Substantial Evidence Rule

Whether for just or authorized cause – including DOLE’s other cause, the employer should note and comply with the substantial evidence rule required by Labor Law.

In dismissal, the burden of proof is on the employer. To discharge this responsibility, the employer has to present substantial evidence to prove that the dismissal was valid.

Substantial evidence is defined as follows:

“In termination cases, the burden of proof rests on the employer to show that the dismissal is for a valid cause. Failing in which, the law considers the matter a case of illegal dismissal. In this relation, the quantum of proof which the employer must discharge is substantial evidence which, as defined in case law, means that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.” (Surigao Del Norte Electric Cooperative, Inc. v. Gonzaga, G.R. No. 187722, 10 June 2013)

The phrase “even if other minds, equally reasonable, might conceivably opine otherwise” is crucial. Consequently, there are two parts to the definition.

First, substantial evidence is “such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.” Meaning, the employer should be able to show and prove the basis for the just or authorized cause for employee termination. This often comes in the form of documentation – e.g. affidavits, incident reports, daily time records, employment contracts, company policies, and other employment records. These documents should be acceptable by a reasonable mind and they have to be adequate to support the employer’s decision.

Second, appreciation of substantial evidence may likely vary between the employer and the employee. So long as the employer complies with the above-first part of the definition, the opinion of the employee who might think there is not enough evidence –does not matter. People appreciate evidence differently. Even the Labor Arbiter, NLRC, Court of Appeals, and the Supreme Court sometimes have differences in the appreciation of evidence presented – and thus a labor case often flipflops as it gets appealed until the finality of the decision.

The case of Surigao Del Norte Electric Cooperative, Inc. v. Gonzaga illustrates this point where appreciation of evidence varied from the lower courts up to the Supreme Court:

“In a Decision dated May 29, 2008,35 the CA [Court of Appeals] reversed and set aside the NLRC’s [National Labor Relations Commission] ruling and, instead, reinstated the LA’s [Labor Arbitrator] decision with modification, deleting the award of moral and exemplary damages.

“[The CA] held that it is [the employers’] duty to present substantial evidence to show that the dismissal was due to a just and valid cause which they, however, failed to do. [The employers] evidence did not prove the imputed shortage in [the employee’s] collection since the numbers of the collection receipts were not indicated so as to compare them with the remittance receipts. Moreover, the CA did not give weight to the September 15, 2003 Audit Report, which was submitted for the first time before the NLRC, because [the employee] was not given an opportunity to submit any counter-evidence in order to rebut the same. For insufficiency of evidence, it therefore ruled that the dismissal was illegal.

“x x x

The Court concurs with the NLRC’s finding that [the employers’] evidence – which consists of the Collection Report, the Summaries, and the September 15, 2003 Audit Report with attached Cash Flow Summary – adequately supports the conclusion that [the employee] misappropriated the funds of the cooperative. The data indicated therein show gaping discrepancies between [the employee’s] collections and remittances, of which he was accountable for. In this accord, the burden of evidence shifted to [the employee] to prove that the reflected shortage was not attributable to him. However, despite being allowed to peruse the bills and receipts on record together with the assistance of an accountant and a counsel during the investigation proceedings, [the employee] could not reconcile the amounts of his collections and remittances and, instead, merely interposed bare and general denials.

“To note, [the employers] could not be faulted for not presenting each and every bill or receipt due to their voluminous character. Corollarily, the Court takes judicial notice of the fact that documents of such nature could indeed consist of multiple pages; likewise, it is clear that [the employers] only sought to establish a general result from the whole, i.e., the total cash shortage. In this regard, the requirement that the offeror first establish the voluminous nature of the evidence sought to be presented, as discussed in the CA’s March 30, 2009 Resolution, is dispensed with. Besides, technical rules of evidence are not strictly followed in labor cases and thus, their liberal application relaxes the same.

“Neither does the lack of collection receipt numbers, as [the employee] alleges, suffice to exculpate him from the dismissal charges. This is because the said numbers had already been supplied by petitioners through their eventual submission of the Cash Flow Summary which was attached to the September 15, 2003 Audit Report. On this score, the Court observes that the CA should have considered the foregoing documents as they corroborate the evidence presented by [the employers’] before the LA. Verily, labor tribunals, such as the NLRC, are not precluded from receiving evidence submitted on appeal as technical rules are not binding in cases submitted before them. In fact, labor officials should use every and reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.

“x x x

“All told, considering the totality of circumstances in this case, the Court finds the evidence presented by the petitioners, as opposed to the bare denial of [the employee], 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 [297] of the Labor Code, as amended…” (Surigao Del Norte Electric Cooperative, Inc. v. Gonzaga, supra.)

Gleaned from the foregoing, the employer is required to comply with the substantial evidence rule. Even if the employees think that the evidence insufficient, such opinion is not binding on the employer who has the right to determine whether the evidence is sufficient. When the matter escalates to a labor complaint, it becomes the responsibility of the courts to determine whether or not there is substantial evidence.

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