Title
Pepsi-Cola Products Philippines Inc. vs. National Labor Relations Commission
Case
G.R. No. 121324
Decision Date
Sep 30, 1999
PCPPI employee Marcial De Lira dismissed for alleged falsification, dishonesty, and threats; Supreme Court ruled dismissal illegal, ordered reinstatement with backwages due to insufficient evidence.
dismissal
irregularities
complimentary products
A

Case Summary (G.R. No. 121324)

Factual Background: The Audit Findings and Administrative Charges

The April 1991 audit report identified alleged irregularities involving private respondent’s handling of deals, empty bottles, and complimentary products, as well as his conduct during administrative proceedings. The report described, among others, the following matters: first, an apparent discrepancy in reported sales deals for Bonita Store in Maydulong, Eastern Samar, where confirmation allegedly showed that only sixteen cases of the reported fifty-nine cases deals were actually received; second, the retrieval of one hundred seventy-six cases of loaned empties from customer Marcela Cabanatan without the issuance of acknowledgment documents, and claims by Cabanatan that she did not reflect the claimed loan and did not receive returned empties; third, an extension of a one-shot complimentary deal to Elisa R. Anosa, reported as the owner of a supposed Anosa Store, which petitioner’s verification allegedly revealed did not exist, with purchases later described as marginal.

After private respondent was asked to explain the irregularities, he was placed on preventive suspension without pay from May 7 to May 18, 1991. He subsequently provided written explanations: he admitted the delivery of sixteen cases to Daniel Baldono’s store but claimed that the remaining cases were converted to cash and used for a hospital-related purpose; he explained that he pulled out empty bottles from Cabanatan because Cabanatan allegedly had delinquent unpaid accounts, making deliveries at that time impossible and leaving empties idle; and he admitted negotiating a one-shot deal with Anosa, explaining that Anosa was an employee in the Borongan Treasurer’s office and that the negotiations allowed the office to become a “Pepsi exclusive,” despite the alleged confusion over store existence.

During the administrative investigation, petitioner further charged private respondent with uttering foul language and veiled threats against his superiors. As the investigation proceeded, the preventive suspension without pay was extended multiple times, first from May 18 to June 5, 1991, and then from June 6 to June 30, 1991 but with pay. Ultimately, on July 1, 1991, petitioner sent a notice of termination finding private respondent guilty of the three irregularities and the additional offense involving threatening and obscene language.

The Notice of Termination and Cited Company Rules

In its notice of termination, petitioner anchored termination on three irregularities: alleged falsification of company documents due to reporting that fifty-nine cases were given to Bonita Store when only sixteen were confirmed; alleged stealing and dishonesty due to retrieval and lending of loaned empties from Marcela Cabanatan without acknowledgment, with the denial of claimed returns; and alleged falsification or misconduct relating to a negotiated one-shot complimentary deal with Elisa Anosa’s nonexistent store. Petitioner also cited alleged utterances made during the administrative hearing, including offensive language and veiled threats.

Petitioner concluded that the foregoing acts violated specified company rules, including G-8 on falsification of company documents, H-4 on stealing and other forms of dishonesty, and H-20 on commission of a crime as defined in the Revised Penal Code and other laws within company premises. Petitioner therefore terminated private respondent’s services for cause effective July 1, 1991, also stating that it could file appropriate criminal action if private respondent failed to return the amount allegedly appropriated.

Proceedings Before the Labor Arbiter

Private respondent filed a complaint for illegal dismissal before the NLRC Regional Arbitration Branch VIII on July 16, 1991. In a decision dated March 31, 1993, the labor arbiter held that petitioner failed to establish a valid and just cause for dismissal. The labor arbiter found the factual foundation for dismissal insufficient and ordered reinstatement without loss of seniority rights, plus backwages and benefits from July 1, 1991 until March 31, 1993. It also awarded backwages for twenty-four days covering the period of preventive suspension without pay in excess of thirty days, and granted attorney’s fees equivalent to ten percent of the total award.

NLRC Review and Denial of Reconsideration

Petitioner appealed to the NLRC. The NLRC affirmed the labor arbiter’s decision. After petitioner’s motion for reconsideration was denied on July 18, 1995, petitioner resorted to a special civil action for certiorari, claiming that the NLRC committed grave abuse of discretion.

Parties’ Contentions in Certiorari

Petitioner argued that the NLRC improperly substituted its judgment for the employer’s prerogative as to which acts were inimical to the business and interests of the employer, and that it erred in justifying the alleged admitted violations of petitioner’s rules. Petitioner asserted that the NLRC ignored jurisprudence on the employer’s prerogative to dismiss employees who violate working rules and regulations, including dismissal of a managerial employee despite a finding that private respondent deliberately violated working policies.

Petitioner maintained that the administrative evidence proved serious misconduct and willful breach of trust, and it pointed to the charges of falsification of company documents, stealing and other forms of dishonesty, and commission of a crime within company premises. It invoked Article 282 and contended that, if sufficiently proven, the acts would constitute just causes for termination under the relevant paragraphs of that provision.

Labor Arbiter and NLRC Factual Findings as Reflected in the Decision

The Court treated the core controversy as whether NLRC committed grave abuse of discretion amounting to lack of jurisdiction in affirming the labor arbiter’s finding of illegal dismissal. The labor arbiter’s appreciation of evidence, as described in the Court’s narrative, was grounded on the view that petitioner failed to establish that private respondent himself committed the acts constituting the charged causes of dismissal.

On the alleged falsification of company documents regarding Bonita Store, the labor arbiter found no falsification by private respondent because the invoice was signed by private respondent’s salesman. The labor arbiter characterized private respondent’s role as one of sanctioning a trade development plan initiated by the salesman, rather than as the perpetrator of the document’s falsehood.

On the alleged retrieval and lending of loaned empties from Marcela Cabanatan, the labor arbiter similarly noted that the lending practice was proposed and undertaken by private respondent’s salesman. It also found that the empties were eventually returned to Cabanatan, and that petitioner did not suffer loss or damage. The labor arbiter viewed private respondent’s fault as no more than approval of the salesman’s proposal, which did not readily qualify as stealing or dishonesty under the standards applied.

On the complimentary products allegedly given to Elisa Anosa’s store, the labor arbiter considered private respondent’s explanation that he might have used “store” in writing when the intended reference was “canteen.” It further noted that the deal was affirmed as received by Anosa herself, supporting the view that the transaction did not involve the kind of unlawful act petitioner attributed to it.

Finally, on the alleged threats and foul language, the labor arbiter viewed the conduct with “reasonable leniency” due to the emotionally charged setting in which private respondent believed his career was at stake. It also considered that the person allegedly threatened did not act against private respondent, and it took into account the financial hardship experienced by private respondent’s family at the time.

Scope of Certiorari Under Rule 65 and Deference to Labor Agencies

The Court emphasized the limited scope of review in a certiorari proceeding under Rule 65. It reiterated that whether an employee’s dismissal was just and valid involved factual questions that belonged to the statutory competence of labor arbiters and the NLRC. It held that factual findings by the labor arbiter, when affirmed by the NLRC, are accorded respect and finality when supported by substantial evidence and devoid of unfairness or arbitrariness. The Court also stressed that certiorari under Rule 65 does not authorize it to re-examine conflicting evidence, re-evaluate witness credibility, or substitute its own factual findings for those of the administrative agencies. It further noted that even if an error of judgment existed, that would not fall within the ambit of certior

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