursuant to Section 16.5 of the Code of Ethics, was not followed.

The NLRC vacated the ruling of the LA, finding Gonzaga to have been dismissed for a just and valid cause.

The CA reversed and set aside the NLRC’s ruling and, instead, reinstated the LA’s decision


(a) WON Gonzaga was dismissed without due course

(b) WON Gonzaga is deprived of due process when he was not afforded of a formal hearing or conference  as provided in cooperative’s proper procedure for the conduct of investigation.


(a) NO. Considering the totality of circumstances in this case, the Court finds the evidence presented by the petitioners sufficient to constitute substantial evidence to prove that he committed serious misconduct and gross and habitual neglect of duty to warrant his dismissal from employment. Such are just causes for termination which are explicitly enumerated under Article 296 of the Labor Code.

(b) YES. Jurisprudence dictates that it is not enough that the employee is given an “ample opportunity to be heard” if company rules or practices require a formal hearing or conference. In such instance, the requirement of a formal hearing and conference becomes mandatory.

While Gonzaga was given an ample opportunity to be heard within the purview of the foregoing principles, SURNECO, however, failed to show that it followed its own rules which mandate that the employee who is sought to be terminated be afforded a formal hearing or conference. As above-discussed, SURNECO remains bound by ― and hence, must faithfully observe ― its company policy embodied in Section 16.5 of its own Code of Ethics

Since only an informal inquiry was conducted in investigating Gonzaga’s alleged cash shortages, SURNECO failed to comply with its own company policy, violating the proper termination procedure altogether. In this relation, case law states that an employer who terminates an employee for a valid cause but does so through invalid procedure is liable to pay the latter nominal damages.

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