G.R. No.

214399

ARMANDO N. PUNCIA, Petitioner,

vs.
TOYOTA SHAW/PASIG, INC., Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated June 9, 2014 and the Resolution3 dated
September 23, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 132615, which annulled and set aside the
Decision4 dated February 14, 2013 and the Resolution5 dated August 30, 2013 of the National Labor Relations
Commission (NLRC) in NLRC NCR CN. 10-15949-11/ NLRC LAC No. 07-001991-12 and instead, reinstated the
Decision6 dated May 4, 2012 of the Labor Arbiter (LA) finding that respondent Toyota Shaw/Pasig, Inc. (Toyota)
validly dismissed petitioner Armando N. Puncia (Puncia) for just cause.

The Facts

Puncia alleged that since 2004, he worked as a messenger/collector for Toyota and was later on appointed on
March 2, 2011 as a Marketing Professional7 tasked to sell seven (7) vehicles as monthly quota.8 However,
Puncia failed to comply and sold only one (1) vehicle for the month of July and none for August, 9 prompting
Toyota to send him a Notice to Explain.10 In reply, 11 Puncia stated that as a trainee, he was only required to sell
three (3) vehicles per month; that the month of May has always been a lean month; and that he was able to sell
four (4) vehicles in the month of September.12 Thereafter, a hearing was conducted but Puncia failed to appear
despite notice.13

On October 18, 2011, Toyota sent Puncia a Notice of Termination, 14 dismissing him on the ground of
insubordination for his failure to attend the scheduled hearing and justify his absence. 15 This prompted Puncia
to file a complaint16 for illegal dismissal with prayer for reinstatement and payment of backwages, unfair labor
practice, damages, and attorney's fees against Toyota and its officers, claiming, inter alia, that Toyota dismissed
him after discovering that he was a director of the Toyota-Shaw Pasig Workers Union-Automotive Industry
Worker's Alliance; and that he was terminated on the ground of insubordination and not due to his failure to meet
his quota as contained in the Notice to Explain.17

In its defense, Toyota denied the harassment charges and claimed that there was a valid cause to dismiss
Puncia, considering his failure to comply with the company's strict requirements on sales quota. It likewise stated
that Puncia has consistently violated the company rules on attendance and timekeeping as several disciplinary
actions were already issued against him.18

The LA Ruling

In a Decision19 dated May 4, 2012, the LA dismissed Puncia's complaint for lack of merit, but nevertheless,
ordered Toyota to pay Puncia his money claims consisting of his earned commissions, 13th month pay for 2011,
sick leave, and vacation leave benefits.20

The LA found that Puncia was dismissed not because of his involvement in the labor union, but was terminated
for a just cause due to his inefficiency brought about by his numerous violations of the company rules on
attendance from 2006 to 2010 and his failure to meet the required monthly quota.21 This notwithstanding, the LA
found Puncia entitled to his money claims, considering that Toyota failed to deny or rebut his entitlement
thereto.22

Aggrieved, Puncia appealed23 to the NLRC.

The NLRC Ruling

In a Decision24 dated February 14, 2013, the NLRC reversed the LA ruling and, accordingly, declared Puncia to
have been illegally dismissed by Toyota, thus, entitling him to reinstatement and backwages.25 The NLRC found
that Toyota illegally dismissed Puncia from employment as there were no valid grounds to justify his termination.
Moreover, the NLRC observed that Toyota failed to comply with the due process requirements as: first, the
written notice served on the employee did not categorically indicate the specific ground for dismissal sufficient
to have given Puncia a reasonable opportunity to explain his side, since the Intra-Company
Communication26 providing the company rules failed to explain in detail that Puncia's deficiency merited the
penalty of dismissal;27 and second, Puncia's dismissal was not based on the same grounds cited in the Notice
to Explain, since the ground indicated was Puncia's failure to meet the sales quota, which is different from the
ground stated in the Notice of Termination, which is his unjustified absence during the scheduled hearing.28

Both parties filed their separate motions for reconsideration,29 which were denied in a Resolution30 dated August
30, 2013.

