G.R. No. 181490 , April 23, 2014
Mirant (Philippines) Corporation and Edgardo A. Bautista, Petitioners, vs. Joselito A. Caro, Respondent.

FACTS

Respondent Joselito A. Caro was hired by Mirant Pagbilao Corporation (a related company of petitioner Mirant (Philippines) Corporation) on January 3, 1994, and at the time of his termination, he was the Procurement Supervisor of Mirant Pagbilao assigned at petitioner corporation’s corporate office, a position considered confidential. On November 3, 2004, petitioner corporation conducted a random drug test pursuant to Republic Act No. 9165 , and respondent was among the employees randomly selected. Respondent was notified via intracompany correspondence, which he signed. Respondent alleges that around 11:30 a.m. that day, he received a phone call informing him of a bombing incident near his wife’s workplace in Tel Aviv, Israel. He claims he informed his department secretary he would attend to this emergency and left the office to go to the Israeli Embassy to confirm the news, but was not allowed entry. He returned to the office around 6:15 p.m. and received a text message from a member of the Drug Watch Committee about the test. He called to explain his absence and offered to take the test the next day at his own expense. On November 8, 2004, petitioner corporation issued a Show Cause Notice charging him with “unjustified refusal to submit to random drug testing.” Respondent submitted a written explanation. An Investigating Panel was formed, which found him guilty but, considering mitigating circumstances (no direct refusal and ten years of service), recommended a four-week suspension without pay. However, the company’s Asst. Vice President recommended termination, arguing that avoidance was synonymous with refusal. On February 14, 2005, respondent was terminated. Respondent filed a complaint for illegal dismissal, arguing non-compliance with procedural due process (notice and hearing) and that his actions did not constitute unjustified refusal.

ISSUE

Whether respondent Joselito A. Caro was illegally dismissed.

RULING

Yes, respondent was illegally dismissed. The Supreme Court affirmed the Court of Appeals’ decision with modification, holding only petitioner corporation liable.
On substantive due process, the Court found that respondent’s failure to undergo the random drug test was justified. His reason—attending to a family emergency involving his wife’s safety—was a valid justification. His immediate offer to take the test the next day at his own expense negated any intention to refuse or evade the test. The company’s own Investigating Panel found the term “unjustified refusal” ambiguous and did not recommend termination. The employer’s prerogative to discipline must be exercised in good faith and without abuse of discretion, which was not present here.
On procedural due process, the Court found that while respondent was given a notice to explain (Show Cause Notice), the subsequent investigation did not satisfy the “hearing” requirement. The “hearing” in administrative due process does not require a formal trial-type proceeding but demands that the employee be given a real opportunity to be heard and defend himself. The investigation here was a mere review of documents; respondent was not given the chance to confront witnesses or present his side in a meaningful way. Thus, procedural due process was violated.
The Court modified the CA decision by absolving petitioner Edgardo A. Bautista, then President of the corporation, from personal liability, as there was no evidence he acted with malice or bad faith. Only the corporate petitioner was held liable for illegal dismissal.