G.R. No. 247410, March 17, 2021
Nilo D. Lafuente and Billy C. Panaguiton, Petitioners, vs. Davao Central Warehouse Club, Inc., and Lily S. Yap, Corporate Secretary, Respondents.

FACTS

Petitioners Nilo D. Lafuente (hired in 1993 as Dispatching-in-Charge) and Billy C. Panaguiton (hired in 1995 as Assistant Dispatcher) were employees of respondent Davao Central Warehouse Club, Inc. (DCWCI). On September 5, 2016, DCWCI issued a Notice of Preventive Suspension with Investigation Hearing against petitioners, placing them under preventive suspension and charging them with “Gross and Habitual Neglect of Duties” and “Fraud/Willful Breach of Trust” due to missing/loss of several appliances in the warehouse under their watch. Petitioners submitted written explanations denying knowledge of the incident. Lafuente explained his duties were limited to recording model and serial numbers for dispatch and assisting in carrying items, with the guard on duty verifying items before loading. Panaguiton stated he would take over checking units only when Lafuente was absent and that he had reported missing units to his manager. After an investigation, DCWCI, via Memoranda dated October 5, 2016, found petitioners guilty of Gross and Habitual Neglect of Duties and terminated their employment. DCWCI asserted that as dispatchers, it was their main duty to ensure proper documentation for all units taken out and to maintain order in their area, and their failure to perform due to gross negligence resulted in damage to the company. Petitioners filed a complaint for illegal dismissal, arguing the first notice did not detail their infraction, they had no participation in the theft, and the loss was attributable to other personnel. They also noted that Lafuente’s efforts led to the surrender of the thief (a utility man and his cousin) and recovery of some stolen TVs. The Labor Arbiter (LA) ruled in favor of petitioners, declaring the dismissal illegal and awarding separation pay, 13th month pay, and service incentive leave pay, finding their primary duty was simply to ascertain requirements for release and they were not directly accountable for warehouse security. The National Labor Relations Commission (NLRC) reversed the LA, ruling petitioners were validly dismissed for gross and habitual neglect of duties due to their failure to monitor operations and account for stocks, which led to the loss of 29 television sets. The Court of Appeals affirmed the NLRC’s decision, dismissing the petition for lack of merit.

ISSUE

Whether petitioners were validly dismissed from employment on the ground of gross and habitual neglect of duties.

RULING

Yes, petitioners were validly dismissed. The Supreme Court affirmed the decisions of the NLRC and the Court of Appeals. The Court held that the dismissal was for a just cause under Article 297 [282](b) of the Labor Code (Gross and habitual neglect by the employee of his duties) and that procedural due process (the twin notice rule) was observed. The preventive suspension was justified as a disciplinary measure to protect company property pending investigation and did not constitute immediate termination. On the substantive aspect, the Court found that petitioners, as dispatchers, had the duty to check and record all items released from the bodega. Their failure to exercise due diligence allowed 29 television sets to be taken out without proper documentation, resulting in considerable damage (P448,056.00 in losses) to the company. While the negligence was not habitual, its gross nature and the significant resultant damage warranted dismissal. The Court also noted that petitioners admitted during the investigation that they did not implement monthly actual inventory and failed to request an audit despite having doubts about missing units. Therefore, DCWCI had sufficient legal basis to terminate petitioners’ employment. The petition was denied.