Facts
Farrales, an Assistant Unit Chief (supervisory employee) of Hocheng Philippines Corporation (HPC), had permission from a co-employee, Eric Libutan, to borrow one of Eric’s two helmets. On November 27, 2009, Farrales was seen on CCTV instructing another employee, Andy, to retrieve a yellow helmet from a parked motorcycle. Farrales claimed he mistook this yellow helmet, which belonged to Reymar Solas (another employee’s nephew), as the one belonging to Eric. When Andy hesitated to retrieve the item, Farrales told Andy that the helmet was his (Farrales’s). Upon learning from Eric on December 3, 2009, that he had taken the wrong helmet, Farrales immediately phoned the company guard to report the situation, located the owner (Reymar), apologized, and returned the helmet the following day. HPC terminated Farrales for alleged theft, citing violation of the HPC Code of Discipline (akin to serious misconduct and willful breach of trust under Article 282 of the Labor Code).
Issues
- Whether the employer, HPC, proved by substantial evidence that Farrales committed theft, serious misconduct, or willful breach of trust to justify his dismissal.
- Whether Farrales’s act of mistakenly taking a co-employee’s helmet and immediately returning it upon discovery constitutes a just cause for termination, such as loss of confidence.
Ruling
The Supreme Court resolved:
“The Court resolves to deny the petition”.
“WHEREFORE, premises considered, the petition for review is DENIED. SO ORDERED.”.
Essential Elements of Jurisprudence
The case reinforces the following controlling doctrines and legal principles in labor law:
- Burden of Proof for Dismissal: To legally dismiss an employee, the employer has the onus probandi (burden of proof) to show the existence of a valid or authorized cause, as enumerated in Article 282 of the Labor Code.
- Statutory Interpretation in Favor of Labor (Article 4, Labor Code): Article 4 of the Labor Code mandates that all doubts in the implementation and interpretation of the provisions thereof shall be resolved in favor of labor.
- Standard for Just Cause: The cause for termination must be a “serious and grave malfeasance to justify the deprivation of a means of livelihood”. If doubts exist between the evidence presented by the employer and that of the employee, the scales of justice must be tilted in favor of the latter.
- Misconduct Requires Willful Intent: Misconduct is defined as improper or wrong conduct, transgression of an established rule, and must be “willful in character, and implies wrongful intent and not mere error in judgment”. The misconduct must be of a grave and aggravated character and connected with the employee’s work to constitute just cause.
- Lack of Intent Negates Theft/Misconduct: The employer failed to discharge its burden to prove that the taking of the helmet was done “with intent to gain”. Farrales’s immediate action in reporting the mistake, seeking the owner, apologizing, and returning the item belied HPC’s claim of intent to gain.
- Proportionality: The penalty imposed on the employee must be “proportionate to the offense, taking into account its nature and surrounding circumstances”. The Court agreed that Farrales committed no serious or willful misconduct or disobedience to warrant his dismissal, noting the quick return of the item.
Sample Q&A
Question: An employee holding a supervisory position mistakenly takes a co-worker’s personal item from the company premises, genuinely believing they had permission to take that specific item, which was later corrected, returned, and apologized for immediately. Can the employer validly dismiss the employee based on willful breach of trust or serious misconduct, given the employee’s position and the requirement that theft against a third party is analogous to serious misconduct?
Answer: No. The dismissal is illegal. While theft committed against a person other than the employer is a cause analogous to serious misconduct, the employer (HPC) failed to prove by substantial evidence that the employee’s act was motivated by wrongful intent or intent to gain. The employee’s immediate action in correcting the mistake, apologizing, and returning the item demonstrates that the taking was merely an error in judgment, not the “serious and grave malfeasance” required to deprive a worker of their livelihood. Pursuant to Article 4 of the Labor Code, all doubts must be resolved in favor of labor, upholding the constitutional protection of security of tenure (Section 3, Article XIII, 1987 Constitution) against baseless terminations under Article 282 of the Labor Code.
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