G.R. No. 172528 ; February 26, 2008
JANSSEN PHARMACEUTICA, petitioner, vs. BENJAMIN A. SILAYRO, respondent.

FACTS

Petitioner Janssen Pharmaceutica, a division of Johnson & Johnson Philippines Inc., employed respondent Benjamin Silayro as a Territory/Medical Representative in 1989. During his employment, respondent received several awards from 1990 to 1997 but was also investigated for various administrative charges. Petitioner alleged that in 1994, respondent was found guilty of granting unauthorized premium/free goods and unauthorized pull-outs from customers, though supporting records were not provided. Respondent admitted to the unauthorized premium/free goods but denied the unauthorized pull-outs charge.
In 1998, respondent was investigated for dishonesty in connection with a Rewards of Learning (ROL) test, as his answers were written in the handwriting of a co-employee, Joedito Gasendo. Petitioner issued a memo on July 27, 1998, requiring an explanation. Subsequently, on August 20, 1998, petitioner issued another memo for respondent’s delay in submitting process reports. Respondent explained that the delay was due to family bereavements and illnesses, and that he had Gasendo write his ROL answers because he needed to visit his hospitalized father-in-law.
On October 20, 1998, petitioner issued memos for delayed report submission and for discrepancies between the number of product samples recorded in his Daily/Weekly Coverage Report and the number found during an audit on October 14, 1998, where actual samples exceeded reported ones. Respondent admitted errors in posting distributed samples and failing to count samples properly.
On November 20, 1998, petitioner issued a Notice of Disciplinary Action suspending respondent for one day without pay for delayed reports and another one-day suspension for cheating on the ROL test. On the same date, a Notice of Preventive Suspension was issued for “Dishonesty in Accomplishing Other Accountable Documents” regarding the sample discrepancy, noting this was his third offense for the year, potentially warranting dismissal under company policy. The notice directed surrender of company assets by November 25, 1998.
Before November 25, 1998, a memo dated November 24, 1998, was issued for failure to turn over company vehicles and refusing to obey orders. Respondent explained he feared surrendering assets would imply guilt. An administrative hearing was held on December 3, 1998, where respondent promised to surrender assets, and a follow-up hearing was agreed upon but not held. Respondent and his union representative sought instructions on returning assets, but petitioner’s supervisor indicated arrangements were being made. Respondent claimed he received no further instructions.
On December 28, 1998, petitioner terminated respondent’s services, finding him guilty of dishonesty in sample reporting and failure to return company assets, citing previous offenses including the 1994 infractions, 1998 report delays, and ROL test dishonesty. Post-termination, petitioner demanded return of assets via a letter dated February 3, 1999.
Respondent filed a complaint for illegal dismissal and other claims before the NLRC on January 14, 1999. The Labor Arbiter ruled that while respondent committed infractions warranting dismissal, the penalty was too harsh and ordered reinstatement without back wages. The NLRC, on appeal, modified the decision, finding the dismissal legal and setting aside reinstatement. The Court of Appeals reversed the NLRC, declaring the dismissal illegal as an excessive penalty and instead imposing a five-month suspension without salary.

ISSUE

Whether the Court of Appeals erred in ruling that respondent’s dismissal was illegal and in modifying the penalty to a five-month suspension without salary.

RULING

The Supreme Court granted the petition, reversing the Court of Appeals and reinstating the NLRC decision that declared respondent’s dismissal legal. The Court held that the dismissal was based on just causes under Article 282 of the Labor Code, specifically fraud or willful breach of trust and gross and habitual neglect of duties. Respondent’s actions, including dishonesty in the ROL test, discrepancies in sample accountability reports, and failure to obey lawful orders to surrender company assets, constituted a pattern of conduct that eroded the trust essential to his employment as a sales representative handling company property. His admission to some infractions and history of violations supported the finding of habitual neglect. The penalty of dismissal was not excessive given the breach of trust and repeated offenses. The Court emphasized that in termination cases, the employer must prove by substantial evidence that the dismissal was for a just cause, which petitioner satisfactorily did. The Court of Appeals overstepped its authority by re-evaluating the evidence and substituting its judgment on the appropriate penalty, as factual findings of the NLRC, when supported by substantial evidence, are accorded respect and finality.