On October 27, 1983, an audit team from the Manila Office arrived in Davao and
FIRST DIVISION
[G.R. No. 74762 : December 10, 1990.]
192 SCRA 191
COMMERCIAL MOTORS CORPORATION, Petitioner, vs. COMMISSIONERS,
SECOND DIVISION, NATIONAL LABOR RELATIONS COMMISSION, and
PEDRO UMLAS, Respondents.
DECISION
NARVASA, C.J.:
This special civil action of Certiorari treats of a decision of the National Labor
Relations Commission dated April 7, 1986, declaring illegal the dismissal of
Pedro Umlas from employment by the Commercial Motors Corporation
(hereafter, simply CMC), and directing Umlas' reinstatement to his former
position without loss of seniority rights and benefits with full back wages
computed from the time of dismissal on November 16, 1983 until actually
reinstated.
CMC is engaged in the sale, marketing and distribution of Mercedes Benz vehicles
and spare parts, as well as in the servicing, repair and maintenance of said
vehicles. It has branches in various parts of the country, including one in Davao.
1 Pedro Umlas had been working with CMC since May, 1973, first as Spare Parts
Checker at the Manila Office; later, as Warehouse-in-Charge in the Davao Branch;
and still later, Spare Parts Supervisor in the same Branch. 2
Sometime in September, 1983, Umlas was required by his superiors to attend a
seminar at the Manila Office, to be held from September 24, to October 3, 1983.
Before leaving, and on instructions of Nestor Santos, the Manager of the Davao
Branch, Umlas gave the keys of the warehouse to Rosalio Lacaba, the Spare Parts
Counter Salesman. 3
Apparently Branch Manager Nestor Santos learned afterwards of some
irregularities in the Spare Parts Department. After preliminary verification, he
asked Umlas to make an initial listing of missing parts, at the same time reporting
the matter to the Head Office. Umlas failed to submit any list, so Santos called him
and asked him directly about the reportedly missing spare parts. Thereafter,
Santos instructed Umlas to make a report directly to the Manila Office, which the
latter did, on October 22, 1983. 4
1
proceeded to conduct an audit and physical inventory of spare parts in the
Branch. Branch Manager Santos received information that Umlas not only
refused to cooperate with the audit team, as instructed, but attempted to delay,
disrupt and confuse the auditors. 5 Santos then issued an inter-office
memorandum stating the following, among others: 6
"x x x
Please be informed further that no local Davao spare parts personnel will
participate in the audit. Davao personnel will, however, continue with the normal
activities of selling, posting, recording, picking and etc. Davao personnel
therefore should not interfere in any way with the audit team assignment/job
unless properly requested."
The audit team discovered that spare parts were indeed missing or otherwise
unaccounted for with a total value of P244,825.59. This finding was set out in an
Affidavit of Loss executed on December 7, 1983 by Branch Manager Nestor
Santos. 7
An investigation on the same matter of missing spare parts was also conducted
among the employees. One of them, Raul Morandante, the Service Counter
Requisitionist of the Davao Branch, gave a sworn statement on November 3,
1983 setting out the following: 8
1) on October 12, 1983, he saw Rosalio Lacaba, the Spare Parts Counter
Salesman, 9 bring out a sealed carton (cardboard box) which he believed to
contain a Mercedes Benz drive-shaft; Lacaba placed it in his jeep, parked inside
the CMC compound;
2) to confirm his suspicion, Morandante made a check of spare parts in the
warehouse the following day and then and there discovered that several spare
parts were actually missing;
3) he reported this to his superior, who happened to be Pedro Umlas; the latter
told him he would conduct his own investigation.
On November 8, 1983, five days later, Morandante executed a supplemental
statement, 10 additionally declaring the following:
1) Umlas had told him not to inform Branch Manager Nestor Santos about the
missing spare parts; and
2) on or about October 17, 1983, after Umlas had talked privately with Lacaba in
the spare parts office, Umlas had instructed him (Morandante) to break the back
door so as to give the impression that burglars had broken into the building and
taken the missing spare parts, but Morandante had refused to do so.
On November 16, 1983, Umlas was served with a notice of preventive suspension
and termination of his services, to take effect on December 16, 1983 on grounds
of serious misconduct and dishonesty in the performance of duties, and fraud.
and wilful breach and/or loss of trust as Branch Spare Parts Supervisor. The
notice reserved to management all actions for restitution and recovery of its
losses. 11
On December 14, 1983, CMC filed a criminal complaint with the Office of the
Fiscal of Davao City charging Umlas, Lacaba, and a certain Rosalio Yap with
qualified theft and violation of the Anti-Fencing Law (PD. 1612). The preliminary
investigation resulted in the dropping of all the charges against Umlas on the
ground of insufficiency of evidence, on the one hand and the filing of
corresponding indictments against Lacaba and Yap, on the other. 12 The
dismissal of the accusations against Umlas was sustained after a reinvestigation
undertaken at CMC's instance. A petition by CMC to have the resolutions of
dismissal reviewed by the Ministry of Justice was rejected because filed out of
time. 13
On January 3, 1984, Umlas filed with the Regional Arbitration Branch at Davao
City a complaint against CMC for illegal dismissal, illegal suspension, and for
recovery of back wages and damages. After due proceedings, the Labor Arbiter
found that he had been legally and properly dismissed from employment. The
Arbiter thus dismissed Umlas' complaint but directed the payment to him of "his
13th month pay (P1,715.00) and service incentive leave pay (P522.80)" in the
total amount of P2,237.80. 14
On appeal seasonably taken by Umlas, however, the National Labor Relations
Commission (Second Division) reversed the judgment of the Arbiter insofar as
the latter had ruled Umlas' separation legal. The Commission's decision rendered
on April 7, 1986 contained the following dispositive portion, to wit:chanrobles
virtual law library
"WHEREFORE, in view of the foregoing, respondent is hereby ordered to
immediately reinstate complainant to his former position without loss of
seniority rights and benefits, with full backwages computed from the time he was
illegally terminated/suspended on November 16, 1983 until actually reinstated.
The claim for moral and exemplary damages . . . (is) denied for want of proof and
arguments.
Except as herein MODIFIED, the appealed Decision is affirmed in all other
dispositions."
In the action at bar CMC would have this Court annul the NLRC decision of April
7, 1986, contending that the NLRC had gravely abused its discretion when it
reversed the Labor Arbiter's judgment "merely because the criminal charges
filed against . . . (Umlas) were dropped by the Office of the City Fiscal." 15
2
The contention is untenable. The Commission's reversal of the Arbiter's decision
was not in truth grounded on the dismissal by the public prosecutor of the
criminal charges proferred by CMC against Umlas. It was primarily premised on
the failure of CMC to establish by adequate evidence its avowed ground for the
termination of Umlas' services: loss of confidence. More specifically, like the City
Fiscal of Davao, the Commission found the evidence given by Morandante, on
which the Labor Arbiter appears to have relied quite heavily, to be unworthy of
credit in the light of all the attendant circumstances.
Now, there is no gainsaying that loss of confidence is a recognized ground for the
discharge of an employee from employment. But such a ground must be founded
from facts established by substantial evidence. And the burden of establishing
such facts as reasonably cause loss of confidence in an employee — such facts as
reasonably generate belief by the employer that the employee is connected with
some misconduct and the nature of his participation therein is such as to render
him unworthy of the trust and confidence demanded of his position — is on the
employer. 16 The fact that the employee has been absolved in a criminal
prosecution involving said misconduct does not preclude the employer from
attempting to prove the same before the labor arbiter or the latter from accepting
that evidence as sufficient foundation for a finding of lawful termination of
employment. Withal, the employer's evidence, although not required to be of
such degree as is required in criminal cases, i.e., proof beyond reasonable doubt,
must be substantial, must clearly and convincingly establish the facts upon which
loss of confidence in the employee may fairly be made to rest. 17
The NLRC analyzed the employer's proofs and came to the reasoned conclusion
that they did not adequately demonstrate Umlas' connection with the loss of
spare parts. The petitioner tries hard to convince the Court of the faultiness of
the Commission's appreciation of the proofs. The question, however, is not
whether the Commission erred in its assessment of the evidence, but whether
that error, if error it be, was one that may be characterized as whimsical,
capricious, or arbitrary. Whatever other things may be said about the
Commission's disputed assessment of the evidence, it cannot be said to have
been done whimsically, capriciously or arbitrarily, a proposition that must
necessarily cause dismissal of the action at bar, for failure of the petitioner to
satisfactorily show any grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the respondent Commission, as required by Rule 65 of
the Rules of Court on which said petitioner's plea for review is founded.
The record shows, moreover, that Umlas' separation from employment was
effected without according him due process. He was not given notice of the
charges against him and an opportunity to be heard thereon. The
pronouncement by the NLRC of the illegality of Umlas's dismissal must thus be
sustained.:-cralaw
It would seem, however, that the circumstances of this case render inapproriate THIRD DIVISION
Umlas' reinstatement to his former position, as an item of relief. A more equitable
disposition is that which this Court has more than once made in other cases of G.R. No. 75662 September 15, 1989
the same nature: the award, in lieu of reinstatement, of separation pay at the rate
of one month's salary for every year of service, "so that . . . (the employee) can be
spared the agony of having to work anew with . . . (the employer) under an MERCURY DRUG CORPORATION, petitioner
atmosphere of antipathy and antagonism, and the . . . (latter) does not have to vs.
endure the continued service of . . . (the former) in whom it has lost NATIONAL LABOR RELATIONS COMMISSION, NLRC SHERIFF and CESAR E.
confidence." 18 LADISLA, respondents.

