ERIC DELA CRUZ AND RAUL M. LACUATA, PETITIONERS, VS. COCA-COLA BOTTLERS PHILS. INC., RESPONDENT.

Dela Cruz versus Coca-Cola Bottlers Philippines

The Case

This is a labor case about two supervisory employees of Coca-Cola Bottlers Philippines who were dismissed after they were found to have conspired in producing a police report and a medical certificate that concealed the true circumstances of a colleague's vehicular accident. Eric dela Cruz and Raul Lacuata, both sales supervisors, filed complaints for illegal suspension and dismissal against their employer. The case matters because it is the Supreme Court's clean illustration of the loss of trust and confidence doctrine as applied to supervisory employees, and of the rule that back wages and separation pay follow only from a finding of illegal dismissal.

Procedural History

The Labor Arbiter dismissed the complaint of a co-employee, John Espina, for lack of merit. As to dela Cruz, the Labor Arbiter found him illegally dismissed and ordered his reinstatement with back wages, thirteenth month pay, attorney's fees, and moral damages. As to Lacuata, the Labor Arbiter found that he did nothing to stop Espina from obtaining false police and medical reports, so the employer was justified in losing trust and confidence in him; nevertheless, the Labor Arbiter ordered payment of back wages, thirteenth month pay, and separation pay.

On the employer's appeal, the National Labor Relations Commission affirmed the Labor Arbiter but deleted the award of moral damages in favor of dela Cruz. The employer's motion for reconsideration was denied, so it filed a petition for certiorari before the Court of Appeals. The Court of Appeals set aside the Commission's decision and found that the petitioners were validly dismissed. The petitioners then came to the Supreme Court by petition for review.

Facts

On August 12, 2000, Raymund Sales, a salesman of the respondent company, figured in a motor vehicle accident while driving a company vehicle he was not authorized to use. He was hospitalized, and he was observed to have been under the influence of liquor at the time of the accident. The police blotter of the incident likewise indicated that he was under the influence of liquor.

The company soon discovered that Sales' co-employees had secured a police report dated August 15, 2000 and a medical certificate dated August 14, 2000 which omitted the statement that Sales was under the influence of liquor. After an initial investigation, the company issued separate memoranda to Sales Supervisor John Espina and to the petitioners, Sales Delivery Supervisor Raul Lacuata and Sales Supervisor Eric dela Cruz, requiring them to explain why no disciplinary action should be taken against them for violation of the Employees' Code of Disciplinary Rules and Regulations in connection with the production of those documents and the use of the name of the General Manager in producing them.

Dela Cruz replied that all he did was to send a text message to a refrigeration foreman asking for a copy of the police report. Lacuata claimed he had no participation in the preparation of the questioned documents and that all he did was to pick up the medical certificate from the hospital. Espina likewise denied participation in the alteration of the documents. Further investigation showed that Espina and the petitioners conspired to have an altered report prepared to make it appear that Sales was not under the influence of liquor. Espina and the petitioners were thereupon dismissed, and they filed separate complaints for illegal suspension and dismissal.

Issues

• Whether or not the Court of Appeals erred in rejecting the factual findings of the Labor Arbiter and the National Labor Relations Commission and in concluding that facts were established warranting the petitioners' separation from employment.
• Whether or not the respondent successfully discharged the burden of proof required by the Constitution.
• Whether or not the breach of confidence, if any, was willful.
• Whether or not the alleged infraction was connected with the petitioners' work.
• Whether or not dismissal from service was the proper penalty, notwithstanding the alleged absence of substantial evidence and the allegedly oppressive nature of the penalty.
• Whether or not all doubt in the implementation of the Labor Code or arising from the evidence should be resolved in favor of labor.

Applicable Provisions

The decision refers to Article 282 of the Labor Code in connection with the memoranda issued to the petitioners. The Court does not quote its text, but the provision supplies the ground of termination invoked against them, namely serious misconduct and willful breach of the trust and confidence reposed in an employee by the employer. The Court's ruling turns on the requirement that the breach be willful and work-related.

The decision also invokes the constitutional policy on the burden of proof in labor cases, which the petitioners raised as their second issue. The Court resolves that issue by holding that the employer's evidence was substantial, so the burden was discharged.

Ruling

The petition fails. On the first issue, the Court restates the general rule that findings of fact of the Labor Arbiter and the National Labor Relations Commission will not be interfered with unless it is shown that they arbitrarily disregarded or misappreciated the evidence before them to such an extent as to compel a contrary conclusion. Here, the Court of Appeals had ample basis to overturn the findings, because the records were replete with proof of acts inimical to the interests of management and of the company itself, done through deceitful means.

On the second issue, the Court holds that the respondent discharged its burden. The detailed account of what transpired, given by the witnesses and by the supervisors themselves, was substantial proof of the grave infraction and indubitable proof of their anomalous acts.

On the third and fourth issues, the Court holds that the breach was both willful and work-related. By obtaining an altered police report and medical certificate, the petitioners deliberately attempted to cover up the fact that Sales was under the influence of liquor at the time of the accident. In so doing, they committed acts inimical to the respondent's interests, and thus committed a work-related willful breach of the trust and confidence reposed in them.

On the fifth issue, the Court holds that dismissal was the proper penalty. The petitioners were supervisory employees and were thus covered by the trust and confidence rule. Since an award of back wages and separation pay is justified only if there is a finding of illegal dismissal, and there was none, the Court of Appeals correctly overturned the ruling of the Labor Arbiter and the Commission.

On the sixth issue, the Court rejects the invocation of the doubt-in-favor-of-labor principle. That principle cannot be used to shield employees from the consequences of their own deceit, where the evidence of their infraction is substantial.

Doctrine

First, loss of trust and confidence as a ground for termination requires that the breach be willful and connected with the employee's work. The Court states the rule in these terms:

Indeed, by obtaining an altered police report and medical certificate, petitioners deliberately attempted to cover up the fact that Sales was under the influence of liquor at the time the accident took place. In so doing, they committed acts inimical to respondent's interests. They thus committed a work-related willfull breach of the trust and confidence reposed in them.

Second, supervisory employees are covered by the trust and confidence rule, so the employer may terminate them for a willful breach of the confidence reposed in them.

Third, back wages and separation pay are justified only if there is a finding of illegal dismissal. Where the dismissal is valid, no such award may stand.

Fourth, findings of fact of the Labor Arbiter and the National Labor Relations Commission will not be disturbed unless shown to have been arrived at arbitrarily or with misappreciation of evidence so grave as to compel a contrary conclusion.

Disposition

The petition was denied, the decision of the Court of Appeals was affirmed, and costs were taxed against the petitioners.

Remember This

Memorize the line that a work-related willful breach of trust and confidence justifies dismissal, and that back wages and separation pay follow only from a finding of illegal dismissal. Examiners use this case to test the trust and confidence rule for supervisory employees and the limits of the doubt-in-favor-of-labor principle.