Aggrieved, Toyota filed a Petition for Certiorari31 before the CA, which was docketed as CA-G.R. SP No. 132615
and was raffled to the First Division (CA-First Division). In the same vein, Puncia filed his Petition
for Certiorari32 before the CA, which was docketed as CA-G.R. SP No. 132674 and was raffled to the Eleventh
Division (CA-Eleventh Division).33

The CA Proceedings

In a Resolution34 dated November 29, 2013, the CA-Eleventh Division dismissed outright CA-G.R. SP No.
132674 on procedural grounds. Consequently, Puncia filed an Omnibus Motion (For Consolidation and
Reconsideration of Order of November 29, 2013)35 and a Supplement to the Omnibus Motion,36 seeking the
consolidation of CA-G.R. SP No. 132674 with CA-G.R. SP No. 132615.

In a Resolution37 dated January 24, 2014, the CA-First Division denied the motion for consolidation on the ground
that CA-G.R. SP No. 132674 was already dismissed by the CA-Eleventh Division. Thereafter, and while CA-
G.R. SP No. 132674 remained dismissed, the CA-First Division promulgated the assailed Decision38 dated
June 9, 2014 (June 9, 2014 Decision) in CA-G.R. SP No. 132615 annulling and setting aside the NLRC ruling
and reinstating that of the LA. It held that Toyota was able to present substantial evidence in support of its
contention that there was just cause in Puncia's dismissal from employment and that it was done in compliance
with due process, considering that: (a) Puncia's repeated failure to meet his sales quota constitutes gross
inefficiency and gross neglect of duties; and (b) Puncia was afforded due process as he was able to submit a
written explanation within the period given to him by Toyota.39

Dissatisfied, Puncia filed a motion for reconsideration,40 which the CA-First Division denied in the assailed
Resolution41 dated September 23, 2014 (September 23, 2014 Resolution).

Meanwhile, in a Resolution42 dated July 22, 2014, the CA-Eleventh Division reconsidered its dismissal of CA-
G.R. SP No. 132674, and accordingly, reinstated the same and ordered Toyota to file its comment thereto.

In view of the foregoing, Puncia filed the instant petition43 mainly contending that the rulings in CA-G.R. SP No.
132615, i.e., the assailed June 9, 2014 Decision and September 23, 2014 Resolution, should be set aside and
the case be remanded back to the CA for consolidation with CA-G.R. SP No. 132674 so that both cases will be
jointly decided on the merits.44

For its part,45 Toyota maintained that the CA-First Division correctly promulgated its June 9, 2014 Decision in
CA-G.R. SP No. 132615, considering that at the time of promulgation, there was no other pending case before
the CA involving the same issues and parties as CA-G.R. SP No. 132674 was dismissed by the CA-Eleventh
Division on November 29, 2013, and was only reinstated on July 22, 2014.46

The Issues Before the Court

The issues for the Court's resolution are (a) whether or not the CA-First Division correctly promulgated its June
9, 2014 Decision in CA-G.R. SP No. 132615 without consolidating the same with CA-G.R. SP No. 132674;
and (b) whether or not Puncia was dismissed from employment for just cause.

The Court's Ruling

The petition is denied.

At the outset, the Court notes that consolidation of cases is a procedure sanctioned by the Rules of Court for
actions which involve a common question of law or fact before the court.47 It is a procedural device

granted to the court as an aid in deciding how cases in its docket are to be tried so that the business of the court
may be dispatched expeditiously and with economy while providing justice to the parties.48

The rationale for consolidation is to have all cases, which are intimately related, acted upon by one branch of
the court to avoid the possibility of conflicting decisions being rendered49 and in effect, prevent confusion,
unnecessary costs,50 and de1ay.51 It is an action sought to avoid multiplicity of suits; guard against oppression
and abuse; clear congested dockets; and to simplify the work of the trial court in order to attain justice with the
least expense and vexation to the parties-litigants.52

In order to determine whether consolidation is proper, the test is to check whether the cases involve
the resolution of common questions of law, related facts, 53 or the same parties. 54 Consolidation is proper
whenever the subject matter involved and the relief demanded in the different suits make it expedient for the
court to determine all of the issues involved and adjudicate the rights of the parties by hearing the suits
together.55 However, it must be stressed that an essential requisite of consolidation is that the several
actions which should be pending before the court, arise from the same act, event or transaction, involve
the same or like issues, and depend largely or substantially on the same evidence. 56 As succinctly stated
in the rules, consolidation is allowed when there are similar actions which are pending before the court57 - for
there is nothing to consolidate when a matter has already been resolved and the very purpose of consolidation,
to avoid conflicting decisions and multiplicity of suits, rendered futile. The Court's pronouncement in Honoridez
v. Mahinay, 58 is instructive on this matter, to wit:

