G.R. No. 88268 June 2, 1992
San Miguel Corporation, petitioner, vs. National Labor Relations Commission and Francisco Divinagracia, respondents.

FACTS

Francisco Divinagracia started working with San Miguel Corporation (SMC) on November 16, 1977, and by July 24, 1982, he was the Regional Cashier of the Bacolod Beer Region. His duties included receiving cash remittances, preparing disbursement vouchers, and safeguarding funds in a vault. On January 31, 1985, at 5:00 p.m., Divinagracia sought and obtained permission from his supervisor, Regional Accountant Remus Banogon, to leave the office for a personal errand. Upon his return about an hour later, he discovered a shortage of P10,004.56. He reported the matter the next morning to the security guard and Banogon. A review of the previous day’s transactions with Banogon and the General Accounting Clerk failed to account for the shortage, which was then reported to the Operations Manager. Following an investigation, SMC demanded payment for the shortage from Divinagracia and dismissed him on May 31, 1985. Divinagracia filed an action for illegal dismissal on December 23, 1985. The Labor Arbiter ruled in favor of Divinagracia, ordering his reinstatement with full back wages, accepting his claim that he had formally turned over the funds to Banogon before leaving and that Banogon, who had duplicate keys to the cashier’s booth and knew the vault combination, was never investigated. On appeal, the NLRC sustained the finding of illegal dismissal but modified the judgment by ordering reinstatement without back wages, stating Divinagracia was not totally blameless. SMC petitioned to nullify the NLRC decision.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in its factual findings that led to the conclusion that Francisco Divinagracia was illegally dismissed.

RULING

Yes, the Supreme Court granted the petition, nullified and set aside the NLRC decision, and dismissed the complaint for illegal dismissal. The Court found that the NLRC’s conclusions were whimsical, capricious, and arrived at with grave abuse of discretion. The NLRC selectively accepted parts of Banogon’s testimony (that he had access to the booth and vault) while rejecting his declaration that he never entered the booth on the day in question, without providing any justification. The NLRC also discredited the testimony of Accounting Clerk Jocelyn B. Longno without valid cause. Longno testified that from the time Divinagracia left until she departed, Banogon never left his table or entered the cashier’s booth, and her desk placement allowed her a clear view. The NLRC’s speculative arguments against Longno’s credibility—that she testified to protect her employment and was too focused on her work to notice—were unsupported and irrational. The evidence established that only Divinagracia had control and custody of the funds, and no evidence implicated Banogon or any other person in the shortage. Therefore, the NLRC’s decision lacked factual basis and was reversed.