G.R. No. 247410 - Lafuente vs. Davao Central Warehouse Club, Inc.

Petitioners Nilo D. Lafuente and Billy C. Panaguiton were employed by Davao Central Warehouse Club, Inc. (DCWCI).
Lafuente was hired in 1993 as Dispatching-in-Charge and Panaguiton in 1995 as his Assistant Dispatcher.
Their primary duties involved recording model and serial numbers of appliances for dispatch, assisting in handling withdrawn items, and, as alleged by respondents, ensuring proper control and inspection of items leaving the warehouse.

On September 5, 2016, DCWCI issued a Notice of Preventive Suspension with Investigation Hearing against the petitioners.
The preventive suspension was imposed as a preemptive measure pending an investigation into several missing or lost appliances in the warehouse.
The notice charged them with “Gross and Habitual Neglect by the Employee of His Duties” as well as “Fraud/Willful Breach by the Employee of the Trust Reposed on Him by His Employer.”
The suspension and notice were aimed to protect company assets and ensure that no further losses occurred while the incident was being investigated.

He had no authority to be in the warehouse proper, noting that the dispatching area was approximately 60 meters away from the warehouse.
His responsibilities were limited to recording details for dispatch and assisting only in certain cases, with actual verification done by the guard on duty.

He assumed responsibility for checking units and handling dispatch when Lafuente was absent.
Upon discovering missing units, he immediately reported it to his manager, who then instructed him to search for the missing appliances, which only revealed empty boxes.

During investigations conducted by DCWCI, two memoranda issued on October 5, 2016, found petitioners guilty of gross and habitual neglect, leading to their termination.
The Memoranda noted that:

Petitioners admitted prior knowledge of the missing stocks.
Their failure to implement a proper inventory and follow due diligence contributed to the loss of items.

Petitioners filed a complaint for illegal dismissal seeking payment for holiday pay, overtime pay, proportionate 13th month pay, service incentive leave, and separation pay.
The Labor Arbiter (LA) initially ruled on January 25, 2017, that the petitioners had been illegally dismissed and granted separation pay in lieu of reinstatement along with other benefits, holding that their dismissal for gross and habitual neglect was unjustified.
Respondents countered that as dispatchers, petitioners were primarily responsible for the proper documentation and inspection of items leaving the warehouse, and their negligence led to a substantial loss.
The National Labor Relations Commission (NLRC) later reversed the LA’s decision on June 30, 2017, ruling that petitioners were validly dismissed for gross and habitual neglect of their duties despite not directly stealing the appliances.
The CA, in its Decision dated July 20, 2018 and Resolution dated January 23, 2019, affirmed the NLRC’s decision by emphasizing that:

Petitioners had a duty to document and verify every withdrawal from the warehouse.
Their negligence, even if not habitual in the strict sense, was grave enough in light of the substantial losses incurred.

The record shows inconsistencies in the delineation of petitioners’ roles, with petitioners arguing they were not responsible for inventory control due to the existence of other personnel such as the bodega-in-charge, the guard, and the encoder.
Conversely, respondents and subsequent decisions stressed that being stationed at the point of exit from the warehouse, petitioners had a duty to exercise due care in monitoring the dispatch of items.
It was noted that despite recovering some stolen items, the disappearance of 29 television sets caused real financial loss, thereby aggravating the consequences of their negligence.

Whether the preventive suspension, which later led to termination, violated the petitioners’ due process rights, specifically the twin notice rule under Article 297 [282] of the Labor Code.
Whether the petitioners’ alleged acts of gross and habitual neglect and failure to account for the warehouse stocks warranted their dismissal.
Whether the roles assigned to the petitioners as dispatchers exempted them from accountability for the missing items given the presence of other personnel responsible for inventory.
Whether the NLRC and CA correctly applied the standard of “clear and convincing evidence” in upholding the dismissal based on the magnitude of the losses incurred.