WHEREFORE, the Decision of the National Labor Relations Commission dated Veronica G. de Vera for petitioner.
April 7, 1986 in NLRC Case No. 1356-LR-XI-84 is AFFIRMED as regards its basic
findings and conclusions, but MODIFIED as to its dispositive part in that the
requirement for the reinstatement of private respondent Pedro Umlas is David B. Agoncillo for private respondent.
DELETED, and petitioner Commercial Motors Corporation is hereby, ORDERED:
(1) to give separation pay to said private respondent Pedro Umlas at the rate of
one month's salary for every year of service; (2) to pay said Pedro Umlas back
wages for three (3) years without qualification or deduction computed from the FERNAN, C.J.:
time of his illegal suspension and dismissal from employment; and (3) to pay
Pedro Umlas the additional amount of P2,237.80, representing the aggregate of
his 13th month pay in the sum of P1,715.00 and service incentive leave pay in Petitioner assails in this petition for review on certiorari the Resolution dated
the sum of P522.80, with interest thereon at the legal rate from the filing of the July 24, 1986 of the National Labor Relations Commission in NLRC Case No. RB-
complaint. Costs against petitioner.: nad IV-19301-78-T denying petitioner's motion for reconsideration of its decision
dated April 30, 1986 which reversed the decision of Labor Arbiter Ceferina J.
SO ORDERED. Diosana and ordered the reinstatement of private respondent Cesar E. Ladisla to
his former position with full backwages.

Records show that private respondent Cesar E. Ladisla was employed by

petitioner Mercury Drug Corporation as a Stock Analyst at its Claro M. Recto
Branch. He had been with the company for two years and nine months when on
August 15, 1977 he was apprehended by representatives of Mercury Drug while
in the act of pilfering company property consisting of three (3) bottles of
Persantin and one (1) bottle of Valoron at 100 tablets per bottle with a total value
of P272.00. He admitted his guilt to the investigating representatives of
petitioner company and executed a handwritten admission. Said admission was
repeated verbally at the police station before the arresting officer as shown in
the Booking Sheet and Arrest Report which was signed and authenticated by
Ladisla. 1 Thus, on August 19, 1977, petitioner, while simultaneously placing
private respondent on preventive suspension, filed before the Department of
Labor an application for the termination of private respondent's employment on
grounds of dishonesty and breach of trust.

