Atlas Farms V NLRC

Facts:
Private respondent Jaime O. dela Peña was employed as a veterinary aide by petitioner Atlas Farms, Inc.,
in December 1975. On 3 March 1993, Peña was allegedly caught urinating and defecating on company
premises not intended for the purpose. The farm manager of petitioner issued a formal notice directing
him to explain within 24 hours why disciplinary action should not be taken against him for violating
company rules and regulations. Peña refused, however, to receive the formal notice. On 20 March 1993,
a notice of termination with payment of his monetary benefits was sent to him. He duly acknowledged
receipt of his separation pay. Co-respondent Martial I. Abion was a carpenter/mason and a maintenance
man whose employment by petitioner commenced on 8 October 1990. He allegedly caused the clogging
of the fishpond drainage resulting in damages worth several hundred thousand pesos when he
improperly disposed of the cut grass and other waste materials into the pond's drainage system.
Petitioner sent a written notice to Abion, requiring him to explain what happened, otherwise,
disciplinary action would be taken against him. He refused to receive the notice and give an explanation.
The company terminated his services on 27 October 1992. He acknowledged receipt of a written notice
of dismissal, with his separation pay. Thereafter, Peña and Abion filed separate complaints for illegal
dismissal that were later consolidated. Both claimed that their termination from the service was due to
petitioner's suspicion that they were the leaders in a plan to form a union to compete and replace the
existing management-dominated union.
NLRC: The labor arbiter dismissed their complaints on the ground that the grievance machinery in the
collective bargaining agreement (CBA) had not yet been exhausted. Private respondents availed of the
grievance process, but later on refiled the case before the NLRC in Region IV. They alleged "lack of
sympathy" on petitioner's part to engage in conciliation proceedings. Their cases were consolidated in
the NLRC. At the initial mandatory conference, petitioner filed a motion to dismiss on the ground of lack
of jurisdiction, alleging private respondents themselves admitted that they were members of the
employees' union with which petitioner had an existing CBA. According to petitioner, jurisdiction over
the case belonged to the grievance machinery and thereafter the voluntary arbitrator, as provided in the
CBA. The labor arbiter dismissed the complaint for lack of merit, finding that the case was one of illegal
dismissal and did not involve the interpretation or implementation of any CBA provision. Private
respondents appealed to the National Labor Relations Commission (NLRC), which reversed the labor
arbiter's decision.
CA: Dissatisfied with the NLRC ruling, petitioner went to the Court of Appeals by way of a petition for
certiorari under Rule 65, seeking reinstatement of the labor arbiter's decision. The appellate court
denied the petition and affirmed the NLRC resolution.
ISSUE: Whether private respondents were illegally dismissed, thus effectively placing the jurisdiction of
the case with the labor arbiter and the NLRC.
RULING: YES.
The NLRC found that petitioner did not comply with the requirements of a valid dismissal. For a dismissal
to be valid, the employer must show that: (1) the employee was accorded due process, and (2) the
dismissal must be for any of the valid causes provided for by law. No evidence was shown that private
respondents refused, as alleged, to receive the notices requiring them to show cause why no disciplinary
action should be taken against them. Without proof of notice, private respondents who were
subsequently dismissed without hearing were also deprived of a chance to air their side at the level of
the grievance machinery. Given the fact of dismissal, it can be said that the cases were effectively
removed from the jurisdiction of the voluntary arbitrator, thus placing them within the jurisdiction of
the labor arbiter. Where the dispute is just in the interpretation, implementation or enforcement stage,
it may be referred to the grievance machinery set up in the CBA, or brought to voluntary arbitration.
But, where there was already actual termination, with alleged violation of the employee's rights, it is
already cognizable by the labor arbiter.

Atlas Farms V NLRC

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