G.R. No. 193676 - Cosmos Bottling Corp. vs. Fermin

Wilson B. Fermin was employed as a forklift operator at Cosmos Bottling Corporation (COSMOS) since 27 August 1976, serving the company for 27 years.
His long tenure established him as a regular employee with established responsibilities and expectations regarding conduct and performance.

On 16 December 2002, Fermin was accused of stealing the cellphone of his co-employee, Luis Braga.
COSMOS issued a Show Cause Memorandum directing Fermin to explain why Braga’s cellphone was found in his locker.
Fermin submitted an affidavit the next day, asserting that his act of hiding the cellphone was merely a practical joke with the intention of returning it.

On 21 December 2002, Luis Braga provided a handwritten narration of events which detailed:

The circumstances in the locker room where he, while changing clothes, inadvertently left his cellphone behind with Fermin being the only other occupant.
His discovery that the cellphone was missing upon his return and the subsequent inspection by a security guard which found the cellphone in Fermin’s locker.
Later, Fermin’s attempt to ask for forgiveness, which Braga accepted, advising against repeating the act with colleagues.

Braga later executed an affidavit clarifying his belief that Fermin’s act was a prank without any intention to steal, eventually withdrawing his initial complaint.

An internal investigation by COSMOS found Fermin guilty of theft, a violation of the company’s rules and regulations.
Based on the investigation, Fermin was terminated from employment effective 6 October 2003, following his dismissal on or around 2 October 2003.

Fermin filed a Complaint for Illegal Dismissal, which was dismissed for lack of merit by the Labor Arbiter, who also considered other infractions such as disrespect to a superior, sleeping on duty, and abandonment of duty.
The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s ruling, and Fermin’s subsequent Motion for Reconsideration was denied.
Fermin then elevated his case by filing a Petition for Certiorari with the Court of Appeals (CA), which reversed the rulings of the lower tribunals and awarded him his full retirement benefits.
COSMOS countered by arguing that Fermin’s act demonstrated bad faith and that his prior infractions justified dismissal, maintaining that the recantation by Braga was merely an afterthought.

Two petitions for review (G.R. No. 193676 and G.R. No. 194303) were consolidated for determination by the Supreme Court.
Both petitions challenged the Court of Appeals’ Decision dated 20 May 2009 and the Resolution dated 8 September 2010, with core issues revolving around the propriety of Fermin’s dismissal and the award of full retirement benefits.
The controversy centered on whether the act of taking Braga’s cellphone, despite the mitigating circumstance of Braga’s subsequent recantation, amounted to misconduct justifying termination.

Whether the act of taking a co-employee’s cellphone constitutes an offense analogous to serious misconduct that justifies dismissal.
Whether the penalty of dismissal was proportionate and justified given the nature of the act, in light of the recantation and lack of material damage to COSMOS.
Whether the prior infractions attributed to Fermin (disrespect, sleeping on duty, and abandonment of duty) could legitimately be considered aggravating factors in relation to the subsequent violation.
Whether the factual findings of theft, as established by the administrative bodies and supported by substantial evidence, should preclude the awarding of full retirement benefits or backwages.
How the role of Braga’s affidavit of desistance influences the assessment of the gravity of Fermin’s misconduct.