Private respondent opposed the aforesaid application for clearance to terminate

his services alleging among others, that his suspension and proposed dismissal

3
were unfounded and baseless being premised on the machinations and
incriminatory acts of Ms. Leonora Suarez and Edgardo Imperial, Manager and
Retail Supervisor, respectively, of petitioner's Claro M. Recto Branch; and that he
was not given the opportunity to be heard nor allowed to explain his side before
he was summarily suspended.
The parties were then required by the Arbitration Branch of the Department of
Labor to file their respective position papers. While the case was being heard by
Labor Arbiter Ceferina J. Diosana petitioner filed a criminal complaint for
attempted qualified theft against private respondent before the Fiscal's Office of
Manila but this was dismissed by the court before the arraignment of the
accused. However, the case was refiled and docketed as Criminal Case No. 43096
before Judge Pedro A. Ramirez of the then Court of First Instance, subsequently
the Regional Trial Court of Manila, Branch XXX.
In a decision dated November 8, 1979. 2 Labor Arbiter Ceferina J. Diosana
sustained the validity of private respondent's dismissal and granted petitioner's
application for clearance to terminate, the services of the former. Private
respondent appealed his aforesaid dismissal to the National Labor Relations
Commission. Pending resolution of the appeal, herein petitioner filed a
Manifestation with said Commission notifying the latter of the ongoing trial in
Criminal Case No. 43096 against private respondent. On September 15, 1983,
judgment was rendered in Criminal Case No. 43096, finding private respondent
accused guilty of the crime of simple theft. 3 No appeal was taken from the
decision in the subject criminal case, private respondent having availed himself
of the benefits of the Probation Law. He was eventually discharged from
probation on December 27, 1984, after complying with the terms and conditions
thereof. 4
On April 30, 1986, public respondent National Labor Relations Commission
reversed the decision of the Labor Arbiter because it found no substantial
evidence establishing the charge against private respondent Ladisla stating thus:
WHEREFORE, the Decision appealed from is hereby set aside and a new one
entered ordering respondent to immediately reinstate him in (sic) his former
position with full back wages.
SO ORDERED. 5 employment for "fraud or willful breach by the employee of the trust reposed in
Petitioner filed a motion for reconsideration of the aforementioned decision,
which was denied by public respondent Commission in its resolution dated July
24, 1986. 6 Hence, this petition assailing the latter's reversal of the labor arbiter's
4
decision and its order for the reinstatement with full back wages of private
respondent.
Petitioner submits that it was serious legal error on the part of public respondent
to order the reinstatement of private respondent who was convicted of the crime
of simple theft by Judge Pedro Ramirez in Criminal Case No. 43096 filed by
petitioner against said private respondent-employee involving the same facts
obtaining in the present case for termination. On the other hand, private
respondent maintains that he was a victim of revenge and incriminatory
machinations as the charge of qualified theft of company property was a frame-
up.
We hold that public respondent National Labor Relations Commission
committed a grave abuse of discretion amounting to lack of jurisdiction in finding
no substantial evidence to sustain the charge against private respondent. This
conclusion is in complete and utter disregard of the Regional Trial Court's
conviction of private respondent for the crime of simple theft which decision was
rendered prior to its own assailed decision. It must be remembered that
proceedings in criminal cases such as that held in the subject criminal case
require proof beyond reasonable doubt to establish the guilt of the accused and
findings of fact of the trial court on this matter are generally accorded great
weight by appellate courts most especially where no appeal had been filed
thereafter, thus rendering the said findings final. As mentioned earlier, private
respondent did not appeal from the decision of the lower court but instead
availed himself of the benefits of the probation law which was correspondingly
granted by the Regional Trial Court.
Dismissal of a dishonest employee is to the best interest not only of management
but also of labor. As a measure of self-protection against acts inimical to its
interest, a company has the right to dismiss its erring employees. An employer
cannot be compelled to continue in employment an employee guilty of acts
inimical to its interest, justifying loss of confidence in him. The law does not
impose unjust situations on either labor or management. 7 We therefore find
justification in the termination of private respondent Cesar E. Ladisla's
employment by petitioner Mercury Drug Corporation.
Under Article 282(c) of the Labor Code, an employer may terminate an
him by his employer or his duly authorized representative." Loss of confidence
is established as a valid ground for the dismissal of an employee. The law does
not require proof beyond reasonable doubt of the employee's misconduct to
invoke such a justification. It is sufficient that there is some basis for the loss of
trust or that the employer has reasonable grounds to believe that the employee
is responsible for the misconduct and his participation therein renders him WHEREFORE, the assailed resolution of the National Labor Relations
unworthy of the trust and confidence demanded of his position. 8 Commission is reversed and set aside and the Labor Arbiter's decision of
November 8, 1979 dismissing Cesar E. Ladisla as petitioner's stock analyst is
Private respondent's admission of his guilt as earlier stated, his subsequent hereby reinstated. No costs.
conviction in Criminal Case No. 43096 and his acceptance of the same as implied
in the absence of an appeal therefrom and his subsequent application for SO ORDERED.
probation established beyond reasonable doubt his guilt for the crime of simple
theft. It was this same act which gave rise to his conviction by the trial court that
was the basis for the termination of his employment by petitioner.

We have held that the eventual conviction of the employee who is prosecuted for
his misconduct is not indispensable to warrant his dismissal by his
employer. 9 More specifically, an employee who has been exonerated from a
criminal charge of theft of gasoline on the basis of technicality may still be
dismissed from employment if the employer has ample reason to mistrust
him. 10 If acquittal from the criminal charge does not negate the existence of a
ground for loss of trust and confidence, with more reason should conviction for
such criminal charge fortify said mistrust.

Anent private respondent's claim of summary suspension without being given

the opportunity to be heard, the Court takes note that, in addition to the fact that
his suspension was merely preventive pending approval by the Department of
Labor of its application for clearance to terminate the services of private
respondent, the latter was given the chance to defend himself in several
instances: at the Police Precinct No. III, Western Police District, Metro Manila
where he was brought for investigation or questioning immediately after the
occurrence of the alleged pilferage of medicines and where he was given the
opportunity to state his defenses, and thereafter, before the arbitration branch
of the Department of Labor where he was required and did submit his position
paper.

The law in protecting the rights of the laborer, authorizes neither oppression nor
self-destruction of the employer. 11While the Constitution is committed to the
policy of social justice and the protection of the working class, it should not be
supposed that every labor dispute will be automatically decided in favor of labor.
Management also has its own rights, which, as such, are entitled to respect and
enforcement in the interest of simple fair play. Out of its concern for those with
less privileges in life, the Supreme Court has inclined more often than not toward
the worker and upheld his cause in his conflicts with the employer. Such
favoritism, however, has not blinded the Court to the rule that justice is in every
case for the deserving, to be dispensed in the light of the established facts and
applicable law and doctrine . 12

