G.R. No. 165465 ; September 13, 2006
Loida V. Malabago, petitioner, vs. National Labor Relations Commission and Pacifica Agrivet Supplies, Inc., respondents.

FACTS

Petitioner Loida V. Malabago, OIC-Store Supervisor, took various store stocks (e.g., day-old chicks, feeds) without issuing the required cash slips or sales invoices, promising later payment. She informed the branch clerk of these transactions. When a new clerk, Jennifer Doit, assumed duties, petitioner again took stock without documentation and made only partial payment using cost price instead of selling price. Doit and a utility man reported these acts to management, alleging petitioner also overpriced items to customers to offset her withdrawals. The company issued a memorandum directing petitioner to explain, stating that releasing stocks without documentation was a Type D offense punishable by dismissal. Petitioner admitted the facts but argued the policy only applied to releases to customers, not employees, and highlighted her good faith in informing co-workers.
After investigation, the company dismissed petitioner for the stated offenses. She filed a complaint for illegal dismissal, arguing lack of due process and that her actions, done in good faith without intent to defraud, did not constitute a just cause for termination under the Labor Code. The Labor Arbiter and the NLRC dismissed her complaint. The Court of Appeals affirmed the validity of the dismissal but awarded separation pay as financial assistance.

ISSUE

Whether the Court of Appeals erred in: (1) ruling that a valid ground for termination existed; and (2) awarding separation pay despite a valid dismissal.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. On the first issue, the dismissal was valid. The employer has the right to impose disciplinary measures for violations of reasonable company rules and regulations. Petitioner’s act of taking company property without following prescribed procedures constituted willful disobedience of lawful company orders. Her defense—that the policy only covered customers—was untenable, as the policy’s clear intent was to safeguard company assets from any unauthorized release. Her good faith in informing colleagues did not negate the violation of a known rule that she, as a supervisor, was duty-bound to obey.
On the second issue, the award of separation pay as financial assistance was proper. While an employee dismissed for just cause is generally not entitled to separation pay, the Court may grant it as a measure of social justice in exceptional cases, provided the cause does not reflect on the employee’s moral character. Here, the violation of a procedural policy, while willful, did not involve fraud, dishonesty, or depravity. The Court considered petitioner’s honesty in disclosing her withdrawals, her partial payments, and her unblemished record of over five years. Thus, financial assistance was warranted as an equitable concession.