PEPSICO, INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COM­MISSION AND JOSE S. LAPID, RESPONDENTS.

Jose S. Lapid occupied the position of “Director of Leasing” in petitioner
firm, PEPSICO, Inc. He had a salary of
P4,200.00 a month,1
enjoyed certain fringe benefits including a “car plan,” and had the
following duties and functions,2 to wit:

“A. Canvass
potential applicant/lessees, mainly from personal contacts.

B. Surveys the applicant’s business.

C. Communicates and order(s) the equipment with
a supplier or in the case of a sale and leaseback, physically inspect(s) the
applicant’s equipment.

D. Requests and follow(s) up on approval of
the lease application handling all documents for leasing until approval of the
credit committee.

E. Receives collections from the lessee (even)
without issuing any receipt.

F. Handles the repossession and sale of equipment for lessees in default.”

It having been discovered that he had purchased for PEPSICO
various types of machinery and equipment which he represented to be brand new
but which, on subsequent inspection were discovered to be if not second-hand,
over-valued, and that of twenty-four (24) lease agreements he had executed as
PEPSICO’s Director of Leasing, fourteen (14) had turned out to be “bad
accounts,” all said transactions involving an amount of more than P7
million, his employer terminated his services on account of loss of confidence
in his competence and reliability.1

Thereafter, Lapid, through an attorney, wrote to PEPSICO
requesting that he be reinstated or, alternatively, that he be allowed to
retire under the company’s retirement plan.2 His request was turned down,
PEPSICO asserting that as shown by indubitable documentary evidence, he had
“been grossly and habitually negligent in processing a number of leasing
agreements with company customers ** and such gross and habitual neglect on **
(his part in the) performance of his duties (had) resulted in enormous losses
to the company for which reason the latter could no longer retain him in its
employ.”3

Lapid then filed a complaint against PEPSICO and Reginald M.
Pointon (a PEPSICO official, and member of its Credit Committee)4
with the Labor Regional Office praying that his dismissal be pronounced
illegal, and that he be reinstated and paid damages.5 The verdict went against him,
however. The Labor Arbiter found, after
a thoroughgoing analysis of the evidence, that Lapid was a managerial employee,
that there was sufficient basis for his employer’s loss of confidence in him,
and, being a managerial employee, his dismissal required no prior clearance
from the Department of Labor. Nonetheless, the Labor Arbiter ordered the payment to him of financial
assistance in the sum of P56,700.00, viz.:

“WHEREFORE, pursuant to the above dispositions, the
respondents are hereby ordered to pay complainant Jose S. Lapid the amount of
FIFTY SIX THOUSAND SEVEN HUNDRED PESOS (P56,700.00) by way of financial
assistance.”6

On appeal,7 the NLRC reversed the judgment of
the Labor Arbiter, categorizing Lapid as a rank-and-file employee, not
managerial, and declaring that he had been illegally dismissed as no clearance
had been secured from the Labor Department prior to the termination of his
services. He was consequently awarded
separation pay as well as back wages from the time of his separation from
employment until the finality of the decision.8

This judgment is assailed as having been rendered by the NLRC
with grave abuse of discretion, in the instant special civil action of certiorari. PEPSICO’s petition alleges that in decreeing
payment to Lapid of back wages and separation pay, the NLRC had unwarrantedly
and capriciously disregarded the evidence persuasively establishing Lapid’s status
as a managerial employee, as well as the facts constituting adequate foundation
for PEPSICO’s loss of confidence in him. The petition has merit. The writ
of certiorari prayed for will issue.

The evidence relative to Lapid’s employment classification is
incapable of no interpretation except that of his being a managerial
employee. This is evident from the
nature of the duties and functions attached to his position as “Director
of Leasing;” he was in charge of purchasing and leasing industrial
machinery and equipment which, as the Labor Arbiter points out, was his
employer’s principal activity in the Philippines; he managed his own department
and had well nigh plenary authority and discretion to enter into contracts in
his employer’s behalf and binding on the latter; indeed he did execute a number
of contracts involving an aggregate amount of more than seven million pesos. Under these circumstances, it is absurd to
even think of categorizing such an employee as a rank-and-file employee, rather
than a managerial and primarily confidential one.

The evidence of his incompetence and negligence, is equally
convincing; he had bought machinery which he represented to his employer as
brand new but which was later discovered to be second-hand; he had foisted a fictitious
supplier upon the company; he had purchased equipment at prices higher than
those of the same type quoted to him by other sellers; he had caused enormous
losses to his employer. These facts
suffice by any standards to cause his employer to lose trust and confidence in
him, in his ability and his trustworthiness, justifying his dismissal from
employment,1
a dismissal which, it must be added, concerning as it did a managerial
employee, required no prior clearance from the Department of Labor.2

The record demonstrates no adequate basis, to repeat, for
respondent Commission to disregard the evidence on record and reverse the
judgment of the Labor Arbiter. In doing
so, the Commission acted with grave abuse of discretion. Thus, its decision must itself be, as it is
hereby nullified.

It is noteworthy that PEPSICO does not ascribe any dishonesty or
moral turpitude to Lapid. Neither has
the Labor Arbiter done so. What PEPSICO
ascribes to Lapid is “gross negligence in the performance of his duties
resulting in tremendous losses” to it.3 The award by the Labor Arbiter of
“financial assistance” to Lapid is not therefore proscribed by the doctrine
laid down in PLDT v. NLRC, G.R. No. 80609, August 23, 1988, reiterated
in Osias Academy v. Department of Labor and Employment, G.R. No. 83234,
April 18, 1989, that financial assistance or “separation pay shall be
allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct” but not
where the cause for termination of employment reflects on his personal
integrity or morality. Such financial
assistance is specially appropriate in this case, considering that Lapid, who
had served PEPSICO for a considerable length of time, is now in his middle
sixties, and is reportedly suffering from incurable emphysema and is in
difficult economic straits.4

WHEREFORE, the decision of the respondent Commission dated
August 31, 1979 is NULLIFIED AND SET ASIDE, and that of the Labor Arbiter
REINSTATED and CONFIRMED, without pronouncement as to costs.

Cruz, Gancayco, Griño-Aquino, and
Medialdea, JJ., concur.

1
A not inconsiderable sum at the time, 1975.

2
Respondent’s Comment, Feb. 2, 1980, pp. 10-12

1
Rollo, pp. 405-408

2
Id., p. 39: Exh. G, Annex C

3
Id.: Exh. H, Annex C

4
Rollo, p. 39

5
Id., p. 296

6
Id., p. 39

7
Docketed as NLRC Case No. RO-IV-11519-77

8 Annex H, ibid. pp. 10-12: Decision dated Aug. 31, 1979

1 Riker v. Ople, 155 SCRA 92 [1987]

2 ART. 267 (b), Labor Code; Victoria v.
Inciong, 157 SCRA 343 [1987]

3 Rollo, p. 39; SEE footnote 2, page 2, supra

4 Rollo, p. 578