5
DIVISION
[ GR No. 78491, Mar 16, 1989 ]
STARLITE PLASTIC INDUSTRIAL CORPORATION v. NLRC +
DECISION
253 Phil. 307
CORTES, J.:
Petitioner Starlite Plastic Industrial Corporation (STARLITE) seeks to set aside
the 18 February 1987 decision of the National Labor Relations Commission
(NLRC) ordering the reinstatement of private respondent Edgar Gomez (GOMEZ)
with full backwages, and its Resolution dated 21 April 1987 denying petitioner's
motion for reconsideration.
The antecedents of the case are as follows:
Private respondent GOMEZ was employed as a factory worker by STARLITE
sometime in March 1981. On 22 June 1984, STARLITE dismissed him on the
ground that he was caught attempting to steal one ballast costing P80.00.
STARLITE reported the matter to the police on 19 July 1984, after grievance
meetings failed to resolve the controversy. A criminal complaint was filed against
GOMEZ, but the investigating fiscal dismissed the same saying that STARLITE
failed to establish a prima facie case against GOMEZ. On 13 August 1983, private
respondent GOMEZ filed a complaint for illegal dismissal against STARLITE.
After the parties submitted their respective position papers, the Labor Arbiter
rendered his decision on 15 January 1985 dismissing the complaint for lack of
merit GOMEZ appealed the decision to the public respondent NLRC which in a
decision dated 18 February 1987 reversed the ruling of the Labor Arbiter.
In contending that the decision of the public respondent NLRC was rendered in
grave abuse of discretion petitioner argues that the act of dishonesty of GOMEZ
led petitioner to lose its trust and confidence in him and is more than sufficient
to justify his dismissal.
In his position paper, GOMEZ averred that he started working as laborer in
petitioner's factory sometime in March 1981. In the course of his employment,
he joined and later became a board member of the labor union KAMPIL, and
participated in a strike against STARLITE. On 22 June 1984, STARLITE
summarily dismissed him on the claim of having attempted to steal one ballast
costing P80.00.
STARLITE's version of the events which led it to dismiss GOMEZ, is as follows:
6
. . . That on 22 June 1984, at about 12:43 p.m. complainant was about to go out of
the factory; that he was about 7 to 12 meters from the gate where the Security
Guard was posted when he suddenly turned back and proceeded to the back of
the office. He took something in the front part of his pants and place (sic) the
same in the pile of woods (sic). These unusual incident (sic) was witnessed by
the security guard because he was alone. Being suspicious, the guard could have
followed him and look (sic) at what he put in the pile of woods (sic) but he was
not able to do so as he was talking with an office secretary who instructed him to
put off the switch of the water pump. That on the same time and date. Bonnie
Alvarez, a Delivery Checker was at the toilet and actually saw Edgar Gomez put
in the pile of woods (sic) a ballast. That he immediately reported this matter to
Mr. Tan Chi Thian Jr. the Production Supervisor Manager and he was instructed
to get the said ballast and bring the same to the office. Immediately Edgar Gomez
was called to the office and was asked to explain why he took the said ballast.
When he replied that he does (sic) not know anything about the said ballast, Mr.
Tan asked him to wait for a while and asked one of the office secretary (sic) to
prepare a memorandum for Edgar Gomez to answer. That complainant refused
to acknowledge receipt of the memorandum and asked Mr. Tan if it would be
possible to call Mr. Arsenio Campos, Union Vice-President and Oscar Raymundo
another Union Officer. When the two Union Officers were appraised of the
incident, they talked with the complainant and later told Mr. Tan that Edgar
Gomez could not accept the said memorandum. At this juncture, Mr. Tan told
them that he would just refer the matter to the police authority for proper
disposition. When the two Union Officers heard this, they requested Mr. Tan that
they be allowed to call up Mr. Reynaldo Capa, President of the KAMPIL. the
Federation wherein the local union was affiliated. Mr. Capa of the KAMPIL
requested Mr. Tan not to take the matter to the police and he will just instruct
Edgar Gomez to receive the memorandum and they will just submit the
corresponding explanation. Complainant submitted his explanation on June 25,
1984, vehemently denying the imputed charge against him. After a perusal of the
incident, the management deemed it proper to place complainant Edgar Gomez
under preventive suspension pending the filing of the corresponding criminal
charge against him. That the criminal charge was not immediately filed because
of the request of the President of the KAMPIL. In the two grievance meetings
between the Union and Management, this case is (sic) always included in the
agenda. In the meeting/conference at the National Capital Region in the office of
Conciliator Apron Mangabat, this matter was also taken up but did not reach any
point of settlement. Finally, on July 19, 1984, the company deemed it proper to
report the matter to the police station. [Labor Arbiter Decision, pp. 1-3; Rollo, pp.
17-19]
GOMEZ, on the other hand, claimed that the theft charge was a "frame up" as
shown by the resolution of the investigating fiscal dated 31 August 1984,
dismissing the criminal complaint filed by STARLITE. as it failed to present the
quantum of proof to establish a prima faciecase against GOMEZ. The resolution
is attached as Annex "A" of GOMEZ's position paper.
GOMEZ's version of the incident leading to his dismissal as culled from his reply
to the memorandum given to him the day of the incident, attached as Annex "1"
of his position paper, is as follows:
At 12:05 p.m. he went out to buy viand as instructed by a certain Nellie. He
arrived five minutes later and soon after, took his own lunch. At around 12:30
p.m. he went out of the compound to buy candy and three minutes later, he went
with Rando to the parking area to rest and chat. At around 12:45 p.m., a certain
Elmer joined them and they conversed while waiting for the company bell to ring
[Record p. 15].
GOMEZ denied the accusation against him arguing that if he was indeed seen
attempting to take a ballast, why didn't the security guard or Alvarez apprehend
him immediately. He admitted going to Rando Tamondong's department at
around 11:55 a.m. to use the compressor to clean himself of sawdust, but claimed
that he stayed there only for a while and then went back to his post, without
taking anything.
This version of GOMEZ was corroborated by Rando Tamondong who, in a
statement submitted to the investigating fiscal, attached as Annex "3" of GOMEZ's
position paper, said that he was not aware of any missing ballast in his
department and that he had no knowledge of whether GOMEZ took anything
from his department. Arsenio Biong also executed an affidavit stating that he saw
Bonifacio Alvarez, Assistant Production Manager, personally bring out one