Petitioners attempt to revive the issues in Civil Case No. CEB-16335 by moving for the consolidation of the same
with Civil Case No. CEB-23653. Under Section 1, Rule 31 of the Rules of Court, only pending actions
involving a common question of law or fact may be consolidated. Obviously, petitioners cannot make out a
case for consolidation in this case since Civil Case No. CEB-16335, the case which petitioners seek to
consolidate with the case a quo, has long become final and executory; as such, it cannot be re-litigated in the
instant proceedings without virtually impeaching the correctness of the decision in the other case. Public policy
abhors such eventuality.59 (Emphasis and underscoring supplied)

In the instant case, while there were indeed two (2) separate petitions filed before the CA assailing the Decision
dated February 14, 2013 and the Resolution dated August 30, 2013 of the NLRC in NLRC NCR CN. 10-15949-
11/ NLRC LAC No. 07-001991-12, i.e., CA-G.R. SP No. 132615 and CA-G.R. SP No. 132674, it must
nevertheless be stressed that CA-G.R. SP No. 132674 was dismissed by the CA-Eleventh Division as early as
November 29, 2013 due to procedural grounds. This fact was even pointed out by the CA-First Division in its
Resolution60 dated January 24, 2014 when it held that CA-G.R. SP No. 132674 could no longer be consolidated
with CA-G.R. SP No. 132615 since the former case had already been dismissed. From that point until the CA-
First Division's promulgation of the assailed June 9, 2014 Decision in CA-G.R. SP No. 132615, no consolidation
between CA-G.R. SP No. 132615 and CA-G.R. SP No. 132674 could take place mainly because the latter case
remained dismissed during that time. In other words, when the CA-First Division promulgated its ruling in CA-
G.R. SP No. 132615, it was the one and only case pending before the CA assailing the aforesaid NLRC rulings.
Therefore, the CA-First Division acted within the scope of its jurisdiction when it promulgated its ruling in CA-
G.R. SP No. 132615 without having the case consolidated with CA-G.R. SP No. 132674, notwithstanding the
latter case's reinstatement after said promulgation.
It should be emphasized that the consolidation of cases is aimed to simplify the proceedings as it contributes to
the swift dispensation of justice.61 As such, it is addressed to the sound discretion of the court and the latter's
action in consolidation will not be disturbed in the absence of manifest abuse of discretion tantamount to an
evasion of a positive duty or a refusal to perform a duty enjoined by law,62 which is absent in this case.

The foregoing notwithstanding, the Court deems it appropriate to look into the issue of the validity of Puncia's
dismissal so as to finally resolve the main controversy at hand.

In his petition, Puncia insists that the CA gravely erred in upholding his dismissal, considering that the
administrative proceeding against him was due to his failure to meet his monthly sales quota, but he was
dismissed on the ground of gross insubordination.63 On the other hand, Toyota maintains that the CA correctly
declared Puncia's termination to be valid and in compliance with due process.64

It is settled that "for a dismissal to be valid, the rule is that the employer must comply with both substantive and
procedural due process requirements. Substantive due process requires that the dismissal must be pursuant to
either a just or an authorized cause under Articles 297, 298 or 299 (formerly Articles 282, 283, and 284)65 of the
Labor Code. Procedural due process, on the other hand, mandates that the employer must observe the twin
requirements of notice and hearing before a dismissal can be effected."66 Thus, to determine the validity of
Puncia' s dismissal, there is a need to discuss whether there was indeed just cause for his termination.

