Case Summary (G.R. No. 255864)
Key Dates and Procedural Milestones
Employment commencement: November 17, 1997. Incident and initial detention/preventive suspension: March 26–27, 2015 (detained five days; preventive suspension initially 30 days, extended another 30 days). Notice to Explain: March 27, 2015. Administrative hearing: April 27, 2015. Notice of Termination: May 14, 2015. Compromise agreement between parties: July 15, 2016. Criminal case dismissal: August 23, 2016. Labor Arbiter decision dismissing illegal dismissal complaint (but awarding small monetary balance): September 29, 2017. NLRC decision upholding LA: December 29, 2017. CA decision finding illegal dismissal and awarding separation pay and backwages: September 15, 2020 (reconsideration denied February 8, 2021). Supreme Court review followed.
Central Facts
Respondent went to the company parking lot on March 26, 2015 to clean his motorcycle seat using company-provided ethyl alcohol. He placed the bottle in his bag for inspection before leaving. A security guard noticed a bottle during inspection; respondent panicked and discarded the bottle before the guard could retrieve it. The guard recovered the bottle, which contained company-owned ethyl alcohol valued at P60.00. Respondent was taken for police investigation, criminally charged with qualified theft, detained five days, and placed under preventive suspension. URC issued a Notice to Explain; respondent submitted a written explanation to the union but URC initially refused to accept it; he admitted taking the bottle in an administrative hearing but denied stealing it. URC terminated his employment on May 14, 2015. The parties later executed a compromise agreement in July 2016 which waived claims related to the criminal charge; URC withdrew the criminal case and the criminal action was dismissed in August 2016. Respondent filed an illegal dismissal complaint, which the LA dismissed; NLRC affirmed; CA reversed and found illegal dismissal; matter brought to the Supreme Court.
Issues Presented
- Whether respondent’s dismissal was valid under Article 297 [282] of the Labor Code for serious misconduct or willful breach of trust. 2. Whether the compromise agreement precluded respondent’s labor claim. 3. Whether reinstatement, separation pay, backwages, and attorney’s fees are proper remedies.
Applicable Law and Constitutional Basis
Primary statutory provision applied: Article 297 [282] of the Labor Code (grounds for termination: serious misconduct, willful breach of trust, etc.). The decision is rendered under the legal framework as interpreted pursuant to the 1987 Philippine Constitution and prevailing labor jurisprudence. Controlling jurisprudential considerations cited by the Court include precedents addressing theft or unauthorized appropriation of company property and proportionality of discipline: Philippine Airlines (PAL), Firestone, Gelmart, Caltex, Keihin, Holcim, Reno Foods / NLM, among others. The Court applied established factors for assessing when theft warrants dismissal: period of employment/disciplinary record, value of property involved, cost/damage to employer, effect on employer’s operations, and employee’s position of trust.
Legal Standards and Precedent Application
To justify dismissal for misconduct, the Court reiterated that (a) the misconduct must be serious, (b) it must relate to job performance showing unfitness to continue employment, and (c) it must be performed with wrongful intent. For loss of trust to constitute just cause, the employee must occupy a position of trust and confidence and commit an act justifying such loss. The Court reviewed precedent where minimal-value appropriation with long service and no demonstrable operational prejudice resulted in mitigation of penalty (PAL, Gelmart, Caltex, Holcim), and contrasted these with cases sustaining dismissal where the employee’s short service, company context of repeated thefts, or the employee’s position justified a harsh response (Keihin, Firestone).
Court’s Analysis Applying the Factors
The Court found the following relevant facts on the established factors: respondent had an 18-year unblemished employment record; the ethyl alcohol bottle’s value was minimal (P60.00); the bottle was recovered promptly (no demonstrable loss or damage); URC did not show retention of respondent would prejudice company viability or be patently inimical to its interests; respondent did not occupy a position of trust and confidence. Given these elements, the Court concluded that the penalty of dismissal was disproportionate to the misconduct and that preventive suspension would have been a sufficient penalty. The Court also explained that the compromise agreement executed by the parties waived claims arising from the criminal charge but did not bar a separate determination under the Labor Code as to whether the act amounted to a just cause for dismissal; thus the waiver did not preclude the labor claim.
Conclusions on Validity of Dismissal and Liability
The Court concluded that respondent’s act did not constitute serious misconduct or willful breach of trust warranting dismissal under Article 297 [282] of the Labor Code, and therefore his termination was illegal. This conclusion was grounded on the totality of circumstances: long, clean service; minimal value and recovery of the property; lack of proof of operational pre
...continue readingCase Syllabus (G.R. No. 255864)
Case Caption and Decision Reference
- Second Division, G.R. No. 255864, decided July 06, 2022.
- Decision penned by Justice M. Lopez.
- Petition for Review on Certiorari by Universal Robina Corporation (URC) assailing the Court of Appeals (CA) Decision dated September 15, 2020 and Resolution dated February 8, 2021 in CA-G.R. SP No. 155421.