canopy containing one ballast from the painter's room and that he was surprised
to learn that GOMEZ was accused of stealing the ballast that Mr. Alvarez had
taken [Annex "4", Record, p. 18].
STARLITE filed a supplemental position paper disputing the resolution of the
investigating fiscal, contending that it never received any subpoena or summons
nor was there any hearing called for or conducted regarding the case before the
investigating fiscal. Petitioner also attached the recanting affidavits of Rando
Tamondong and Arsenio Biong, executed about three months after they made
their previous statements [Record, pp. 32-34].
The Labor Arbiter then rendered his decision dated 15 January 1985, dismissing
the complaint for lack of merit, finding that, ''except for his flat denial that he did
not take the ballast, private respondent GOMEZ filed to present an iota of
evidence to prove his innocence" [Rollo, p. 20].
Private respondent GOMEZ appealed the decision to public respondent NLRC
which, on 18 February 1987, reversed the ruling of the Labor Arbiter, holding
7
that the facts on record did not support the Labor Arbiter's conclusion. In its
decision the NLRC stated thus:
We see no reason why the Labor Arbiter should disregard the findings of the City
Fiscal as they are entitled to great weight, and We quote:
Tan Chi Thian Jr., Production Manager of the Starlite Plastics and Industrial
Corporation, avers that on June 22, 1984, he received a report that at about 12:40
p.m. of the same date, respondent Edgar Gomez, a factory helper in the said firm
for about three years, was seen inserting an OSRAM ballast valued at P80.00 into
a pile of wood near the gate of the said firm. A memorandum was later sent to
said respondent to shed light on the matter.
Respondent Gomez countered that the charge of Attempted Qualified Theft
against him was a mere fabrication intended to justify his dismissal from the said
company because of his participation in the strike against the company by their
union of which he was a member of the .board of directors.
After carefully evaluating the evidence on record, the undersigned finds the
explanation and/or defenses interposed by respondent Gomez to be meritorious
particularly on the following points:
1. the statement of Rando Tamondong that he was not aware of any
missing ballast from his department and that he did not know whether
respondent Gomez took anything from his department.
2. the fact that he was not immediately placed under custody considering
that he was actually allegedly seen in the act of committing the crime.
3. the statement of Arsenio Biong that he saw Bonifacio Alvarez, Assistant
Production Manager of the firm, bringing out by himself one (1) canopy
containing one ballast from the painter's room. Mr. Alvarez allegedly
saw from the window of a comfort room where respondent Gomez was
inserting the missing ballast into the pile of wood.
The Labor arbiter therefore erred in finding that "complainant failed to present
an iota of evidence to prove his innocence" as there were persons who testified
in his favor and whose statements are now part of the record. Thus, complainant
presented the following arguments for the Labor Arbiter's perusal:
a. Counter-affidavit of Mr. Edgar Gomez showing that complainant did not
commit the offense of Attempted qualified theft as corroborated by Mr.
Rando Tamondong and Mr. Arsenio Biong.
 b. In the signed statement of Mr. Tamondong (Annex B-3) he exonerated
complainant thus:
'Tungkol sa tinatanong ninyo sa nawawalang ballast sa aking
departamento ay wala po akong nalalaman at tungkol naman sa tao sa
aking departamento ay dadalawa lang po kami, ako at si Mr. Elapes may
taong pumunta roon si Mr. Gomez pero wala akong alam na kinuha niya.
' with full backwages.
"c. In the affidavit executed by Mr. Biong, (Annex B-4) he has this to say:
xxx. That sometime on June 22, 1984 my co-worker Mr. Edgar Gomez at around
11:45 to 12:00 noon, came to our place at the painters room to purposely cleanse
himself of sawdust.
That immediately right after, 1 saw him went (sic) out of the room without
bringing everything (sic) from our room;
That, however, when Mr. Gomez was already out of our sight, Mr. Bonnie Alvarez
went inside and asked me what the former did inside the room: that when told
that Mr. Gomez cleaned himself of sawdust in his body, Mr. Alvarez went out
bringing along with him the canopy containing the ballast;
That I was surprised to hear after Mr. Gomez was already accused of stealing the
ballast which Mr. Alvarez had taken personally from the painter's room.
The above statement was never denied by respondent including Mr. Bonnie
Alvarez, himself."
WHEREFORE, the appealed Decision should be as it is hereby REVERSED.
Respondent is hereby ordered to immediately reinstate the complainant to his
former position without loss of seniority rights and benefits and with full
backwages from the time he was dismissed until actually reinstated.
The claim for moral damages is hereby denied for being unsupported by
evidence.
SO ORDERED.
[NLRC Decision, pp. 2-5; Rollo, pp. 12-15.]
The NLRC denied STARLITE's motion for reconsideration hence, the instant
petition for certiorari was filed on 30 May 1987, with a prayer for the issuance of
a writ of preliminary injunction or a temporary restraining order.
8
The Court issued a temporary restraining order on 10 June 1987 enjoining the
NLRC from enforcing its decision and the petition was given due course on 4
November 1987.
Petitioner mainly contends that it was justified in dismissing GOMEZ since it had
lost its trust and confidence in him for his act of attempting to steal the ballast
and public respondent NLRC therefore committed grave abuse of discretion
amounting to lack of jurisdiction when it ordered the reinstatement of GOMEZ
Petitioner argues that even if the fiscal dismissed the charges against GOMEZ,
still it has reasonable ground to believe that GOMEZ was responsible for the theft
of the ballast and that such act of dishonesty justifies his dismissal on the ground
of loss of confidence.
The Court finds petitioner's contentions unmeritorious.
At the outset, the Court finds it necessary to emphasize that contrary to the tenor
of the Labor Arbiter's decision, a dismissed employee is not required to prove his
innocence of the charges levelled against him by his employer. The Court has laid
down the rule that in termination cases, the burden of proving the just cause of
dismissing an employee rests on the employer and his failure to do so would
result in a finding that the dismissal is unjustified [Polymedic General Hospital v.
NLRC, G.R. No. 64190, January 31,1985, 134 SCRA 420; Egyptair v. NLRC, G.R. No.
63185, February 27, 1987, 148 SCRA 125 Asphalt and Cement Pavers, Inc. v.
Leogardo, G.R. No. 74563, June 20, 1988].
There is no dispute that loss of confidence, when adequately proven, constitutes
a valid ground for dismissing an employee [Manila Midtown Commercial
Corporation v. Nuwhrain, G.R. No. 57268, March 25, 1988, 159 SCRA 212] and
proof beyond reasonable doubt is not required to terminate him on this charge
