G.R. No. L-13778. April 29, 1960.
PHILIPPINE EDUCATION CO., INC., petitioner, vs. UNION OF PHILIPPINE EDUCATION EMPLOYEES (NLU) and THE COURT OF INDUSTRIAL RELATIONS, respondents.

FACTS

Petitioner Philippine Education Co., Inc. appealed from the Court of Industrial Relations (CIR) order dated February 7, 1958, directing it to reinstate former employee Ernesto Carpio without backpay, and the CIR en banc resolution dated March 22, 1958, denying reconsideration. Carpio, a union member, participated in a strike on January 16, 1953. After the labor dispute was settled, the CIR ordered the reinstatement of strikers, including Carpio. The company opposed Carpio’s reinstatement because a criminal complaint for theft of company magazines had been filed against him in the Municipal Court of Manila, where he was convicted and sentenced to two months and one day of arresto mayor. On appeal to the Court of First Instance, Carpio was acquitted on the ground of reasonable doubt. The CIR, after hearing and reviewing the evidence from the criminal case, agreed with the acquittal and held Carpio entitled to reinstatement without backpay.

ISSUE

Whether the acquittal of an employee in a criminal case for theft, particularly on the ground of reasonable doubt, entitles the employee to reinstatement by the employer.

RULING

No. The Supreme Court reversed the CIR orders. The Court held that an acquittal in a criminal case, especially on reasonable doubt, does not bar a finding by the CIR, after proper hearing, that the employee committed acts inimical to the employer’s interests, justifying loss of confidence and dismissal. The evidence required in criminal cases (proof beyond reasonable doubt) differs from that in civil or non-criminal cases (preponderance of evidence). Citing National Labor Organization of Employees and Laborers vs. Court of Industrial Relations (95 Phil., 727) and National Labor Union vs. Standard Vacuum Oil Company (73 Phil., 279), the Court emphasized that an employer-employee relationship, especially where the employee has access to the employer’s merchandise, necessarily involves trust and confidence. If merchandise loss is reasonably attributed to the employee and the employer loses confidence in him, it would be unfair to compel reinstatement, even after an acquittal on reasonable doubt. In this case, Carpio’s conviction in the Municipal Court and subsequent acquittal on reasonable doubt did not eliminate the company’s ample reason to distrust him. The refusal to reinstate was not due to union affiliation or unfair labor practice but to loss of confidence. Therefore, the company could not be required to reinstate Carpio.