In the instant case, records reveal that as a Marketing Professional for Toyota, Puncia had a monthly sales quota
of seven (7) vehicles from March 2011 to June 2011. As he was having trouble complying with said quota, Toyota
even extended him a modicum of leniency by lowering his monthly sales quota to just three (3) vehicles for the
months of July and August 2011; but even then, he still failed to comply.67 In that six (6)-month span, Puncia
miserably failed in satisfying his monthly sales quota, only selling a measly five (5) vehicles out of the 34 he was
required to sell over the course of said period. Verily, Puncia's repeated failure to perform his duties
- i.e., reaching his monthly sales quota - for such a period of time falls under the concept of gross inefficiency. In
this regard, case law instructs that "gross inefficiency" is analogous to "gross neglect of duty," a just cause of
dismissal under Article 297 of the Labor Code, for both involve specific acts of omission on the part of the
employee resulting in damage to the employer or to his

business.68 In Aliling v. Feliciano,69 the Court held that an employer is entitled to impose productivity standards
for its employees, and the latter's non-compliance therewith can lead to his termination from work, viz.:

[T]he practice of a company in laying off workers because they failed to make the work quota has been
recognized in this jurisdiction. x x x. In the case at bar, the petitioners' failure to meet the sales quota
assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or
probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill
reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such
inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to
complete the same within the allotted reasonable period, or by producing unsatisfactory
results.70 (Emphases and underscoring supplied)

Indisputably, Toyota complied with the substantive due process requirement as there was indeed just cause for
Puncia's termination.

Anent the issue of procedural due process, Section 2 (I), Rule XXIII, Book V of the Omnibus Rules Implementing
the Labor Code71 provides for the required standard of procedural due process accorded to employees who
stand to be terminated from work, to wit:

Section 2. Standards of due process; requirements of notice. - In all cases of termination of employment, the
following standards of due process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 [now Article 297] of the Labor
Code:
(a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee
so desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented
against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.

The foregoing standards were then further refined in Unilever Philippines, Inc. v. Rivera72 as follows:

To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds
for termination against them, and a directive that the employees are given the opportunity to submit their
written explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every
kind of assistance that management must accord to the employees to enable them to prepare adequately for
their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice
to give the employees an opportunity to study the accusation against them, consult a union official or lawyer,
gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order
to enable the employees to intelligently prepare their explanation and defenses, the notice should
contain a detailed narration of the facts and circumstances that will serve as basis for the charge against
the employees. A general description of the charge will not suffice. Lastly, the notice should specifically
mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being
charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein
the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them;
(2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the
management. During the hearing or conference, the employees are given the chance to defend themselves
personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or
hearing could be used by the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the
employees a written notice of termination indicating that: (1) all circumstances involving the charge
against the employees have been considered; and (2) grounds have been established to justify the
severance of their employment.73 (Emphases and underscoring supplied)

In this case, at first glance it seemed like Toyota afforded Puncia procedural due process, considering
that: (a) Puncia was given a Notice to Explain;74 (b) Toyota scheduled a hearing on October 17, 2011 regarding
the charge stated in the Notice to Explain; 75 (c) on the date of the hearing, Puncia was able to submit a
letter76 addressed to Toyota's vehicle sales manager explaining his side, albeit he failed to attend said hearing;
and (d) Toyota served a written Notice of Termination77 informing Puncia of his

dismissal from work. However, a closer look at the records reveals that in the Notice to Explain, Puncia was
being made to explain why no disciplinary action should be imposed upon him for repeatedly failing to reach his
monthly sales quota, which act, as already adverted to earlier, constitutes gross inefficiency. On the other hand,
a reading of the Notice of Termination shows that Puncia was dismissed not for the ground stated in the Notice
to Explain, but for gross insubordination on account of his non-appearance in the scheduled October 17, 2011
hearing without justifiable reason. In other words, while Toyota afforded Puncia the opportunity to refute the
charge of gross inefficiency against him, the latter was completely deprived of the same when he was dismissed
for gross insubordination - a completely different ground from what was stated in the Notice to Explain. As such,
Puncia's right to procedural due process was violated.
Hence, considering that Toyota had dismissed Puncia for a just cause, albeit failed to comply with the proper
procedural requirements, the former should pay the latter nominal damages in the amount of P30,000.00 in
accordance with recent jurisprudence.78

WHEREFORE, the petition is DENIED. The Decision dated June 9, 2014 and the Resolution dated September
23, 2014 of the Court of Appeals in CA-G.R. SP No. 132615 are hereby AFFIRMED with

MODIFICATION in that respondent Toyota Shaw/Pasig, Inc. is ORDERED to indemnify petitioner Armando N.
Puncia nominal damages in the amount of P30,000.00 for dismissing the latter in violation of his right to
procedural due process, but for a just cause.

SO ORDERED.