GR 51632; (September, 1989) (Digest)
G.R. No. 51632 September 7, 1989
PEPSICO, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and JOSE S. LAPID, respondents.
FACTS
Jose S. Lapid was employed as the “Director of Leasing” at PEPSICO, Inc., with a monthly salary of P4,200.00 and fringe benefits including a car plan. His duties involved canvassing lessees, surveying businesses, ordering equipment, processing lease applications for credit committee approval, handling collections, and managing repossessions. PEPSICO terminated his services after discovering that machinery he purchased, represented as new, was second-hand or overvalued, and that 14 out of 24 lease agreements he executed became “bad accounts,” causing over P7 million in losses. The company cited loss of confidence due to gross negligence.
Lapid filed a complaint for illegal dismissal. The Labor Arbiter ruled he was a managerial employee, and his dismissal for loss of confidence was valid, requiring no prior Labor Department clearance. However, the Arbiter awarded him P56,700.00 as financial assistance. On appeal, the NLRC reversed the decision, classifying Lapid as a rank-and-file employee and declaring his dismissal illegal due to the absence of prior clearance. It awarded him separation pay and back wages. PEPSICO challenged this reversal via certiorari, alleging grave abuse of discretion.
ISSUE
Whether the NLRC committed grave abuse of discretion in reversing the Labor Arbiter’s decision by classifying Lapid as a rank-and-file employee and finding his dismissal illegal.
RULING
Yes, the NLRC committed grave abuse of discretion. The Supreme Court reinstated the Labor Arbiter’s decision. The evidence conclusively established Lapid as a managerial employee. His role as Director of Leasing involved managing a department, exercising plenary authority and discretion to bind the company in contracts worth millions, which constituted the company’s principal activity. This classification negates rank-and-file status. As a managerial employee, his dismissal for loss of confidence did not require prior clearance from the Department of Labor under the Labor Code.
The grounds for loss of confidence were substantiated by evidence of gross negligence, including purchasing second-hand equipment as new, dealing with a fictitious supplier, and causing significant financial losses. These acts justified his termination. The Court noted that no dishonesty or moral turpitude was ascribed to Lapid; the cause was gross negligence. Consequently, the award of financial assistance by the Labor Arbiter was appropriate as a measure of social justice, considering Lapid’s long service, age, poor health, and economic situation, aligning with precedents where such aid is granted for dismissals not involving integrity issues. The NLRC’s disregard of this evidence constituted capricious exercise of judgment, warranting nullification of its decision.