[Gatmaitan v. MRR, G.R. No. L-19892, September 25, 1967, 21 SCRA 191]. It is
sufficient that there is some basis for such loss of confidence [Galsim v. PNB, G.R.
No. L-23921, August 29, 1969, 29 SCRA 293; Central Textile Mills v. NLRC, G.R. No.
50150, May 3, 1979, 90 SCRA 9] and that the employer has reasonable ground to
believe or entertain the moral conviction that the employee concerned is
responsible for the misconduct and that the nature of his participation therein
would render him absolutely unworthy of the trust and confidence demanded of
his position [Nevans v. CIR, G.R. No. L-21510, June 29, 1968, 23 SCRA 1321]. The
doctrine goes on further to include the basic rule that the conviction of an
employee in a criminal case is not indispensable to warrant his dismissal by his
employer and that the fact that a criminal complaint against the employee has
been dropped by the city fiscal is not binding and conclusive upon a labor
tribunal [Sea Land Service Inc. v. NLRC, G.R. No. 68212, May 24, 1985, 136 SCRA
544].
The Court, however, has time and again stressed that the right of an employer to
dismiss employees on the ground that it has lost its trust and confidence in him
must not be exercised arbitrarily and without just cause; that although the
dropping of a criminal prosecution for an employee's alleged misconduct does
not bar his dismissal and proof beyond reasonable doubt is not necessary to
justify the same, still the basis thereof must he clearly and convincingly
established [Acda v. Minister of Labor, G.R. No. 51607. December 15, 1982, 119
SCRA 326; Philippine Long Distance Telephone Co. v. NLRC, G.R. No. 58004, May
30, 1983, 122 SCRA 601].
Thus; the Court in General Bank and Trust Co. v. CA [G.R. No. L-42724, April 9,
1985, 135 SCRA 569] laid down the following guidelines in the applicability of
the doctrine of loss of confidence, to wit:
xxx However, loss of confidence should not be simulated. It should not be used
as a subterfuge for causes which are improper, illegal or unjustified. Loss of
confidence may not be arbitrarily asserted in the face of overwhelming evidence
to the contrary. It must be genuine, not a mere afterthought to justify earlier
action taken in bad faith. [General Bank, supra, at p. 578 cited in D, M. Consunji,
Inc. v. NLRC, G.R. No. 71459, July 30, 1986, 143 SCRA 204, 211].
Applying the foregoing legal precepts to the pertinent facts, the Court finds that
there was utter failure here to establish or substantiate the theft charge against
GOMEZ. The public respondent NLRC found, amply supported by the record, that
contrary to the Labor Arbiter's findings that GOMEZ "failed to present an iota of
evidence to prove his innocence," GOMEZ indeed presented exculpatory
evidence consisting of the statements of his co-employees Rando Tamondong
and Arsenio Biong, the former attesting that he was not aware of any missing
ballast from his department and the latter claiming that it was in fact Bonifacio
Alvarez who brought out a canopy containing a ballast, which GOMEZ was
accused of stealing. Although STARLITE subsequently submitted the recanting
affidavits of said witnesses, said recanting affidavits did not inspire belief and the
NLRC disregarded the same. The NLRC also found that the findings of the fiscal
exonerating GOMEZ from the theft charge was entitled to great weight as these
findings reveal at once that the theft charge which is the basis for the dismissal
of GOMEZ was not clearly and convincingly established by petitioner.
Moreover, the Court is guided by the well-known principle that findings of facts
of quasi-judicial agencies, like the NLRC, are generally accorded great respect
and will not be disturbed absent a showing that the findings are unsubstantiated
by evidence [St. Luke's Hospital v. NLRC G.R. Nos. 54068 & 54142, August 30,
1982. 116 SCRA 240: Manila Mandarin Employees Union v. NLRC, G.R. No. 76989,
September 29. 1987. 154 SCRA 368]. The NLRC's findings having support in the
statements of GOMEZ and his witnesses [Record, pp. 11-20.] no cogent reasons
exist for the Court to digress from the settled rule.
9
Petitioner next contends that GOMEZ submitted the alleged statements of his
witnesses when the case was already submitted to the investigating fiscal for
resolution without furnishing a copy to petitioner. Petitioner thus was not able
to rebut the same, and that in any case, these alleged witnesses cannot be
expected to tell the truth because they were the close friends of GOMEZ [Rollo. p.
7].
Petitioner's argument instead of buttressing its claim dooms it. Granting that
petitioner was not furnished a copy of the affidavits of GOMEZ's witnesses during
the proceedings before the investigating fiscal, still, as aforestated, the same
affidavits were attached with the fiscal's resolution to GOMEZ's position paper,
and STARLITE had the opportunity to assail the same, as it in fact did in its
supplemental position paper, attaching the recanting affidavits of GOMEZ's own
witnesses. STARLITE's allegation that it had no opportunity to rebut said
affidavits is thus unfounded.
Consequently, the theft charge not having been established, the dismissal of
GOMEZ on the ground of loss of trust and confidence cannot be sustained.
In view of the finding that GOMEZ was dismissed illegally, STARLITE is obligated
to reinstate GOMEZ to his former position or one reasonably equivalent thereto
without loss of seniority rights, and to pay backwages for three years, without
qualification or deduction[Mercury Drug v. CIR, G.R. No. L-23357, April 30, 1974,
56 SCRA 694; PAL, Inc. v. NLRC, G.R. No. 64809, November 29, 1983, 1 26 SCRA
223; Lepanto Consolidated Mining Co. v. Olegario, G.R No. 77437, June 23, 1988].
In the event such reinstatement is no longer feasible, or if GOMEZ decides not to
be reinstated, STARLITE shall pay him separation pay in lieu of reinstatement
such separation pay to be computed according to the formula used in the cases
of: Santos v. National Labor Relations Commission, G.R. No. 767-21, September
21,1987, 154 SCRA 116; Soriano v. National Labor Relations Commission, G.R. No.
75510, October 27, 1987, 155 SCRA 124; and. Manila Midtown Commercial
Corporation v. Nuwhrain, G.R. No. 57268, March 25, 1988, 159 SCRA 212.
Commercial Corporation v. Nuwhrain, G.R. No. 57268, March 25, 1988, 159 SCRA
212.
WHEREFORE, the petition for Certiorari is DISMISSED. The Decision of public
respondent NLRC is hereby AFFIRMED,
subject to the modification that (1) petitioner shall pay private respondent
GOMEZ three (3) years backwages without qualification and deduction and (2)
STARLITE shall reinstate GOMEZ to his former position or one reasonably
equivalent thereto or if such reinstatement is no longer feasible or should
GOMEZ not accept reinstatement, STARLITE shall pay him separation pay to be
computed as above indicated. The Temporary Restraining Order issued on 10 SECOND DIVISION
June 1987 is hereby LIFTED.
RENO FOODS, INC., and/or G.R. No. 164016
SO ORDERED. VICENTE KHU,
Petitioners, Present:

