G.R. No. 113271 October 16, 1997


Catolico was hired as a pharmacist by Waterous Drug Corporation. On 29 January 1990, WATEROUS Control Clerk Eugenio Valdez informed WATEROUS Vice President-General Manager Emma R. Co that he noticed an irregularity involving Catolico and Yung Shin Pharmaceuticals, Inc. (YSP) in the purchase of bottles of Voren tablets which he described that there was an over price of the bottles of tablets for a total of P640.00. YSP, Inc. Accounting Department (Ms. Estelita Reyes) confirmed that the difference represents refund of jack-up price of ten bottles of Voren tablets per sales invoice no. 266 as per their check voucher no. 629552, which was paid to Ms. Catolico through China Bank check no. 892068 dated November 9, 1989.

Catolico denied having received the check and that she is unaware of the overprice. However, it was confirmed by Ms. Saldana, EDRC Espana Pharmacy Clerk, that the check amounting to P640.00 was actually received by Ms. Catolico. That  Ms. Catolico even asked Ms. Saldana if she opened the envelope containing the check but Ms. Saldana answered her “talagang ganyan, bukas.” It appears that the amount in question (P640.00) had been pocketed by Ms. Catolico.

Catolico was asked to explain and she was informed that she would be placed on preventive suspension to protect the interests of the company. In a letter, Catolico requested access to the file containing Sales Invoice No. 266 for her to be able to make a satisfactory explanation. In said letter she protested Saldaña’s invasion of her privacy when Saldaña opened an envelope addressed to Catolico.

WATEROUS Supervisor Luzviminda Bautro, issued a memorandum notifying Catolico of her termination on the ground of her acts of dishonesty. Catolico filed before the Office of the Labor Arbiter a complaint for unfair labor practice, illegal dismissal, and illegal suspension. The Labor Arbiter found no proof of unfair labor practice against petitioners but decided in favor of Catolico because petitioners failed to prove the alleged acts of dishonesty. Hence, the dismissal was without just cause and due process. He thus declared the dismissal and suspension illegal but disallowed reinstatement, as it would not be to the best interest of the parties and awarded separation pay to Catolico.

NLRC affirmed the findings of the Labor Arbiter on the ground that petitioners were not able to prove a just cause for Catolico’s dismissal from her employment and declared that the check was inadmissible in evidence pursuant to Sections 2 and 3 of Article III of the Constitution.  That evidence of respondents being rendered inadmissible, by virtue of the constitutional right invoked by complainants, respondents’ case falls apart as it is bereft of evidence which cannot be used as a legal basis for the complainant’s dismissal.The NLRC modified the dispositive portion by deleting the award for illegal suspension . Petitioners filed this special civil action for certiorari stating that Public respondent gravely erred in applying Section 3, Article III of the 1987 Constitution.


  1. Whether or not Public respondent gravely erred in applying Section 3, Article III of the 1987 Constitution.- Yes.
  2. Whether or not Catolico was denied due process.-Yes.
  3. Whether there is a just cause for the dismissal.- No.


1. YES. The Court held that the constitutional violation upon which the NLRC anchored its decision is incorrect. In the case of  People v. Marti that the Bill of Rights does not protect citizens from unreasonable searches and seizures perpetrated by private individuals. However, it is not true that the citizens have no recourse against such assaults. Such an invasion gives rise to both criminal and civil liabilities. The court affirms the decision of the NLRC except to its reason for upholding the Labor Arbiter’s decision, that the evidence against private respondent was inadmissible for having been obtained in violation of her constitutional rights of privacy of communication and against unreasonable searches and seizures which is hereby set aside.

2. Catolico was denied due process. Procedural due process requires that an employee be apprised of the charge against him, given reasonable time to answer the charge, allowed amply opportunity to be heard and defend himself, and assisted by a representative if the employee so desires. In the case at bar, although Catolico was given an opportunity to explain her side, however, she was dismissed from the service in the memorandum issued by her Supervisor after receipt of her letter and that of her counsel. No hearing was ever conducted after the issues were joined through said letters.

3. Catolico was unjustly dismissed. It is settled that the burden is on the employer to prove just and valid cause for dismissing an employee, and its failure to discharge that burden would result in a finding that the dismissal is unjustified. Petitioner was not able to establish that there was an overcharge. It clearly appears then that Catolico’s dismissal was based on hearsay information. Estelita Reyes,  Accounting Department of YSP Phils., never testified nor executed an affidavit relative to this case; thus, we have to reject the statements attributed to her by Valdez. Hearsay evidence carries no probative value. Moreover, there is no evidence as to  Catolico’s participation in the purchase.

Catolico’s dismissal then was obviously grounded on mere suspicion, which in no case can justify an employee’s dismissal. Suspicion is not among the valid causes provided by the Labor Code for the termination of employment; and even the dismissal of an employee for loss of trust and confidence must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices, or suspicion.

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