G.R. No. 121324 . September 30, 1999.
PEPSI-COLA PRODUCTS PHILIPPINES INCORPORATED, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and MARCIAL R. DE LIRA, respondents.

FACTS

Petitioner Pepsi-Cola Products Philippines Inc. is a domestic corporation. Private respondent Marcial R. de Lira was employed as a route manager at its Borongan, Eastern Samar warehouse. An audit on April 26-27, 1991, conducted by the plant finance manager and district manager, cited irregularities: (1) Only 16 of 59 cases of complimentary products reported under a charge invoice were given to Bonita Store, with the remainder allegedly converted to cash and given to a hospital administrative officer; (2) Private respondent and a salesman retrieved 176 cases of loaned empty bottles from a customer without issuing an acknowledgment receipt; (3) A one-shot product deal was extended to a reported store owner, Elisa R. Añosa, but verification showed no such store existed. Private respondent was asked to explain and was preventively suspended without pay from May 7-18, 1991. In his written explanation, he admitted the acts but offered justifications: the cash from the 43 cases was an incentive; the empties were pulled out due to the customer’s delinquency; and the deal was for an employee who helped make an office a Pepsi exclusive. During the investigation, he allegedly uttered threats and foul language. His preventive suspension was extended twice, eventually totaling 54 days, with the final 25 days being with pay. On July 1, 1991, he was terminated for the three irregularities and the additional offense of uttering threats, which were deemed violations of company rules on falsification, dishonesty, and commission of a crime. Private respondent filed a complaint for illegal dismissal. The Labor Arbiter ruled in his favor, finding no valid cause for dismissal and ordering reinstatement with backwages, payment for excess suspension days, and attorney’s fees. The NLRC affirmed the decision. Petitioner’s motion for reconsideration was denied.

ISSUE

Whether public respondent NLRC committed grave abuse of discretion in affirming the Labor Arbiter’s decision that found private respondent’s dismissal illegal.

RULING

The Supreme Court denied the petition for lack of merit and affirmed the NLRC decision with modification. The Court held that for dismissal to be valid, it must be for a just or authorized cause and the employee must be afforded due process. The grounds cited by petitioner (falsification, dishonesty, commission of a crime) required proof by substantial evidence. The Court agreed with the labor tribunals that petitioner failed to substantiate the charges. Regarding the first charge, private respondent’s act of converting deals to cash, while irregular, was purportedly for a business purpose and there was no evidence he misappropriated the funds. On the second charge, the retrieval of empties without a receipt, while a procedural lapse, was done due to the customer’s delinquency, and there was no proof the empties were misappropriated. On the third charge, the deal was given to an individual, not a store, but it resulted in exclusive patronage. The alleged threats and foul language during the investigation, even if true, did not constitute a serious misconduct warranting dismissal as they were provoked by the stressful inquiry. The Court found no grave abuse of discretion in the NLRC’s findings. The order of reinstatement with full backwages from dismissal until actual reinstatement was upheld. The award of backwages for the suspension period in excess of 30 days was maintained, and the attorney’s fees were reduced to 5% of the total award.