CARPIO, J., Chairperson,

- versus - BRION,
DEL CASTILLO,
ABAD, and
Nagkakaisang Lakas ng Manggagawa PEREZ, JJ.
(NLM) - KATIPUNAN on behalf of
its member, NENITA CAPOR, Promulgated:
Respondent. March 15, 2010
x-------------------------------------------------------------------x

DECISION

DEL CASTILLO, J.:

There is no legal or equitable justification for awarding financial assistance to an employee

who was dismissed for stealing company property. Social justice and equity are not
magical formulas to erase the unjust acts committed by the employee against his
employer. While compassion for the poor is desirable, it is not meant to coddle those who
are unworthy of such consideration.
This Petition for Review on Certiorari[1] assails the June 3, 2004 Decision[2] of
the Court of Appeals (CA) in CA-G.R. SP No. 76789 which denied the petition
for certiorari filed by the petitioners and affirmed the award of financial assistance to
respondent Nenita Capor.

Factual Antecedents

Petitioner Reno Foods, Inc. (Reno Foods) is a manufacturer of canned meat products of
which Vicente Khu is the president and is being sued in that
capacity. Respondent NenitaCapor (Capor) was an employee of Reno Foods until her
dismissal on October 27, 1998.

It is a standard operating procedure of petitioner-company to subject all its employees to

reasonable search of their belongings upon leaving the company premises. On October 19,
1998, the guard on duty found six Reno canned goods wrapped in nylon leggings

10
inside Capors fabric clutch bag. The only other contents of the bag were money bills and a
small plastic medicine container.
Petitioners accorded Capor several opportunities to explain her side, often with the
assistance of the union officers
of Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan. In fact, after petitioners sent a
Notice of Termination to Capor, she was given yet another opportunity for
reconsideration through a labor-management grievance conference held on November
17, 1999. Unfortunately, petitioners did not find reason to change its earlier decision to
terminate Capors employment with the company.
On December 8, 1998, petitioners filed a complaint-affidavit against Capor for qualified
theft in the Office of the City Prosecutor, Malabon-Navotas Substation. On April 5, 1999, a
Resolution[3] was issued finding probable cause for the crime charged. Consequently, an
Information was filed against Capor docketed as Criminal Case No. 207-58-MN.
Meanwhile, the Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan filed on behalf
of Capor a complaint[4] for illegal dismissal and money claims against petitioners with the
Head Arbitration Office of the National Labor Relations Commission (NLRC) for the
National Capital Region. The complaint prayed that Capor be paid her full backwages as
well as moral and exemplary damages. The complaint was docketed as NLRC NCR Case
No. 00-01-00183-99.
Ruling of the Labor Arbiter
In the proceedings before the Labor Arbiter, Capor alleged that she was unaware that her
clutch bag contained the pilfered canned products. She claimed that petitioners might
have planted the evidence against her so it could avoid payment of her retirement benefits,
as she was set to retire in about a years time.
After the submission of the parties respective position papers, the Labor Arbiter rendered
his Decision[5] dated November 16, 1999 finding Capor guilty of serious misconduct
which is a just cause for termination.
The Labor Arbiter noted that Capor was caught trying to sneak out six cans
of Reno products without authority from the company. Under Article 232 of the Labor
Code, an employer may terminate the services of an employee for just cause, such as
serious misconduct. In this case, the Labor Arbiter found that theft of company property
is tantamount to serious misconduct; as such, Capor is not entitled to reinstatement
and backwages, as well as moral and exemplary damages.
Moreover, the Labor Arbiter ruled that consistent with prevailing jurisprudence, an
employee who commits theft of company property may be validly terminated and
consequently, the said employee is not entitled to separation pay.[6]
11
Ruling of the National Labor Relations Commission
On appeal, the NLRC affirmed the factual findings and monetary awards of the
Labor Arbiter but added an award of financial assistance. The decretal portion of
the September 20, 2002 Decision[7] reads:
WHEREFORE, premises considered, the decision under review is hereby
MODIFIED by granting an award of financial assistance in the form of
separation pay equivalent to one-half month pay for every year of service. In all
other respects the decision stands affirmed. All other claims of the complainant
are dismissed for lack of merit.[8]
Both parties moved for a reconsideration of the NLRC Decision. Petitioners asked that the
award of financial assistance be deleted, while Capor asked for a finding of illegal dismissal
and for reinstatement with full backwages.[9]
On February 28, 2003, the NLRC issued its Resolution[10] denying both motions for
reconsideration for lack of merit.
Ruling of the Court of Appeals
Aggrieved, petitioners filed a Petition for Certiorari[11] before the CA imputing grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of the NLRC for
awarding financial assistance to Capor.
Citing Philippine Long Distance Telephone Company v. National Labor Relations
Commission,[12] petitioners argued that theft of company property is a form of serious
misconduct under Article 282(a) of the Labor Code for which no financial assistance in the
form of separation pay should be allowed.
Unimpressed, the appellate court affirmed the NLRCs award of financial
assistance to Capor. It stressed that the laborers welfare should be the primordial and
paramount consideration when carrying out and interpreting provisions of the Labor
Code. It explained that the mandate laid down in Philippine Long Distance Telephone
Company v. National Labor Relations Commission[13] was not absolute, but merely
directory.
Hence, this petition.
Issue
 The issue before us is whether the NLRC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in granting financial assistance to an employee
who was validly dismissed for theft of company property.
Our Ruling
We grant the petition.
Conviction in a criminal
case is not necessary to
find just cause for
termination of
employment.
On the date that the appellate court issued its Decision, Capor filed a
Manifestation[14] informing the CA of her acquittal in the charge of qualified theft. The
dispositive portion of said Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
acquitting Nenita Capor of the crime charged against her in this case on the
ground of reasonable doubt with costs de oficio.
Capor thus claims that her acquittal in the criminal case proves that petitioners
failed to present substantial evidence to justify her termination from the company. She
therefore asks for a finding of illegal dismissal and an award of separation pay equivalent
to one month pay for every year of service.
On the other hand, petitioners argue that the dismissal of a criminal action should not
carry a corresponding dismissal of the labor action since a criminal conviction is
unnecessary in warranting a valid dismissal for employment.
Petitioners further maintain that the ruling in Philippine Long Distance Telephone
Company v. National Labor Relations Commission[15] regarding the disallowance of
separation pay for those dismissed due to serious misconduct or moral turpitude is
mandatory. Petitioners likewise argue that in Zenco Sales, Inc. v. National Labor Relations
Commission,[16] the Supreme Court found grave abuse of discretion on the part of the NLRC
when it ignored the principles laid down in the Philippine Long Distance Telephone
Company v. National Labor Relations Commission. Thus, petitioners pray for the reversal of
the CA Decision and reinstatement of the Labor Arbiters Decision dated November 16,
1999.
Capor was acquitted in Criminal Case No. 207-58-MN based on reasonable
doubt. In his Decision, the trial judge entertained doubts regarding the guilt
of Capor because of two circumstances: (1) an ensuing labor dispute (though it omitted to
12
state the parties involved), and (2) the upcoming retirement of Capor. The trial judge
made room for the possibility that these circumstances could have motivated petitioners
to plant evidence against Capor so as to avoid paying her retirement benefits. The trial
court did not categorically rule that the acts imputed to Capor did not occur. It did not find
petitioners version of the event as fabricated, baseless, or unreliable. It merely
acknowledged that seeds of doubt have been planted in the jurors mind which,
in a criminal case, is enough to acquit an accused based on reasonable doubt. The
pertinent portion of the trial courts Decision reads:
During the cross examination of the accused, she was confronted with a
document that must be related to a labor dispute. x x x The Court noted very
clearly from the transcript of stenographic notes that it must have been
submitted to the NLRC. This is indicative of a labor dispute which, although not
claimed directly by the accused, could be one of the reasons why
she insinuated that evidence was planted against her in order to deprive her of
the substantial benefits she will be receiving when she retires from the
company. Incidentally, this document was never included in the written offer of
evidence of the prosecution.