- CA had reversed the National Labor Relations Commission (NLRC) Decision dated December 29, 2017 and NLRC Resolution dated January 31, 2018 (NLRC LAC No. 12-003716-17 / NLRC NCR Case No. 05-07755-17), which had found respondent Roberto De Guzman Maglalang’s dismissal valid.
Facts of the Case
- Roberto began employment with URC as a machine operator on November 17, 1997.
- On March 26, 2015, Roberto went to the company parking lot to clean his motorcycle seat using ethyl alcohol provided by the company for employees’ use within company premises.
- After cleaning, Roberto submitted a bag for inspection before leaving; a security guard noticed a bottle in the bag.
- Roberto realized the alcohol remained in his bag, panicked, and threw the bottle away before the guard could retrieve it.
- The security guard recovered the bottle and found it contained company ethyl alcohol.
- Roberto was taken to the police station, detained for five days, and criminally charged with qualified theft; he was placed under preventive suspension for 30 days, which was extended for another 30 days.
- On March 27, 2015 URC issued a Notice to Explain, giving Roberto five days to submit a written explanation.
- Roberto submitted a written explanation to the union, but URC allegedly refused to accept it; Roberto sought union assistance for reinstatement without success.
- URC contended Roberto failed to submit the explanation and gave him another opportunity to present his side.
- At an administrative hearing on April 27, 2015, Roberto admitted taking the bottle but denied stealing it.
- URC issued a Notice of Termination on May 14, 2015.
- During the pendency of the criminal case, URC received various apology letters and pleas for withdrawal of the criminal case and for Roberto’s reinstatement.
- On July 15, 2016, the parties entered into a compromise agreement in which they agreed to waive any and all claims or causes of action that they may have against one another relative to the crime of theft, in view of URC’s withdrawal of the criminal case. URC nevertheless denied Roberto’s reinstatement and payment of money claims.
- The criminal case against Roberto was dismissed on August 23, 2016.
- Roberto filed a complaint for illegal dismissal.
- The Labor Arbiter (LA) dismissed the illegal dismissal complaint for lack of merit on September 29, 2017, finding Roberto guilty of serious misconduct for theft of company property, but ordered URC to pay Roberto P12,939.81 representing the balance of his money claims after deducting government loan obligations.
- The NLRC, in a Decision dated December 29, 2017, upheld the LA’s finding that Roberto was validly dismissed for serious misconduct. Reconsideration was denied January 31, 2018.
- Roberto filed a petition for certiorari with the CA. On September 15, 2020, the CA found Roberto to have been illegally dismissed, classifying his misconduct as simple rather than serious, awarding separation pay in lieu of reinstatement, backwages, and attorney’s fees (10% of the total monetary award), with legal interest at 6% from finality.
- URC’s motion for reconsideration before the CA was denied in a February 8, 2021 Resolution.
- URC filed the present petition to the Supreme Court.
Issues Presented to the Court
- Whether the dismissal of Roberto constituted a valid dismissal for serious misconduct or willful breach of trust under Article 297 [282] of the Labor Code.
- Whether the minimal value of the recovered company property (ethyl alcohol valued at P60.00), its timely recovery, and Roberto’s length of service (18 years) affect the gravity of the misconduct.
- Whether Roberto occupied a position of trust and confidence sufficient to support dismissal for loss of trust.
- Whether the compromise agreement bars Roberto from pursuing his labor claim for illegal dismissal.
- Whether reinstatement was feasible or whether separation pay in lieu of reinstatement was proper.
- Whether backwages and attorney’s fees were properly awarded given the circumstances and URC’s alleged good faith.
Parties’ Contentions
- URC’s contentions:
- Roberto was validly dismissed because theft of company property constitutes serious misconduct under the company Code of Discipline (Offenses Subject to Disciplinary Action) and under the Labor Code.
- The minimal value of the item, length of service, or recovery of the property do not diminish the gravity of the offense.
- Roberto’s conduct showed inexcusable irresponsibility, depravity, scorn for disciplinary rules, damage to URC’s interests, and a willful breach of trust.
- The compromise agreement bars Roberto from filing any claim arising from his act of theft; therefore, he is not entitled to separation pay, backwages, or attorney’s fees.
- Roberto’s contentions:
- The misconduct was not serious because the item’s value was only P60.00 and the company recovered it.
- He did not occupy a position of trust and confidence.
- The compromise agreement pertains only to claims arising from the criminal act of theft and does not preclude pursuing employment-related remedies; thus the labor claim for illegal dismissal remains viable.
- He was illegally dismissed and entitled to his money claims.
Relevant Statutory Provision and Legal Standards Cited
- Article 297 [282] of the Labor Code (Termination by Employer) enumerating just causes for dismissal, including:
- (a) Serious miscon