Doubt has, therefore, crept into the mind of the Court concerning the guilt of
accused Nenita Capor which in this jurisdiction is mandated to be resolved in
favor of her innocence.
Pertinent to the foregoing doubt being entertained by this Court, the Court of
Appeals citing People v. Bacus, G.R. No. 60388, November 21, 1991: the phrase
beyond reasonable doubt means not a single iota of doubt remains present in
the mind of a reasonable and unprejudiced man that a person is guilty of a
crime. Where doubt exists, even if only a shred, the Court must and should set
the accused free. (People v. Felix, CA-G.R. No. 10871, November 24, 1992)
WHEREFORE, premises considered, judgment is hereby rendered acquitting
accused Nenita Capor of the crime charged against her in this case on the
ground of reasonable doubt, with costs de oficio.
SO ORDERED.[17]
In Nicolas v. National Labor Relations Commission,[18] we held that a criminal
conviction is not necessary to find just cause for employment termination. Otherwise
stated, an employees acquittal in a criminal case, especially one that is grounded on the
existence of reasonable doubt, will not preclude a determination in a labor case that he is
guilty of acts inimical to the employers interests.[19]
Criminal cases require proof beyond reasonable doubt while labor
disputes require only substantial evidence, which means such relevant evidence as a
reasonable mind might accept as adequate to justify a conclusion.[20] The evidence in this
case was reviewed by the appellate court and two labor tribunals endowed with expertise
on the matter the Labor Arbiter and the NLRC. They all found substantial evidence to
conclude that Capor had been validly dismissed for dishonesty or serious misconduct. It is
settled that factual findings of quasi-judicial agencies are generally accorded respect and
finality so long as these are supported by substantial evidence. In the instant case, we find
no compelling reason to doubt the common findings of the three reviewing bodies.
The award of separation
pay is not warranted
under the law and
jurisprudence.
We find no justification for the award of separation pay to Capor. This award is a deviation
from established law and jurisprudence. [21]
The law is clear. Separation pay is only warranted when the cause for termination is not
attributable to the employees fault, such as those provided in Articles 283 and 284 of the
Labor Code, as well as in cases of illegal dismissal in which reinstatement is no longer
feasible.[22] It is not allowed when an employee is dismissed for just cause,[23] such as
serious misconduct.
Jurisprudence has classified theft of company property as a serious misconduct
and denied the award of separation pay to the erring employee.[24] We see no reason why
the same should not be similarly applied in the case of Capor. She attempted to steal the
property of her long-time employer. For committing such misconduct, she is definitely not
entitled to an award of separation pay.
It is true that there have been instances when the Court awarded financial assistance to
employees who were terminated for just causes, on grounds of equity and social
justice. The same, however, has been curbed and rationalized in Philippine Long Distance
Telephone Company v. National Labor Relations Commission.[25] In that case, we recognized
the harsh realities faced by employees that forced them, despite their good intentions, to
violate company policies, for which the employer can rightfully terminate their
employment.For these instances, the award of financial assistance was allowed. But, in
clear and unmistakable language, we also held that the award of financial assistance shall
not be given to validly terminated employees, whose offenses are iniquitous or reflective
of some depravity in their moral character. When the employee commits an act of
dishonesty, depravity, or iniquity, the grant of financial assistance is misplaced
compassion. It is tantamount not only to condoning a patently illegal or dishonest act, but
an endorsement thereof. It will be an insult to all the laborers who, despite their economic
difficulties, strive to maintain good values and moral conduct.
In fact, in the recent case of Toyota Motors Philippines, Corp. Workers Association
(TMPCWA) v. National Labor Relations Commission,[26] we ruled that separation pay shall
not be granted to all employees who are dismissed on any of the four grounds provided in
13
Article 282 of the Labor Code. Such ruling was reiterated and further explained in Central
Philippines Bandag Retreaders, Inc. v. Diasnes:[27]
To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must
demur the award of separation pay based on social justice when an employees
dismissal is based on serious misconduct or willful disobedience; gross and
habitual neglect of duty; fraud or willful breach of trust; or commission of a
crime against the person of the employer or his immediate family grounds
under Art. 282 of the Labor Code that sanction dismissals of employees. They
must be most judicious and circumspect in awarding separation pay or
financial assistance as the constitutional policy to provide full protection to
labor is not meant to be an instrument to oppress the employers. The
commitment of the Court to the cause of labor should not embarrass us from
sustaining the employers when they are right, as here. In fine, we should be
more cautious in awarding financial assistance to the undeserving and those
who are unworthy of the liberality of the law.
We are not persuaded by Capors argument that despite the finding of theft, she should still
be granted separation pay in light of her long years of service with petitioners. We held
in Central Pangasinan Electric Cooperative, Inc. v. National Labor Relations
Commission[28] that:
Although long years of service might generally be considered for the award of
separation benefits or some form of financial assistance to mitigate the effects
of termination, this case is not the appropriate instance for generosity x x x. The
fact that private respondent served petitioner for more than twenty years with
no negative record prior to his dismissal, in our view of this case, does not call
for such award of benefits, since his violation reflects a regrettable lack of loyalty
and worse, betrayal of the company. If an employees length of service is to be
regarded as justification for moderating the penalty of dismissal, such gesture
will actually become a prize for disloyalty, distorting the meaning of social
justice and undermining the efforts of labor to clean its ranks of undesirables.
Indeed, length of service and a previously clean employment record cannot simply erase
the gravity of the betrayal exhibited by a malfeasant employee.[29] Length of service is not
a bargaining chip that can simply be stacked against the employer. After all, an employer-
employee relationship is symbiotic where both parties benefit from mutual loyalty and
dedicated service. If an employer had treated his employee well, has accorded him
fairness and adequate compensation as determined by law, it is only fair to expect a long-
time employee to return such fairness with at least some respect and honesty. Thus, it may
be said that betrayal by a long-time employee is more insulting and odious for a fair
employer. As stated in another case:
x x x The fact that [the employer] did not suffer pecuniary damage will not
obliterate respondents betrayal of trust and confidence reposed by
petitioner. Neither would his length of service justify his dishonesty or mitigate
his liability. His length of service even aggravates his offense. He should have
been more loyal to petitioner company from which he derived his family bread
and butter for seventeen years.[30]
While we sympathize with Capors plight, being of retirement age and having served
petitioners for 39 years, we cannot award any financial assistance in her favor because it
is not only against the law but also a retrogressive public policy. We have already
explained the folly of granting financial assistance in the guise of compassion in the
following pronouncements:

x x x Certainly, a dishonest employee cannot be rewarded with separation pay

or any financial benefit after his culpability is established in two decisions by
competent labor tribunals, which decisions appear to be well-supported by
evidence. To hold otherwise, even in the name of compassion, would be to send
a wrong signal not only that crime pays but also that one can enrich himself at
the expense of another in the name of social justice. And courts as well as quasi-
judicial entities will be overrun by petitioners mouthing dubious pleas for
misplaced social justice.Indeed, before there can be an occasion for compassion
and mercy, there must first be justice for all. Otherwise, employees will be
encouraged to steal and misappropriate in the expectation that eventually, in
the name of social justice and compassion, they will not be penalized but instead
financially rewarded. Verily, a contrary holding will merely encourage
lawlessness, dishonesty, and duplicity. These are not the values that society
cherishes; these are the habits that it abhors.[31]

WHEREFORE, the petition is GRANTED. The assailed June 3, 2004 Decision of the Court
of Appeals in CA-G.R. SP No. 76789 affirming the September 20, 2002 Decision of the
National Labor Relations Commission is ANNULLED and SET ASIDE. The November
16, 1999 Decision of the Labor Arbiter is REINSTATED and AFFIRMED.

SO ORDERED.

14